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Property I
Wayne State University Law School
Mogk, John E.

PROPERTY OUTLINE
Prof. Mogk
2010-wayne law.
 
I.          General Notes on Property
A.       What is Property?
1.         General Attributes
a)         Cash Value
b)        Separability from Person
c)         Value After Death of Owner
d)        Transferability (Alienability)
e)         Product of One’s Own Efforts
2.         Examples:
a)         Military Retirement – not property
b)        Earning Capacity – not property
c)         Accrued Goodwill of Medical Practice – not property
d)        Law Degree – not property
3.         General Incidents of Ownership
a)         Possession (right to have, hold, & keep)
b)        Exclusion (right to exclude others)
c)         Disposition (right to alienate)
d)        Use (right to employ the property as desired)
e)         Benefit (right to profits realized through property’s use)
f)         Destruction (right to destroy property)
B.       Posner and Property
1.         Property rights are “natural” (contrast with Bentham)
2.         Without property rights, there is no incentive to use property efficiently.
a)         There would be no consequences for theft
b)        People would disfavor activities that would require prepatory investment.
(1)      Ex.: People would not farm, since this would require time to develop, during which the fruits of their labors could be taken by an interloper with no consequences.
(2)      Ex.: Thus people would turn to activities requiring less investment, such as hunting.
c)         Property rights should be transferable to promote efficiency.
(1)      Ex.: Farmer A owns land. A’s crop = $1,000.
(2)      Farmer B can raise a crop worth $1,500.
(3)      If B pays A anything between $1,000 to $1,500 for the use of the land, both parties win.
(4)      e.g., if B pays A $1,250 then A makes $250 more than he would have, and B makes a $250 profit.
3.         Three Elements for an Efficient System of Property Rights:
a)         Universality – every limited resource must be owned by someone.
b)        Exclusivity – the owner must be able to exclude others (to provide an incentive to invest labor).
(1)      Note that this is never absolute (see infra).
c)         Transferability – property rights must be able to be shifted from one party to another (for maximum economic benefit)
4.         Note that Posner generally does not factor morality into his analysis.
C.       Other Philosophies:
1.         Blackstone
2.         Bentham – property is a ‘basis for expectation’
a)         Property is entirely a construct of law (there is no ‘natural’ property – only by discarding “might makes right” principle in favor of securing/labor theory does a right of possession exist)
(1)      Ex.: If a caveman must constantly defend what he owns, does he really ‘own’ it?
b)        Expectancy: securing something and/or investing labor in it gives rise to an expectation to use it. The law should and does honor this expectation in property rights.
c)         Comparing Bentham to Posner
(1)       Anomalies under Bentham: Under the Posner theory, property is something that has value, not just what is legally defined as property as under Bentham, but from what people hold as having value. There are several cases of items treated as property without law, such as illegal drugs, territories for marketing such, boyfriends and girlfriends. Here no property right exists but people treat it as such either by enforcement of societal values or by fear of retaliation.
(2)      Anomalies under Posner: Transferability frequently measures more how much a person wants something, we being non-rational operators, than how efficiently we will do so. Transferability of some items actually induces inefficiencies, such as those which are merit based. If you could transfer law school admissions, you would be measuring who wanted it the most, or who could pay the most for it, and not who could best utilize it.
3.         Cohen:
a)         “Property merges by imperceptible degrees into government, contract, force & value.”
b)        In other words, when is property taken, and when is it merely regulated?
4.         Locke:
a)         Labor creates property
b)        Ex.: A deer is unowned until a hunter kills it.
D.       Defining Ownership of Property
1.         What does it mean to “own” something?
a)         Are tissue samples collected for a patient’s medical exam, but later used in a lucrative cell line, the patient’s property? Moore v. Regents of University of Californ

e is a good faith purchase of the property?
2.         Two methods of handling:
a)         Adverse possession rule: to take title, the purchaser must make hostile, actual, visible, exclusive & continuous display of the property for the statutory period.
(1)      Problem is how to do this with personal property – if it is, say, a painting on display in one’s home it is not ‘visible.’
b)        Discovery rule: for the purchaser to take title, the statutory period begins running if the original owner does not make due diligence to find the property.
(1)      Problem is how does the good-faith purchaser know if he has good title – there is always the question of if the owner has exercised due diligence.
3.         Posner & Epstein would have favored the owner over the purchaser.
D.       Adverse Possession
1.         To establish adverse possession, possession must be:
a)         actual
(1)      real & substantial
b)        visible – “conspicuous”
(1)      must exert dominion over the land, but only to the extent that the land will permit.
c)         notorious – “widely known”
(1)      public perception that the land ‘belongs’ to the adverse possession is sufficient.
d)        exclusive
(1)      there cannot be a sharing of ownership; however, allowing others to use the land periodically does not establish lack of exclusivity (i.e., letting local kids ice-skate on one’s pond)
(2)      basically, no sharing with the owner or the public at large.
e)         hostile
(1)      asserted against all other claims (not evil intent)
f)         continuous
E.        Conquest
1.         All title to land extends from the sovereign
2.         In competing chains of title, the one who can trace the land to the earlier grant that extends from the sovereign has the superior title.