Property Outline
The Nature of property: What is property (real = immovable; personal= moveable)
Concept of property
A persons rights in relation to a thing to:
Possess or occupy it
Use it somehow
transfer it to another
right to exclude it from another
By labeling things as property we are able to establish order in society and maximize efficiency of scarce and valuable resources.
Why Private Property?
Part of individual identity: i.e., Midler case.
Natural right
Owner created value by labor
Threshold of significance is important; not just any labor can count, there must be some significant contribution to society.
Possession: simply possessing a thing justifies a property right
Social order:
Promotes Democratic participation
Efficiency
Incentives to create wealth
Intellectual Property(i.e. property rights in ideas)
Nonphysical property which stems from, is identified as, and whose value is based upon some idea or ideas.
Common Law
Singers Voice is Property (Midler v. Ford)
“When a distinctive voice of a professional singer is widely known and deliberately imitated in order to sell a product the sellers have appropriated what is not theirs.”
Novel & Original Idea is Property (Downey….Mr. Wiggles for Jello)
Rights of a property owner
Right of reasonable use (nuisance)- sic utere …..
Rule: an activity that “substantially an unreasonably interferes with the use and enjoyment” of property is a nuisance; Non-trespassory (Penland v. Redwood)
Rule: Permanent damages may be awarded for loss of enjoyment if in the balance of equities an injunction is not granted (Boomer cement co case)
Rule: Court may require plaintiff to pay damages to enjoined defendant (Spurr)—coming to nuisance most important factor
Factual considerations:
Location
Character of area
Nature of offensive activity
Frequency
Who was there first – coming to the nuisance (this idea is really a relic)
Although sometimes there can still be a claim of nuisance
What is the practicality of enjoining the facility?
Remedy—damages and/or injunction
Rights above and below the surface
Subsurface rights: Oil and Gas
Rule: landowner owns the rights to the subsurface
Exception: owner may sever subsurface rights from surface by means of a conveyance
Majority Rule: (McCormick Rule) Rights to minerals
Includes only substances that are
“exceptional” in use, value, character
Understood by industry custom to be included in term
Rule of capture: land owners may drill on their own land and drain whatever they can
No way to tell how much belonged to each owner; rule of capture is easy to apply
Oil and gas are fugitive by nature
Problem: rule of capture is inefficient method of extracting O & G
Limitations on Rule of Capture: maximizes production of oil by protecting well pressure
Fair share principle: assured that a property owner is entitled the opportunity to capture the percentage of the mineral that underlies their property
if other party doesn’t want to capture his oil than the other party doesn’t have to stop taking the oil
Proration orders: limit on how many barrels can be produced per day
Well spacing patterns: limits use of oil rights by all owners per acreage owned (certain number of wells/acre)
Damages (remedies) for conversion: 2 rules
if unintentional:
value in place
Royalty that would be paid for produced gas, or
Market value – (minus) production costs
If intentional:
Market value after production
Airspace rights:
Rule: land ownership includes some right to use the space above the land
“the immediate reaches of the enveloping atmosphere”
at least as much as one can occupy or use in connection with the land
the right to airspace above a parcel is not exclusive, but the owner is entitled to freedom from excessive noise
anticipated uses that can be proven are a factor to consider
Water Rights: Riparian rights to water land you own or land that borders your land
In streams: rights generally effect only riparian land owners
Reasonable use rule: riparian owners may use water beneficially for riparian land as long as they don’t unreasonably interfere with other riparian owner uses
One’s use is not enjoinable unless it substantially interferes with the use of other riparian owners
Courts use a balancing test o
the plaintiff
Were the defendant’s actions unreasonable? Did they cause “substantial” harm to the plaintiff
Underground water rights: usually a complaint that a use has dried up a source or has caused land to subside
English/Common law rule: Use any amount (unless malicious or wasteful)
limits litigation; if didn’t exist could inhibit development; maximize social wealth but may minimize social equity
American/Reasonable use rule: Use any amount for beneficial purpose on land above or elsewhere if it doesn’t injure others
Must be used in connection with the land from which it was taken for it to be reasonable (even if is harms others)
Wasting of water is still unreasonable even if it does not injure others.
Basically only affords protection from cities withdrawing large quantities of water for municipal utilities
Forces the city to pay those affected by such excessive use damages
Correlative rights rule (proportionality rule): Use only the proportionate share if more would injure others
Difficult to tell what is a person’s fair share of the water.
Rest §858(a): Reasonableness of uses (the reasonableness varies with the circumstances)
Not liable for interference with the use of water by another unless:
it causes harm to others by lowering of the water table or reducing artesian pressure
The ground water forms an underground stream
The withdrawal of water has a dire and substantial effect upon the water of a watercourse or lake
Unreasonable when neighbors use more water than you do and it burdens you, i.e. if a corp. takes too much H2O and interferes w/ domestic uses
Prior appropriation rule: (Western states) Own whatever you beneficially use first (same info as above in streams)
