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Property I
University of Toledo School of Law
Hopperton, Robert J.

Property Outline
 
I.                    Theory of Property Rights
a.       Primary function:
                                                               i.      To promote the efficient use of resources.
b.      Bundle of Rights:
                                                               i.      Possession (legal, actual, adverse)
                                                             ii.      Transfer if we want efficient use of resources, property rights should be freely alienable. We want the person who’s going to be the most productive w/the property to have it.
                                                            iii.      Exclusion—an owner can exclude anyone he or she chooses.
                                                           iv.      Use
                                                             v.      Enjoyment
                                                           vi.      destruction
c.       Externalities:
                                                               i.      An effect of one person’s activity on another. An effect the 1st person isn’t forced to take into account.
                                                             ii.      Encourage efficient use of resources.
                                                            iii.      Property rights develop to internalize externalities when the gains of internalization become larger than the cost of internalization.
                                                           iv.      Tragedy of the Commons
1.       Each person tries to maximize his or her own interests ruining everything for everyone in the end.
d.      Policies:
                                                               i.      Utilitarian: greatest good for greatest number.
                                                             ii.      Efficient use of scarce resources:
1.       Universality: every resource should be propertized including air, water, nat’l parks, Penn. turnpike.
2.       Exclusiveness: private property owner has the right to exclude anyone they choose.
3.       Transferability: if we want efficient use of resources, property rights should be freely alienable. We want the person who’s going to be the most productive w/the property to have it.
                                                            iii.      Maximum use of valuable resources:
                                                           iv.      Environmental protection of scarce resources
                                                             v.      Political freedom, individuality, liberty, creativity.
                                                           vi.      Free transferability
                                                          vii.      Fair use of resources/fairness
1.       Equity—merit
2.       Equality—equal treatment
II.                  Acquisition by Find
a.       Definition of finder:
                                                               i.      First person to take possession of lost or unclaimed personal property.
                                                             ii.      Possession requires:
1.       Intent to control the property.
2.       Exertion of control over the property.
b.      Definition of Owner Locus in Quo:
c.       Finder’s law
                                                               i.      The finder of a lost article prevails against whole world except true owner.
                                                             ii.      Prior possessor prevails against a subsequent possessor.
1.       Policy:
a.       Protects finder who reports find.
b.      Encourages getting property back to true owner.
d.      Relativity of Title
                                                               i.      Title of property is relative to claimant.
                                                             ii.      A certain person might have superior rights to a given piece of property over one party, but inferior property rights with regards to someone else.
e.      Categories of “Found” Property
                                                               i.      Abandoned property
1.       Property that the owner voluntarily relinquished w/no intent to reclaim.
                                                             ii.      Lost Property
1.       Property that the owner no longer possesses (unintentionally or voluntarily) because of accident, negligence, or carelessness, and that cannot be located by an ordinary, diligent search.
                                                            iii.      Mislaid Property
1.       Property was voluntarily placed w/out intention of relinquishing title.
                                                           iv.      Conversion
1.       Wrongful assertion of control over someone else’s property.
2.       Requires intent to possess and actual taking.
f.        Rights of Finders
                                                               i.      Finder v. True Owner
1.       Lost property
a.       Rights to objects found on public land
                                                                                                                                       i.      Finder has superior property rights over everyone else except the true owner.
                                                                                                                                     ii.      Armory v. Delamirie
b.      Rights to objects found on private land
                                                                                                                                       i.      Found in a house or embedded in the soil awarded to Owner Locus in Quo (OLIQ), not the finder. 
                                                                                                                                     ii.      South Staffordshire Water Co. v. Sharman
2.       Mislaid property
a.       Rights to mislaid objects found in public places
                                                                                                                                       i.      Finder of mislaid property does not acquire rights; it is awarded to the owner or occupant of the premises.
                                                                                                                                     ii.      McAvoy v. Medina
**Hopp’s Rule: No distinction betw. lost and mislaid property (how would the courts know?). In both instances, property goes to the finder.
3.       Abandoned Property
a.       The finder of abandoned property acquires title that is valid against everyone, including the prior owner assuming that the former property owner has no intent to reclaim.
                                                             ii.      Finder v. OLIQ
1.       Finder is trespasser (committing crime).
a.       Owner of premises favored.
b.      Policy: discourages trespass.
2.       Finder is employee.
a.       Employee has duty to report object to employer. Employer then has finders rights.
3.       Finder on premises for limited purpose (i.e. cleaning sewer drain).
a.       Owner.
4.       Object found under soil.
a.       Owner.
5.       Object found in private home.
a.       Owner unless owner isn’t in possession of the home (i.e. hasn’t moved in yet).
6.       Object found in safe deposit box.
a.       Returned to bank and after 50 yrs., if unclaimed, becomes property of the state.
g.       Bailment
                                                               i.      When one person gives temporary possession of her property to another.
1.       Bailor—true owner
2.       Bailee—person in possession (actual, physical control)
3.       Voluntary bailment—leaving something w/someone (movie rental, valet parking, etc.).
4.       Involuntary bailment—losing something that someone else finds.
                                                             ii.      Bailee has duty to exercise ordinary care and return the property at the end of the agreement.
                                                            iii.      Remedial Law
1.       Trover: action for money damages resulting from D’s conversion of P’s chattel.
2.       Replevin: action to obtain return of the goods, not damages.
h.      Policies
                                                               i.      Encourage finder to come forward.
                                                             ii.      Want to return property to original owners.
                                                            iii.      Reward finder if no owner found.
                                                           iv.      Prevent endless

                                                  v.      SOL operates against present (intent of now) possessory interest only, NOT:
1.       NOT Future interest, ONLY PRESENT interest
a.       Ex.: Redmond/painting case
2.       Not Previously severed mineral interests
3.       Not Previously acquired disabilities (insanity, imprisonment) in the owner at the time of the AP started.
4.       NOT easements: a non-possessory interest
                                                           vi.      Disability of Owner
1.       Additional pd. of time to bring an action if owner is under a disability.
a.       Rule: add 10 yrs. after disability is removed, unless if adding 10 yrs. makes a total less than 21 yrs, then it’s 21 yrs.
2.       SOL does not begin until disability is removed.
3.       Disability MUST be present at the time AP first enters.
a.       A diff. disability arising after entry does not count.
4.       Disabilities include minors, incompetence, imprisonment.
f.        Elements–HAVEC
1.       Hostility—possession w/out permission of landowner.
a.       State of mind regarding hostility
                                                                                                                                       i.      Objective (majority):
1.       State of mind is irrelevant.
2.       Don’t care if it’s in good faith or bad faith.
                                                                                                                                     ii.      Good faith AP (traditional rule)
1.       Person thought they owned it but he/she was wrong and now trying to take advantage of it.
                                                                                                                                    iii.      Bad faith/trespasser (traditional rule)
1.       AP went on the land w/intention of getting property wrongfully.
2.       Actual—Some substantial degree of physical occupation by AP.
3.       Visible—possession must be open and notorious (i.e. fencing, cultivating, erecting a building); AP must give visible evidence on surface of land to afford owner an opportunity to see that someone else is on his land.
a.       Exception: narrow encroachment
                                                                                                                                       i.      Mannillo v. Gorski: State of mind irrelevant except in minor boundary disputes; AP can only work if there’s actual knowledge of encroachment w/owner of land—Hopp thinks bad decision.
b.      Surface/ Subsurface Rights
                                                                                                                                       i.      Mineral underneath are treated as part of AP land if owned w/land.
                                                                                                                                     ii.      However, if minerals have been severed by sale to another, prior to AP, possession of surface does not carry to subsurface.
1.       To start SOL on minerals, AP must disturb them.
4.       Exclusive—AP must be in exclusive possession of land; can’t share possession w/owner of public generally.
a.       However, 2 or more persons acting together as AP’s and sharing among themselves may acquire possession as TIC.
5.       Continuous—AP continues w/out substantial interruption throughout the statutory pd.
a.       What interrupts continuity of AP? If AP takes a trip.