What is Property?
– Definition, Robert S. Hunt (pg. 2): “the basic problem of property law in general is nothing more or less than determining the relation of the individual to the community with regard to the use and exploitation of resources.”
– Think of property as a bundle of sticks:
o Certain transactions, you have to give a few sticks away.
– Tragedy of Commons: pg. 7
o “freedom in commons brings ruin to all”
Welfare State Optimality (pareto optimality):
Posner’s Three Essential Characteristics of Property
Universality: all resources should be owned or ownable by someone
Exclusivity: owner must be able to exclude others from use of or access to the property
Transferability: owner must be able to transfer property to another.
Three Rules of Transferability:
1. Default rule (Nemo dat)= x transfers property to y, y gets what x has. Y’s interest is derived from x. X=Y. Can’t give what you don’t have.
2. Good Faith Purchase Rule: X < Y Completely illogical Voidable title 3. Fraudulent Transfer Rule X > Y
Y gets nothing. X got rid of assets, which is illegal, Y gets less.
Good faith purchaser buys stolen goods and gets nothing.
Efficiency is the moving force for transferability in property.
Limitations on Absolute Rights of the Landowner
State v. Shack, NJ Supreme Court (1971) pg. 16
Optimal to enhance the needs of the migrant workers at the expense of the non legitimate needs of the farmer
Places limits on exclusivity.
Seligman, Theories of Property
· Occupation theory: you seize it, you own it.
· Natural Rights Theory: private property is part of the law of nature
· Labor Theory: ownership comes form expense and effort.
· Legal Theory: whatever is recognized by the law is rightful property. You own it if the law says you own it.
· Social Utility Theory: society permits private property because it benefits social welfare
Ely, Theories of Property
· Property is exclusive(right to exclude) but not absolute(i.e. taxation ordinances)
· If you own art, you don’t have to give it to anyone, but you may not have the absolute right to destroy it. Cultural treasures(Frank Lloyd Wright house)
Lippman, The Method of Freedom
Private property was the original source and only guarantee of freedom.
Property Rights v. Individual Rights
Jones v. Alfred H. Mayer Co. (1968) pg. 32, US Supreme Court
Congress can forbid a private person’s refusal to sell or rent property because of race.
This places limits on the freedom of transferability.
Traditional Objects and Classifications of Property
– It used to be that land was the only source of wealth, the only way to get ahead was at the expense of someone else. The New Property (IP, copyrights, movies, books) creates wealth without taking it from others.
– The law can limit the rights of ownership of certain types of property (illegal drugs, uranium, oceans, weapons)
Brown on Personal Property: Classes of Property
There is a distinction between land (realty) and chattels (personalty)
· Permanent and immovable
· Possessed or controlled by its owner in only an incomplete or limited manner
· Real Property: rights in land, sue to get real estate back
· Real Actions: sue the rem
· But, not all rights in land are considered real property
o Freeholds: interests that endure for the life of the holder or longer, real actions are available
o Nonfreeholds: those interests that endure for a term of years, or at the the will of the parties. No real action available.
§ Lease, “term for years”
· Temporary character and can be easily moved
· Can be handled, manually transferred, altered, and usually even destroyed
· Personal property: consists of chattels, or right in chattels
· Personal actions: recovers only damages from the adverse party, sue in personam
Fixtures: a severable chattel attached to real estate
Accession: a chattel that is not severable. Something that becomes part of the real estate (poured concrete)
Annexation v. Accession: Depending on the category below, the court may determi
e it (usufractory rights, supra.)
Moore v. Regents of University of California (1990) pg. 53, CA Supreme Court
· Policy reasons allow courts to limit/bar individuals from property rights in their bodily organs and fluids
· Conversion rests on concept of ownership or property.
o Must have one of two things:
§ 1. Title or
§ 2. Possession
· Dissent: human body is different form other property, notion of ‘soul,’ these things are ‘you,’ not just collections of tissue.
Right to Publicity:
· You can have interest in your name, image, statute, and persona
· If you don’t protect a property of publicity, then it doesn’t have any value
Role of Property in Society
Johnson v. McIntosh (1823) pg. 63, US Supreme Court
American Indian case
· First rule of conveyancing (Nemo dat): one cannot give what one does not have
· Holding: only the state may buy property from American Indians because historically they only have a right of occupancy, but no title
· Therefore any land grand to individuals by the Native Americans is void under the first law of conveyancing
Shelley v. Kraemer (1948) pg. 69, US Supreme Court
African Americans purchasing home
· SC held that asking a court to enforce a private agreement is a use of state power within the meaning of the Constitution
o Therefore a racially restrictive covenant in a deed cannot be enforced by state court
· This determination does not affect the private rights to contract for whatever they want; it only blocks courts from enforcing unconstitutional private agreements.
· Efficiency argument: more buyers is better for the economy