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Property I
Wayne State University Law School
Dolan, John

What is Property?
·         Property to the layman is a physical thing
·         Property to the lawyer is a concept
·         Posner: 3 Concepts
o Universality
§         All resources should be owned or be able to be owned by everyone
o Exclusivity
§         Owner needs to have exclusive right to it
o Transferability
§         The property can be transferred to another who can better maximize it
·         Transferability: 3 Rules
o Default Rule: One party gets what the other party has (=)
o Good Faith Purchase Rule: One party can give another more than he has for property ()
·         State v Shack (1971) [16] o Government aid workers entered a man’s property to talk to migrant workers whom he employed and housed. The man told them to leave then called the police and filled a charge of trespass. Rule: Real property rights are not absolute and necessity, either private or public, may justify entry upon the lands of another. Here, the aid workers only mode of talking to the migrant workers about their quality of life was to enter the land and that outweighed the interest the man had in not having them on his land.
        I.      Attributes of Property
·         Law Allocates the use of property and property rights
·         Lowie, Property in Primitive Societies
                                                            1.      Only developed societies care about property
                                                            2.      Property rights have developed over time
                                                            3.      Primitive societies had less concern over property and considered things for the community (tribe)
·         Seligman, Principles of Economics
o Occupation Theory of private property
i.        Discoverer of property gets it
ii.      Once you get it, then its yours
                                                            4.      Natural rights theory
i.        Private property is a natural right
                                                            5.      Labor Theory
i.        The real title to private property is derived from the toil and trouble experienced in creating it.
·         Does not fit with private property in land
·         Some hold that private ownership of land is unjust
                                                            6.      Legal Theory
i.        Whatever is recognized as such by the law is private property
                                                            7.      Social Utility Theory
i.        Supplies the link that binds the other theories together
ii.      Private property is an unmistakable index of social progress
·         Ely, Property and Contract – Distribution of Wealth
                                                            8.      The right of property is an exclusive right but it has never been absolute
                                                            9.      Two sides to private property
i.        Individual side
ii.      Social side
·         Eminent domain
·         Taxation
·         Morris Cohen, Property and Sovereignty
                                                        10.      The state must interfere with the rights of property owners to ensure prevention of public nuisances
                                                        11.      Since the Industrial Revolution the whole law had shown this growth in restrictions on private property
·         Lippmann, Method of Freedom
                                                        12.      You cant resist if you don’t have property rights
                                                        13.      Private property was the original source of freedom
b.      Jones v Alfred Mayer Co. (1968) [32]                                                             1.      Plaintiff filled suit against homeowner who refused to sell them a house because they were black. Rule: 42 USC §1982 bars all racial discrimination, public and private, in the sale or rental of property. Congress has the power under the 13th Amendment to prohibit private racial discrimination.
     II.      Traditional Classifications of Property
·         Definitions:
o Mortgage is part of real estate
o A Fixture is a Part of the Property not a separate chattel.
o A purchaser is a transferee that takes by voluntary conveyance
·         Brown on Personal Property
                                                            1.      Distinction between land and chattels is most natural
i.        In rem = land
ii.      In personum = chattel
                                                            2.      Choses (Things) in Possession: Rights in definite tangible things over which possession may be taken.
                                                            3.      Choses (Things) in Action: Rights to property which though represented by paper are essentially intangible in that they can only be claimed or enforced by action, not by taking physical possession.
                                                            4.      Modes of converting a Chattel to a Fixture
§         Owner of land may buy a new improvement (chattel) and install it
§         The owner of a chattel may annex it to the land of another
§         Annexor of a chattel may not own it but may put it on his own land
·         Edwards v Sims (1929) [42] o Man sued his neighbor because he believed his neighbors cave ran under his property. Trial judge ordered a survey conducted on the cave. Neighbor then sought an injunction on the survey claiming the judge did not have the authority to order one. Rule: The owner of real property also owns the space and resources above and below his property; however, a court may order a survey to determine whether a cave extends beyond the boundaries of a property owners property and onto another’s property.
·         Rule of Capture
o Permits a landowner to retain any oil or gas which he has tapped through drills or wells located on his own property even though the fact that some of those resources may have been drawn from beneath the land of his neighbors.
   III.      Non-Traditional Classifications of Property
·         Property is a mental construct that developed to rationalize the desire to own and control specific things, typically land and chattels.
o Mental constructs are never static and property principles can be extended to include many non-traditional areas
o Intellectual Property
§         Copyrights, patents, trademarks, trade secrets, etc.
§         Outside the normal scope of property
·         Ownership is a legal concept which indicates that one has a claim or right of property.
o You cannot own an idea but the process of the development of the ideas and materials or products developed may be legally protected.
·         Reich, The New Property
o New property is the emergence of government as a major source of wealth.
§         It is changing our society and impacting private interests.
§         There are income, benefits, jobs, occupational licenses, franchises, contracts, subsidies, use of public resources, and services.
o Society is built around entitlements and the only entitlements that have truly not been protected are those of the poor.
·         Moore v Regents of UCLA (1990) [53] o Plaintiff was treated for cancel by a doctor at UCLA. The doctor later developed his blood cells into a profitable cell line for UCLA. Plaintiff was unaware that the doctor was using his blood for these purposes. He sued on theory that the doctor converted his property. Rule: Unauthorized use of human tissue in medical research does not constitute conversion. The plaintiff did not intend to retain possession of the blood so the doctors use of it after consented withdrawal cannot constitute a valid conversion claim
 IV.      Role of Property in Society
·         Johnson v McIntosh (1823) [63] o Indian Chiefs conveyed land to Johnson. Johnson sued for a declaration that he had absolute title in the property conveyed. Rule: The discovery of Indian-occupied lands vested title in the discoverers and rendered the Indians as being incapable of conveying absolute title to others. Indians retain merely the right of occupancy on the lands.
·         Shelley v Kraemer (1948) [69] o Shelleys purchased a home which unbeknownst to them was subject to a racially restrictive covenant. They were black. Kraemers as neighbors, subject to the covenant, sued to vest title to the home in white people. Rule: The equal protection clause of the 14th Amendment prohibits judicial enforcement by state courts of restrictive covenants based on race or color.
     V.      Property Law Lawyers
·         Property Law is a response to societies needs
·         Properties of Property
                                                            1.      Exclusivity
                                                            2.      Universality
                                                            3.      Transferability/Alienability
i.        Ability to move or keep others away
                                                            4.      Externalities
                                                            5.      Marginal Utility
i.        Benefit of each additional unit
                                                           

e trove is a principle that will not be followed and instead general principles of misplaced goods will apply. As such, the owner of the land is entitled to possession of the money.
·         Escheat and bona vacantia are incidents of feudal tenure whereby the Crown gained possession of property when the owner died intestate. American states have enacted statutes using the term escheat to accomplish a similar goal of gaining possession of an intestate owners property for the state.
o Unclaimed Property Acts authorize state officials to take control of bank accounts, safe deposit boxes, or other dormant funds, which have laid inactive (generally 7 years or more). The official adds the funds to the general state funds and sells the contents but opens a trust to satisfy any claims by the former owners.
VII.      The Acquisition of Property: Creation of Bailments
·         A bailment is the relationship that exists between an owner of a chattel and the person who lawfully possesses it.
o The delivery of property to be held in trust and which is designated for a particular purposes, following the satisfaction of which the property is either to be returned or disposed of as specified.
o Possession as a bailee imposes obligations and generally since bailments are created voluntarily those obligations can be detailed in contracts but laws may also impose obligations.
·         Bailment for Hire
                                                            1.      A bailee of goods is liable in 2 cases
i.        When he misdelivers the goods
ii.      When the goods are lost or damaged, only if bailee was negligent, however the presumption is that the bailee was negligent
·         Voluntary Bailments
                                                            2.      It is the duty of the bailee to deliver the bailed article to the right person, and that delivery to the wrong person is not capable of being excused by any possible showing of care or good faith or innocence.
                                                            3.      Bailee has an affirmative duty to show he was not negligent
                                                            4.      Traditionally, misdelivery by a bailee has been regarded as conversion
·         UCC §2-403
                                                            5.      First Rule of Conveyance
i.        A purchaser of goods acquires all title which his transferor had or had power to transfer
                                                            6.      Voidable Title Doctrine
i.        A person with voidable title has power to transfer a good title to a good faith purchaser for value
                                                            7.      Buyer in Ordinary Course Rule
i.        Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to buyer in ordinary course of business
·         Allen v Hyatt Regency Nashville (1984) [114] o Plaintiff parked his car in the defendants parking garage. A ticket was required for exit and an attendant checked every ticket as cars left. Additionally, security guards monitored the structure. When the defendant returned his car was missing so he brought suit against the owners of the parking garage. Rule: Enclosed, attended, commercial parking structures create bailments for hire and because of the bailee relationship a presumption of negligence is attached if a car is stolen.
VIII.      The Acquisition of Property: Bona Fide Purchase
·         Bona Fide Purchaser
Someone who purchased something (e.g. a bond, a promissory note, or jewelry) with no reason to be suspicious that it was stolen, belonged to someone else,