Property: The owner of a particular thing is granted certain legal rights with regard to the thing they own. The owner is allowed to assert those rights against everyone else.

·  Property rights convey the right to benefit or harm oneself or others.

Property is divided into two general categories: (Split into two because of mobility of the property)

·  Real Property: (also called realty or land) which is land and everything permanently attached to the land.

o  Law of Fixtures: Things permanently attached to real estate or things which can’t be severed from the real estate without substantial effort are fixtures. Fixtures are legally treated as part of the real estate they are attached to.

·  Personal Property: (also called personalty) is everything other than land. Split into two kinds:

o  Tangible personal property: (Also called chattels) refers to moveable property, which has a physical existence that you can see, feel or touch.

§  Conversion: Any unauthorized act that deprives an owner of personal property without his or her consent.

o  Intangible personal property: property that lacks any tangible or physical form

§  (I.e. intellectual property, customer goodwill, or contract rights)

·  Misappropriation: the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any person with a responsibility to care for and protect another's assets (a fiduciary duty).

Once something is designated as property a bundle of rights is attached to that thing deemed as property. The bundle of rights includes:

1.  Right of possession

2.  Right to use

3.  Right to transfer (also called right to alienate)

4.  Right to exclude others

Property rights are created by:

·  Discovery: discovering a new piece of land.

o  Since most land is already inhabited the only place left to discover is space.

·  Conquest: Invading and annexing neighboring countries by military force.

·  Capture (first possession): If something is unowned the first person to capture or take control of it becomes the owner.

·  Creation: When someone creates something new the creator is entitled to acquire property rights for their creation. (Intellectual property rights)

Property is a legal definition the law attaches to things that society has decided should be protected.

·  The determination that something is property is a policy-based decision.

·  The dominant legal theory underlying U.S. property law is the Utilitarian theory:

o  That a primary function of property rights is to promote the efficient use of resources.

§  Under this theory things are designated property when doing so promotes the best interests of society.

Bundle of Rights:

1.  The right to exclude others from your property

2.  The right to posses and use your property (the right to possess (or possession) is sometimes referred to as the right to occupy (or occupancy))

3.  The right to transfer your property (historically this was often called the right to alienate property or the right of alienation)

Ownership of property

There are three ways in which a person can own property:

  1. Communal ownership: the community denies to the state or to individual citizens the right to interfere with any person’s exercise of community owned rights.
  1. Private ownership: the community recognizes the right of the owner to exclude others from exercising the owner’s private rights.
  1. State ownership: the state may exclude anyone from the use of a right as long as the state follows accepted political procedure for determining who may not use state-owned property.

Once a person acquires property rights they continue to own the property unless the rights are either:

·  Transferred to another person or

·  The rights are extinguished die to some legal rule

o  Rights can be transferred by gift, sale, death via a will, lost via abandonment or adverse possession, or the government takes your property away (typically called a “taking)

Possession (Chapter 2)

Possession: To exercise dominion and control over something with the intent to assert your rights upon it.

There are two types of possession for this class:

  1. Actual possession: physically having control over an object.
  2. Constructive possession: (is made up so it’s just for policy reasons) Knowing something is within your ability to actually possess and have control over it, but not physically having control over it.
  3. Clam hypo:
  4. The state knows that the clam is buried beneath the beach or has reason to believe it’s there. They have the ability to go get it and control it, but they do not, so they do not have actual possession of it, but rather constructive possession.

Wild Animals

A thing capable of ownership but not then owned belongs to the person who acquires actual or constructive dominion and control over it and has the intent to assert ownership over it.

·  Wild animals in their natural state are considered unowned property.

Pierson v. Post:

·  Did Posts’ chase of the fox constitute him having possession of or any property in the fox to have action against Pierson for killing and taking him away?

o  Even though customary practices allowed the first pursuer of the animal to have possession of it, the chase of the fox was for sport thus the underlying policy reason for their decision was to allow Pierson to get the fox since he deprived the beast of its natural liberty and had actual possession of it when he did.

§  When Pierson killed and captured the fox is when someone possessed it.

Ghen v. Rich

·  Did Ghen have possession of the whale just because he and his men shot it with their bomblace and let it float out to sea hoping it would float up to land, which was customary in their practices?

o  Based on customary practices found within the field of whaling Ghen did have possession over the whale.

o  If the court ruled he didn’t then that would shut down a whole economic business, which was a major part of a certain areas livelihood, which became the underlying policy reason for them to choose to follow customary practices and give the whale to Ghen.

§  They decided that unless the decision went the way it did, that branch of industry would cease because no one would engage in it for fear that anyone would just be able to take the thing they would so hard for simply by chance of finding it.

Keeble v. Hickeringill

·  Did Keeble have possession of the wild ducks when they simply just landed on his pond and if so did he have an action against Hickeringill for scaring away his property?

o  The owner of the land has possession of the wild animals that are on the owner’s land until the animals take off and leave.

o  This gives Keeble an action against Hickeringill because he was simply trying to cause damage to his occupation maliciously. If he had set up another decoy pond next door and was spoiled the custom of the plaintiff there would be no action because he had as much liberty to use his land for what he wants to.

Common law rights to fugitive resources

Gas and oil are treated just like wild animals:

·  Whoever has control over them is the one who has possession and property rights to them.

o  Gas and oil belong to the owner of the land they are under as long as they are on or in it and are subject to the landowner’s control. Once they escape and go into another’s land or come under another’s control, that new person now has ownership of it.

§  When they escape or are restored to their natural wild and free state, the dominion and individual proprietorship of any person over them is at and end and they resume their status as common property.

Common law water rights

·  Common law rights to underground water (referred to as ground water or percolating water) are established under one of two rules:

1.  Absolute ownership rule: (referred to as the English Rule) the landowner owns water under their land and can do whatever they want to do with it. Any damage that results to their neighbors land is not actionable

2.  Reasonable Use Rule: (referred to as the American Rule) the landowner is free to use water under their land in any reasonable manner in connection with any reasonable use of their land. If such use results in injury to an adjacent land, no liability arises against the landowner.

·  Common law rights to streams (referred to as riparian rights) are established under one of two rules:

  1. Natural Flow Rule: each riparian owner (a riparian landowner is a landowner whose land borders a stream or whose land has a stream running across it) has the right to have the flow of water across or adjacent to her land maintained in its natural state without it being diminished in quality or quantity.
  2. Each riparian owner has the right to use the water for natural purposes
  3. Riparian owners can also use the water for extraordinary needs or purposes as long as is doesn’t materially affect the water.
  4. Reasonable use rule: Each riparian owner has full use of the water for any beneficial use provided only that it does not unreasonably interfere with the beneficial use of other riparian owners.

·  Common law rights as to diffuse surface water (water from rain of melting snow) established under three rules:

1.  Natural Flow Rule: (civil law rule) each landowner can only discharge surface water from their land via natural drainage paths.

2.  Common Enemy Rule: Each landowner has the right to expel unwanted diffuse surface water from their land without regard to its effect on neighboring land.

3.  Reasonable use rule: each landowner has the right to discharge diffuse surface water from their land in a reasonable manner.

Prior appropriation: first in time has the right to use the water in the way they want, so long as it’s reasonable and beneficial, and has the right to use the water in the future while excluding others from it.

Externalities: whenever someone makes a decision about how to use resources without taking full account of the effects of the decision on others because they are decisions that will fall on others and not the original person. (They are external to that person)

·  As a consequence of externalities, resources tend to be misused or misallocated, which is to say used in one way when another way would be better for society.

o  Externalities are not an effect of one person’s activity on another person, rather it’s an effect that the first person is not forced to take into account.

Internalizing: refers to a process in which there’s usually a change in property rights that enables effects to bear heavily on all interacting parties.

Internalizing an externality is the act of making a change in a company’s private costs or benefits in order to make them equal to the company’s social costs or benefits.

Property to one’s own person

Medical advances and reasonable expectations in patients

·  Moore v. Regents of the University of California

o  Do patients have rights to thing cells or anything from their body once it is outside of their body?

§  You do not have possession of something once it is outside your body therefore you do not have any rights under the bundle of rights to that property.

Chapter 2: Subsequent Possession: Find/Adverse Possession/ Gift (Chapter 3)

Acquisition by find: the finder of an object does not acquire absolute property rights or ownership of the object, but he does acquire possession rights that enable him to keep it against all people but the rightful owner.

·  The finder must actually come up/discover the thing and have the intent to possess it.

Black Letter Rules of Law

These are not absolute property rights, but they are rights to exclude everyone from using what you possess besides the real, true owner.

Under Common law, there are four categories of found property:

1.  Abandoned property:

a.  Property is abandoned when the owner no longer wants to possess it. Abandonment is shown by proof that the owner intends to abandon the property and has voluntarily relinquished all right, title, and interest in the property. Abandoned property belongs to the finder of the property against all others, including the former owner, which means that ownership transfers from the original owner to the finder.

i.  Focuses on the intent of the owner to abandon the property and get rid of their ownership.

2.  Lost property:

a.  Property is lost when the owner unintentionally and involuntarily parts with its possession and does not know where it is. Stolen property found by someone who did not participate in the theft is lost property. The right of possession of lost property belongs to the finder, as against all persons other than the true owner.

3.  Mislaid property:

a.  Property is mislaid when the true owner intentionally and voluntarily places item in a certain place, then forgets where it is or intends to gather later. The key is voluntary placement.