I. Intro to Property:

  • What does it mean to own something?
  • Bundle of Rights:
  • 1. Use - you have the ability to use it
  • 2. Exclude - you have the ability to exclude others from using it
  • 3. Alienate - you have the ability to alienate it from others (transfer it)

- Ability to transfer creates efficient use of assets

  • Ownership can come from 3 sources:
  • When you create it (acquisition by creation)
  • When it is taken involuntarily (adverse possession)
  • When it is given voluntarily (acquisition by gift)
  • 4 main topics:
  • 1. Acquisition of Property
  • original acquisition
  • adverse possession
  • gift
  • voluntarily
  • 2. Multiple interest in the same piece of property
  • possessory estates
  • 3. Co-ownership
  • marriage interests
  • how multiple ppl can own the same piece of property
  • 4. Relationship btw individuals and government
  • zoning
  • takings, power of imminent domain

II. Section 1: Acquisition and Creation

  • A. Acquisition by Capture:
  • Rule = if wild animals are captured they belong to the captor. Capture is required; chasing the animal is not enough. (Pierson v. Post – Post had been pursuing a fox when Pierson came along at the last minute and captured and carried off the fox.)
  • Doesn't apply to tamed animals
  • Rule = (First in Time Rule) The first to physically capture/kill wild animals gets the title(Pierson v. Post)
  • Dissent: Constructive possession: Post's pursuit put him in constructive possession of the fox. The pursuit of the fox has the same effect as actual possession; he had the right to possession even though it was not yet actual possession esp. b/c Post expended much more effort and labor in pursuing the fox.
  • Rule = custom/trade usage is sufficient when:
  • Its application is limited to the industry and those working in it
  • The custom is recognized by the whole industry
  • The custom requires in the 1st taker the only act of appropriation that is possible
  • The custom is necessary to the survival of the industry
  • The custom works well in practice (Ghen v. Rich – P is a whales-man that captures whales by marking them w/a bomb lance. Someone else found one of P’s whales and sold it at auction.)
  • Rule = Interference by a non-competitor: if someone hinders another trade, he is liable for not allowing another to practice his trade freely. (Keeble v. Hickeringll - P owns land which contains a decoy pond to attracts wild game and Dshot guns near the decoy pond for the purpose of interfering with P’s capture operation.)
  • Rationale: Society wants the animals caught; promotes killing not conservation of wildlife which is the goal at this time

Productivity of Land

  • Trade competition is allowed but not malicious intereference
  • The Rule of capture and other "fugitive" resources
  • 1. Oil and gas - Oil and natural gas commonly collect in reservoirs that underlie many acres of land owned by many different people. The resources have a fugitive character in that they wander from place to place.

When problematic situations arose about ownership of oil and gas the courts likened the resources to wild animals b/c of their fugitive nature.

  • "minerals ferae naturae" = have the power and tendency to escape w/o the volition of the owner – similar to animals

this type of thinking was overruled b/c it denies society at large the benefits of economical underground storage

  • 2. Water - The rule of capture has played a formative role in the case of water

i. Absolute Ownership Doctrine: Allowed each landowner to withdraw freely w/o regard to effects on neighbors

ii. Reasonable Use Doctrine: wasteful uses of water, if they harm neighbors, were considered unreasonable and hence unlawful

Western US = first in time or prior appropriation is used in the West where water is not an abundant resource

  • the person who captures the water 1st and puts it to reasonable and beneficial use has the superior right to it
  • Creates externalities b/c once someone starts to capture the water, everyone will rush to use to it so that it is not depleted by just one person

Eastern US = riparian rights are used in the East where water is an abundant resource

  • each owner of land along a water source (riparian land) has a right to use the water subject to rights of other riparians
  • Benefits to the rule of capture:
  • low transaction costs
  • easy to implement b/c the parties know what's involved
  • clear rules are nice when there is a small amount of money at stake because you don't want to spend a lot of money transacting when there is only a small amount of gain to be realized
  • B. PROBLEM OF THE COMMONS
  • Externality:
  • costs, which are external to the decision maker so that they are costs, which are not taken into account which can lead to insufficient use of resources

Decisions are beneficial to the maker but harmful to society

  • a cost that gets placed elsewhere, costs are pushed out on other people other than the individual b/c the individual only looks at the benefits and not the costs.

This causes people to use resources inefficiently.

  • Hypo: a factory pollutes the air which is the best for the factory b/c in order to not pollute the air, it would cost them a lot of money and not polluting the air doesn't benefit the factory at all, and the community bears the cost of having to live with unclean air
  • Problem of the holdout - why should I do it if no one else is going to?
  • Hypo: Suppose Midway airport wants to build a runway and there are 10 houses in the way which each cost $100,000. Midway offers each homeowner $140,000 b/c the gain to midway is going to be more than that. 9 out of 10 people say yes and the 10th person holds out and waits for a better offer b/c the 10th person understands that the gain to Midway is much more than $140,000.
  • 3 Types of Property Ownership:
  • 1. Communal ownership-a right which can be exercised by all members of the community; the community denies the state or the individual the right to interfere with any person's exercise of communally owned rights

i.e. everyone had the right to put their animals on common property

Problem with the commons is that individuals have incentives to look only at their own private gains, not the gains of the community.

Hypo: There are 100 people that have ownership of a forest w/100 trees. If one person rushes out and cuts down a tree to take it as their own, that person is better off and society is worse off. What is society going to do? Run out and cut down all the trees before someone can take them all.

2 conditions must be met for the problem of the commons to hold:

  • 1. You need to know the information – you need to know what is the best for the community as a whole in order to act accordingly
  • 2. Finite amount of resource (property)

Problems with Communal Property

  • *Assumes Exhaustible resource of land*
  • *Assumes sufficient knowledge*
  • Everyone has access to commons and everyone is likely to be worse off as a result
  • Individuals with access to commons have incentives only to look at own gain and own costs (private gain/private costs); not benefits for gains to the community as a whole
  • Communal situations are likely to have many externalities.
  • 2. Private ownership - implies that the community recognizes the right of the owner to exclude others from exercising the owner's private rights

Private property makes it easy to internalize the externalities. There are costs associated with internalizing externalities, but doing so is more worthwhile than not doing so.

By internalizing externalities, you look at the cost and benefit and therefore make the best decision, which is what private property forces people to do.

Moving from common property private property has advantages:

  • 1. Internalizes externalities
  • 2. Individuals have incentives to act in a societally beneficial way
  • 3. Cuts down on transaction costs b/c we don't have to negotiate with other people
  • 4. Able to transfer property to the person who is going to value it most highly
  • 5. Allows people to plan prospectively
  • 3. State ownership - implies that the state may exclude anyone from the use of a right as long as the state follows accepted political procedures for determining who may not use state-owned property
  • C. Acquisition by Creation:
  • 1. Property in One’s Ideas and Expressions: General Principles of Intellectual Property
  • General Rule = If you create something you are essentially first in time and that something is yours to exploit

Rationale:The purpose is to reward labor

  • Rule = misappropriation or unfair competition - When a P has by substantial investment created in an intangible thing of value not protected by a patent, copyright, or other intellectual property law, and the D appropriates the intangible at little cost which injures the P and puts the P's continued use of the intangible in jeopardy as a result, an action for misappropriation will lie. (International News Service v. Associated Press - INS was bribing members of AP to give them gathered news so that INS can publish the news before AP.) -
  • Rule = In the absence of some recognized right at common law or under the statutes, a man's property is limited to the chattels which embody his invention. Others may imitate at their pleasure. (Cheney Brothers v. Doris Silk Corp - The P owns a silk shop where he designs patterns and the D copied one of the popular patterns which took business away from P.)

Policy:Imitation promotes business competition – property must be protected by law (patents, copyright) if they are to be safe from imitation

  • Rule = When copying another's product, it can claim to be equivalent without claiming to be identical. (Smith v. Chanel - D copied perfume from P and stated in the advertisements that the imitation perfume was the equivalent of the original perfume.)
  • 2. Property in One’s Person
  • Rule = Property rights are terminated when biological material is excised so that one cannot bring an action for conversion (wrongful exercise of ownership – must show reasonable expectation of possession, dominion and control) (Moore v. Regents of the University of California - P consented to a spleen removal operation and P's spleen was retained for research purposes w/o his knowledge or consent as well as samples of P's tissue and blood which Ds used to establish a pantented cell line which will yield billions of dollars in the future.)

No conversion where P would not have wanted his excised skin/cells anyway

  • Rule = right to exclude others from property is an important right which must be protected. (Jacque v. Steenberg Homes Inc - D was delivering a mobile home to the P and the P told the D not to cut across their land for delivery but D did it anyways.)

Policy: Private landowners should feel confident that wrongdoers who trespass upon their land will be appropriately punished so that they are less likely to resort to self-help remedies.

  • Rule = One cannot use property rights to injure/harm the rights of others; the right to exclude is not absolute. (State v. Shack- A farmer attempted to exclude an attorney from speaking to migrant workers living on the land.)

III. Adverse Possession and Gift

  • A. Acquisition by Adverse Possession:
  • 1. The Theory and Elements of Adverse Possession
  • A means by which interest in property can be transferred w/o the consent of the prior owner
  • General Rule = An adverse possessor should be able to obtain property at the time that the statute of limitations has passed

 Length of time varies by jurisdiction

Policy:This rule developed b/c of the idea that we should use property efficiently

  • Punishes unproductive users
  • Encourages productive users
  • If someone has been using your land for so long and you haven't noticed, you obviously aren't using your land efficiently
  • Five Elements of Adverse Possession (Pneumonic: An Ox Has Carried Cargo)

1. Actual Entry – time of trespass begins the statute of limitations

2. Open and notorious – have to use property as a true owner would and to give notice to the owner

3. Hostile or adverse – in defiance of the owner/can’t be there with permission

4. Continuous for the Requisite statutory period – to give the owner an appropriate period of time to discover someone on his or her property

  • To establish continuous possession for the statutory period, an adverse possessor can tack onto her own period of adverse possession any period of adverse possession by her predecessors provided there is privity

5. Claim of title (states differ in what this means – often disputed) –claim of right by the adverse possessor

  • i. Passive Adverse Possessor - You can only adversely possess property if you are an innocent or good faith trespasser; only then do u have a claim of title
  • ii. Active Adverse Possessor - You only have a claim of title if you know that the property you are trying to claim is not yours; an aggressive claimant
  • iii. It doesn't matter which way you do it
  • iv. A very small number of states require color of title (refers to a claim founded on a written instrument that is for some reason defective and invalid; so that in good faith the adverse possessor believes they own the entire property)

Color of title – defective form of title giving some rights but not all rights, usu. a written instrument which facially looks like you have the right to title

  • If you have color of title you may be able to show constructive possession for more property than you are actually, physically possessing
  • If you have color of title to the entire property, but you are only improving and cultivating ½ of it, you may be able to claim color of title for the entire property which is dependent upon who else has claim to the property
  • Rule = To acquire title to real property by adverse possession it must be shown by clear and convincing proof that for at least a statutorily limited amount of time there was an actual occupation under a claim of title. Elements of proof being either that the premises (1) are protected by a substantial enclosure, or are (2) usually cultivated or improved (Van Valkenburgh v. Lutz – D was using an un-owned lot for 35 years when P came along and purchased the lot and wanted D to get his possessions off the lot.)
  • Rule = Only when there is actual knowledge that the land you are adversely possessing is not yours will the statue of limitations begin running (Mannillo v. Gorski - D's son made additions and changes to the house including steps and a concrete walk which encroached upon the P's land to the extent of 15 inches.)
  • 3. The Mechanics of Adverse Possession
  • Rule = Continuity of possession may be established although the land is used regularly for only a certain period each year. It is not necessary that the occupant should be actually upon the premises continually. (Howard v. Kunto – D wanted to tack the time his predecessor owned the land onto his own for purposes of adverse possession but his predecessor only used the land as a summer home.)
  • Tacking:

An adverse possessor may establish continuous possession by tacking onto his time of possession, any period of adverse possession by predecessors in interest so long as there is privity of estate (a possessor voluntarily transferred to a subsequent possessor either an estate in land or physical possession).

An adverse possessor may not tack on a prior period of possession if he has ousted the prior possessor or if the prior possessor abandoned the property.

Tacking could occur by either:

  • 1. Successive adverse possessors
  • 2. Change in ownership
  • Change in ownership does not destroy adverse possession

Rule = A purchaser may tack the adverse use of its predecessor in interest to that of his own where the land was intended to be included in the deed between them but was mistakenly omitted, if the successive occupants are in privity. (Howard v. Kunto)

  • Disabilities:

Look at the statute on pg. 149 – same one on the exam

When the adverse possessor enters the property, if the true owner is a minority, of unsound mind or imprisoned at the time of entry the statute of limitations extends whichever is the longerof 21 years or 10 years added to the time when the disability is removed.

Rationale: Most legislatures think it is unfair for a statute of limitations to run upon a person who is unable to bring a lawsuit; therefore most statutes give an additional period of time to bring an action if the owner is under a disability. However, disability provisions are limited in 2 ways:

  • 1. Only the disabilities specified in the statute can be considered
  • 2. Usually only disabilities of the owner at the time adverse possession begins count

Ways disabilities can be removed:

  • Reach the age of majority
  • Declared of sound mind
  • Released from prison
  • Disabled owner dies

A disability is immaterial unless it existed at the time when the cause of the action accrued.

You cannot tack successive disabilities, only one disability applies

  • Rule = Adverse possession does not run against the government - local, state, or federal (for better or worse)

Rationale:Purpose of this rule is that the state owns its land in trust for all the people, and the gov't should not lose land b/c of the negligence of a few state officers or employees

  • 3. Adverse Possession of Chattels
  • Rule = The discovery rule - provides that a cause of action will not accrue until the injured party discovers, or by exercise of reasonable diligence and intelligence should have discovered, facts which form the basis of a cause of action - controls in actions involving the adverse possession of chattels. (O'Keeffe v. Snyder - P contends that she created 3 paintings which were stolen out of a gallery. She later discovered that the D was in possession of the paintings and the D is claiming title by adverse possession.)
  • B. ACQUISITION BY GIFT
  • A gift is a voluntary transfer of property without any consideration.
  • 3 elements –
  • (1) Intent – determined by statements and actions of donor

a. The donor must intend to make a gift

  • (2) Delivery

a. Actual

  • Physically handing over the gift

b. Constructive

  • When actual manual delivery is impracticable
  • The handing over of the means of obtaining possession and control (usually a key)
  • Rule = small, tangible objects must be handed over for delivery to be enforced. (Newman v. Bost – P was her lover’s housekeeper. On his death bed, her lover gave her keys to a drawer which contained his life insurance policy.)
  • You cannot have constructive delivery when actual delivery is possible.

c. Symbolic