I) Finder’s Laws
II) General Rule
a) Finder has ownership rights against all but the true owner, but he gains relative rather than true rights (usually).
i) Armory v. Delamire: chimney sweep has right to possess jewel over all but true owner.
b) Policy: Goals of finder’s laws
i) Labor
(1) Reward finders to encourage work and extra effort expended, etc.
(2) Inaction of true owner is punished, unless he/she undertakes an effort to locate property.
(3) Rewards effort of finding & “bringing to light.”
ii) Law & Order
(1) Discourage stealing (encourage good citizenship).
(2) Give protection to finder to encourage them to bring it to light. Prevents unlawful acquisition from 1st finders (Armory).
(3) Finder closest link to TO (proximity & location of found property) so this protects the rightful interests.
(4) Finder has best claim – 1st to discover (Hierarchy of Finders).
(5) Value of property shall be the highest value for equivalent – encourages unlawful possessor to return property (Armory – unlawful possession of jewel).
iii) Social Policy
(1) Bring the item back to the original owner, which is the most desirable outcome.
(2) Clear rule keeps it with person the original owner is most likely to return to looking for their stuff (this is stronger for a mislaid than for a lost item).
iv) Expectations:
(1) People expect ownership rights to go to 1st finder.
v) Economic Efficiency (Vesting Clear Rights)
(1) Bring item back into commerce for economic efficiency; give it to person who will use it.
(2) Puts resources back in stream of commerce, gives incentives to invest and use resources efficiently, encourages efficient use of resources.
(3) Statutes sometimes cut off true owner’s rights after a time in order to vest clear rights and bring item back into commerce (protect finder).
vi) Judicial Efficiency & Title Clearing:
(1) Bright line rule eliminates excessive (case-by-case) litigation.
(2) Society benefits by assigning ownership rights to 1st finder b/c it establishes clear owner & puts object back into stream of commerce.
vii) Fairness
(1) Protect reasonable expectations of the finder.
(2) Give item to person who is more “deserving” (clean hands).
viii) Possession
(1) An act of control is easier to determine objectively. “Ownership rights” part of the bundle of sticks.
III) Things to Consider:
a) Location of the Item: Can determine how much right the finder has to the item.
i) Public:
(1) In a public place, the landowner has ceded rights to a much larger group. Rewards the finder because landowner has given up more rights.
(2) In a public place, landowner is not deemed to have constructive possession of all property lost or abandoned by customers.
(a) Constructive possession is the idea that you own everything in/on your property whether or not you know it’s there. Protects owner’s expectations, and it’s good social policy.
ii) Private:
(1) In a private place, the landowner has rights to all lost/mislaid items found. A finder who is a trespasser has none, an invited guest usually has none, but someone with a limited interest in the property (like a tenant) has a stronger claim.
iii) Mixed:
(1) If public is invited in for a specific purpose, and finder is within their rights, he might have some claim. Distinction between lost and mislaid items in a public area.
iv) Implications:
(1) Purely public – tend to reward finders.
(2) Purely private – tend to reward landowner. Interests of the shop-keeper prevail if item is in a private area of the shop (behind the counter).
(3) In-between – depends on where item was found, who is “in control” of the area, labor (was it an “inevitable discovery”?), law and order (don’t want to encourage people to trespass, etc. in the search for lost items).
(4) Armoryis usually followed in public places (finder prevails), but in private places usually South Staffordshire(landowners won ownership to rings found in the bottom of their pool).
b) Status of Item: where the item is found can inform in what sense the item was left by the owner.
i) TO’s interest is more significant if they are likely to return looking for item. Use arguments on both sides à was the item lost, mislaid or abandoned? It will have implications.
ii) Mislaid:
(1) Position indicates intentional placement, so that it can be inferred that the TO placed it somewhere and forgot to retrieve it.
(a) Landowner usually has stronger rights than the finder.
(i) Policy:
1. Social policy argument is stronger because TO is much more likely to trace back where they mislaid the item, and return to store.
2. Labor interest is weaker because the discovery was basically inevitable.
(ii) Note: should the shop owner have a duty to take a found item and hold it for the TO? Courts are reluctant to say this.
(b) An item buried under the earth or hidden somewhere might go from mislaid to lost after the passage of some time. Check condition for indications of time, like cobwebs, dust, etc. (broach in Hannah).
(c) Clearly mislaidif the item was deliberately placed in a location.
(i) Ex: if they had to use tools to secrete it, there’s no way it was unintentionally lost.
(d) Embedded item will generally go to the landowner (constructive possession).
iii) Lost:
(1) Slipped out of TO’s possession unknowingly and TO couldn’t find it; out of plain view.
(a) Public place: possessory rights usually given to finder, since TO is less likely to trace the item back to where it is.
(b) Private place: depends on facts/circumstances, but still a better case for the finder than if the item was obviously mislaid.
(2) Policy:
(a) Social policy is less strong than for a mislaid item because TO is less likely to come looking for the item.
(b) Labor interest is stronger because it’s probably out of plain view.
iv) Abandoned:
(1) TO left the property, intending to concede rights.
(a) Finder becomes the owner, and TO has no rights (as opposed to previous 2, where finder acquires a right to possess but TO retains ownership).
(b) TO must demonstrate some intention to abandon, such as leaving a newspaper on a table.
(c) Abandonment means that the owner has zero rights left. Sometimes the law will not allow someone to abandon something (like land, because of taxes, etc.).
v) Stolen:
(1) TO usually has all rights if it was an unlawful taking.
vi) Implications:
(1) Interests of the shop-keeper prevail if item is mislaid.
(a) Social policy (customer will likely return), law & order (customers could be just carrying off each others’ possessions)).
(2) Interests of finder might prevail if item is lost.
(a) Labor, fairness, vesting rights as an incentive to bring it to light and encourage economic efficiency. Real owner is much less likely to come back and claim it.
vii) Examples:
(1) Bridges: bundle of $$ found on floor, and after 3 years TO hadn’t claimed it à went to finder.
(a) Status of item: obviously lost, so less likely that TO would return.
(b) Location: found in a public part of the shop, so less important to protect expectations of shop owner. The finder had a right to be where he was, and is the legitimate first finder.
(c) Policy:
(i) Labor interest: finder noticed the item, picked it up, and brought it to the attention of the shopkeeper.
(2) McAvoy: wallet found on counter by customer à went to shop-keeper (distinguished from Bridges).
(a) Status of item: mislaid on counter, so very likely that TO would return looking for it.
(b) Policy:
(i) No real labor interest (anyone would have found that eventually).
(ii) Law & Order: want to prevent customers from finding things in the store that belong to other customers.
and operate on their own initiative.
(2) South Staffordshire suggested that even to an IC, it might still go to landowner on very private property, like a home.
(3) Examples:
(a) South Staffordshire: upheld rights of landowner, although he had ceded certain rights to defendants to clean the pool.
(i) Policy:
1. Location: it was a home (very private place), and closer to TO.
2. Labor: as employees, their labor interest was directed by landowner and he showed a good deal of control (although they did take initiative to dig under the mud). However, they had a good labor argument because this was took unique talent and effort.
3. Social policy: don’t want employees tearing up the yard looking for stuff on their own.
v) Tenant:
(1) Has brought almost complete control of the area he rents and has the right to be there. Depends on how much of the ownership rights to landowner has ceded and the status of the item.
(2) Lost item: might go to finder because of his labor in recognizing and bringing it to light.
(3) Mislaid item: might go to landowner because of law and order (discourage trespassers) and he is closer to TO (more likely to come back looking for it).
(4) Example:
(a) Hannah v. Peel: finder (military officer staying in a home like a tenant)) got ownership rights to a broach he found.
(i) Policy:
1. Landowner had never possessed the home (lowered expectations).
2. Finder was rightfully in the house (law & order) and cleaning was within the rights that he had been ceded, and his conduct was “commendable and meritorious.”
(5) Hypos:
(a) Ring in the carpet = tenant’s. Landowner has ceded right to be in the living area and tenant has physical possession and almost total control. He will probably win as owner at the time of possession.
(b) Ring embedded in the ground/wall = landowner’s. Might not be tenant’s because it is part of the property. Landowner hasn’t ceded rights to dig in the yard, so landowner has greater rights as owner of the real estate.
(c) Ring in a public place, like the pool = tenant’s. In this public area, the landowner has ceded rights to a much larger group and court will reward the finder for his labor in bringing this to light.
(d) Ring in the air vent (that tenant is required to clean) = tenant’s. Since he’s within his rights, it will probably go to him even though this isn’t a place he lives in every day.
(e) Ring finds a ring on a ranch for which he has a 20-year lease = tenant’s. Landowner has ceded lots of control and tenant maintains the property, etc.
(f) Safe-deposit room at bank = bank’s. Finder has almost no rights there because TO’s interest is so strong. This is a very secured area where the bank has not ceded many rights to the public (the lobby would be different).
vi) Consider:
(1) What rights/responsibilities the land owner has ceded.
(2) What the holding will encourage (ex: don’t want to encourage trespassers, etc.).
(3) Whether or not the person was invited in (public or private place).
(4) Where the item was found (on top of the earth (better for finder) or buried in it (better for land owner)).
