Property – Fall/Winter 1999-2000 – Professor Helmholz

I.Personal Property

A.Ferae Naturae

  1. Mere chasing and pursuit is not sufficient to claim possession of a wild animal (Pierson v Post) – held that Post could not claim fox over Pierson
  2. He that hinders another in his trade or livelihood is liable to an action for so hindering him. (Keeble v Heckeringhill) – H shot K's waterfowl which K used as a lawful way to create his livelihood, so H is liable for value of fowl. BUT, K unable to quantify his loss, so he can't recover.
  3. Difference btwn KvH and Pierson – the nature of the act in Keeble was malicious, in Pierson it was just fair competition, no livelihood.
  4. The taker of a ferae naturae can claim possession if he has engaged in an act of appropriation that is reasonable in the nature of the case, as in according to the customs established by the nature of the practices involved. (Ghen v Rich) – Under the whaling customs of the area, the whaler did all possible to secure the animal, so wins against the taker.
  5. where the custom is widespread, of long duration, reasonable, and not contradicted by statute or more general law, the custom is a source of law.

B.Acquiring Abandoned Property

1.Abandonment – Requirements at Common Law

  1. Intent to abandon
  2. An action in furtherance of abandonment

2.Law of Salvage

Three elements must be established: (1) Property rescued must be in marine peril (2) Salvage service must be voluntary (3) Salvage must be successful, in whole or in part. Eads did not satisfy part three of the law.

(also see Law of Finds below)

  1. Occupation or possession of property lost, abandoned, or without an owner must depend upon actual taking of the property with the intent to reduce it to possession. (Eads v Brazelton) – Intent is not an act of possession (here, fixing buoys to a shipwreck were not enough to be possession, only indicated intent).
  • Different from Ghen or Haslem b/c here, Eads had done nothing but locate the lead, but made no act to possess it. Only marked the location to return later.

C.Finders' Rights

1.Law of Finds: "finders, keepers" – The key to ownership is whether the owner has abandoned the property, which can be express or implied. Traditionally applied to maritime property (ie, sunken ships), but has been expanded to include all chattel which has been classified as abandoned.

  1. Finder of lost or abandoned property has such a right in said property as will enable him to keep it against all but the true owner. (Armory v Delamirie) – Pl found a jewel, took it to D's shop for appraisal, apprentice took it to weigh it, and then shop refused to give it back. Court held for Pl.
  2. The finder of a chattel, though he does not require an absolute property in it, yet has such a property as will enable him to keep it against all but the rightful owner. (Clark v Maloney) – Pl found logs and tied them up, D came along and took them, Court found for Pl. – same basic rule as in Armory.
  3. Sometimes a non-trespasser will prevail over the owner of the locus in quo, but generally speaking a trespasser will never prevail over an owner when chattel is found on land. Since neither party has any title except by mere possession, the owner had, by ratione soli, the preferable right of possession. (Barker v Bates) – where logs washed up and embedded into P's land, D had no right to trespass to claim possession
  4. Where a person has possession of house or land, with a manifest intention to exercise control over it, and the things which may be upon or in it, then, if something is found on that land, whether by an employee of the owner or by a stranger, the presumption is that the possession of the thing is in the owner of the locus in quo. (So. Staffordshire Water v Sharman) – a worker found a ring in the pond on his employer's land, and court held for Pl (owners of the land).
  5. A man possesses everything which is attached to or under his land. But, a man does not necessarily possess a thing which is lying unattached on the surface of his land even though the thing is not possessed by someone else. (Hannah v Peel) – guest in house found brooch on top of windowsill, and court held that it belonged to finder, not to owner of house – different from Sharman b/c the owner of house never took possession of the house, so therefore could not assert ownership over the lost item.
  6. The fact that the property was found embedded in the earth and fact that D was a trespasser is sufficient to defeat any claim to property by D. (Favorite v Miller) – D used metal detector to find a piece of statue on Pl's land, dug ten feet under surface to remove statue, and then tried to sell it. P prevailed, D ordered to return statue.
  7. Treasure Trove:
  8. exception to the default rule that chattel embedded in the soil belongs to the locus in quo.
  9. any gold or silver, in coin, plate or bullion found concealed in a house, in the earth or any other public place.

D.Bailments

Bailment is the transfer of possession of personal property to a person who is not its owner and for a limited purpose.

Differences between a Bailment and a:

DEBT deposit in a bank is not considered a bailment, it is a debt, because the bank uses the money as if it were their own until the depositor claims it back.

AGENCY Sales clerk is not a bailee for the store, but an agent, b/c sales clerk has custody, but not control as in a bailment.

CHATTEL MORTGAGE A car purchase, eg: if you keep up payments, car co. can't take back the car, but a bailor could take back chattel from bailee at any time.

LEASE eg, a storage unit: not a bailment, b/c the storage place is not responsible for anything stored in the unit, and has no knowledge of what is being stored there.

Examples: Car rental? – lease UofC Card? – maybe a bailment? More likely a debt, though, since UC can take it back.

General rule of bailments: Bailee has a duty to exercise ordinary care, or care commensurate to the circumstances to keep the property in good condition.

  1. Three Types of Bailments
  2. Mutual Benefit of bailor and bailee (nongratuitous bailment) – standard ordinary care under the circumstances and ordinary negligence
  3. Sole benefit of the bailor (gratuitous bailment) – only slight care and liable only for gross negligence
  4. Sole benefit of the bailee – extraordinary care and liable for slight negligence.
  5. Contract of bailment requires mutual assent expressed either by conduct or by words. (Peet v Roth Hotel) – hotel clerk accepted envelope and it was stolen, and contained $2000. ring. Court found for owner of ring (bailor). B/c clerk saw the ring, and accepted it, its identity and attributes were as known to D as they were to P (except actual value), and D was under duty to exercise ordinary care.

When measuring liability, bailee has burden to prove no negligence in relation to lost property.

If, however, it was a coat in a coatroom with a valuable item in the pocket that was never seen, check girl would not be responsible (Samples). B/c it is not reasonable under ordinary circumstances to expect anything of value to be inside a coat pocket.

  1. A bailment for hire is created when there is sufficient delivery and control of possession. (Allen v Hyatt Regency) – court held that owner of a car in hotel parking garage sufficiently delivered vehicle when she locked the car and kept the keys, and the ticket received was acceptance by the garage attendant.

Prima facie evidence of negligence (required for liability in bailment cases) is Failure to Return the Bailment

  1. An involuntary bailee is not under the slightest duty to care for or guard the subject of the bailment and cannot be held for what would be the grossest negligence in the case of a voluntary bailment, but that, in case the involuntary bailee shall exercise any dominion over the thing so bailed, he becomes as responsible as if he were a voluntary bailee. (Cowen v Presspich) – court held that D took the risk of delivering the bond to the wrong messenger, so there was no involuntary bailment. By assuming that risk, they exercised dominion over the bond.

Case eventually was overturned, and the dissent became the majority opinion, which said: "it was not unreasonable to suppose that the messenger might be waiting or that, if he had left, no thief would be in the office who would claim to represent the P. D cannot be held liable for such an error in judgment."

E.Gifts – Inter Vivos

  1. Three Requirements for Inter Vivos Gifts: different from contract b/c of absence of consideration (think about them separately and in order)
  2. Intent
  3. Delivery
  4. Acceptance

side note – inter vivos gifts involve an irrevocable present transfer. Must show intent of gift to be inter vivos

Delivery can be constructive:as when the donor gives to a 3rd party to hold for the donee – also no need for it to be continuous

  1. In order to transfer property by gift there must either be a deed or instrument of gift, OR there must be an actual delivery of the thing to the donee. (Irons v Smallpiece) – P's father allegedly promised a gift of 2 colts to him, but no delivery of the colts was made, and so property therein had not vested in P by the gift, but continued in his father, and passed to D (the legatee).
  2. Proponent of the gift has the burden of proving the three components that make a gift by clear and convincing evidence (Gruen v Gruen) – With an exchange of letters, P proved the gift of a painting was of value to him, presented clear and convincing proof of his acceptance and had letters 17 years old to verify gift and to show nature of gift from father to son. Court held for Pl.

F.Gifts – Causa Mortis

RHH comments: courts have hostility toward gifts causa mortis as they are an exception to the Statute of Wills. Law states that if you want to make a gift that goes into effect at the time of your death, you must comply with Statute of Wills.

Statute of Wills: requires a written instrument indicating a person's testamentary intent, signed by the testator and by witnesses.

  1. Gifts Causa Mortis have specific elements that must be satisfied:
  2. Must be intent to make a gift
  3. Gift must be personal property
  4. Gift must be made while donor is under apprehension of death
  5. Possession of property given must be delivered at the time of gift to donee.
  6. Quirks of Causa Mortis Gifts
  7. Gift can be revoked at any time prior to the death of the donor
  8. After death, gift is irrevocable
  9. If donor recovers from imminent death, State laws rule as to whether the gift is revoked.
  10. Delivery of gift must be actual and complete, such as deprives the donor of all further control and dominion. (Woo v Smart) – a set of checks did not satisfy the delivery requirement for a gift causa mortis, because until the check is paid by the bank, the donor retains control and dominion over the funds (can stop payment, etc.).

G.Unauthorized Possession and Bona Fide Purchasers

Nemo dat quod non habet – You cannot give greater title to something than you have.

  1. One who has acquired possession of property, whether by finding, bailment, or by mere tort, has a right to retain that possession as against a mere wrongdoer who is a stranger to the property. (Anderson v Gouldberg) – neither P nor D had superior title except by mere possession, so P has a right to retain possession, even though P acquired logs by trespassing. Only the true owner would have a claim against P.
  • Thievery was not an issue in this case, because P cut down standing timber, which is real property, and can't be considered "stolen" – only the title right to possession is in question.
  • If it appears that the P, although in possession, is not in fact the owner, the presumption of title inferred from the possession is rebutted, and it would be manifestly wrong to allow P to recover the value of property, hence, the P must show title and possession, or a present right to possession. (Russell v Hill)
  • Ownership of property is only presumed from possession, and though action of trover may be maintained upon such presumption against a wrongdoer, the presumption cannot stand when the contrary is shown. (Russell)

Though this case seems contrary to Anderson outcome, it is because the courts use a number of different tests for case law, and the nature of what the D has done in these cases must have something to do with the outcome.

  1. Exceptions to the Common Law Title Rule: (CL is nemo dat quod non habet)

Market Overt  market where one could be secure in purchasing without titles.

Money in negotiable instruments if they are stolen, they must be treated as an exception to the general rule of chattel title laws.

Voidable title UCC 2-403(1) – passage of title by fraud – codifies and defines common law rules of voidable titles – eg, a dishonored check; title acquired by fraudulent means.

Entrusting to a merchant 

Equitable Estoppel 

  1. Some notes on titles:
  2. If you purchase something and promise to pay later on, title transfers immediately  it is a debt
  3. Title in a loan does not transfer  title remains in the lender, though possession went to the borrower
  4. In Porter, we have a loan with an option to purchase later on. (a consignment)  title passes when the option is exercised.
  5. Statutory Estoppel: D claims they can bar recovery(of a painting) b/c of UCC §2-403, which says: 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 "a buyer in the ordinary course of business." which is a person in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind(UCC § 1-201). (Porter v Wertz)
  6. Equitable estoppel: also called estoppel in pais: Can only arise when a person has induced another person to act in a particular manner. The doctrine prohibits a person, upon principles of honesty and fair and open dealing, from asserting rights, the enforcement of which would, through his omissions or commissions, work fraud and injustice. (Porter v Wertz) – Wertz was not "a person in the business of selling goods of that kind", and Feigen(the art dealer) was not "a person .. in good faith" in the transaction with Wertz. Neither Feigen nor his agent, Mrs. Drew-Bear made any investigation to determine status of Wertz as an art merchant, therefore, no statutory estoppel, so Pl can recover painting. Why? B/c Porter did not intend for VonMaker to have title in the painting, only possession, and possession without more is insufficient to create an estoppel. Court says "If rightful owner has invested another with the usual evidence of title, or an apparent authority to dispose of it, he will not be allowed to make a claim against an innocent purchaser dealing on faith of such an ownership." – Here, P did not invest any such evidence of title.

II.The Law of Neighbors

A.Adverse Possession

  1. A Law of Prescription: Statute of Limitations requiring that actions to recover property be brought within a certain number of years from the time the cause of action accrued.
  2. Five-part test: In order for title to be acquired, possession must be:
  3. Actual –ordinary use which the land is capable and such as an owner would make of it.
  4. Continuous for the statutory period – can't only possess seasonally, eg.
  5. Exclusive – not necessary that all use of property by the public be prevented, but this is the basic requirement for exclusivity.
  6. Hostile – arises from adverse possessor's intention to claim exclusive ownership
  7. Open and notorious – must be open and notorious so record owner has notice.
  8. Exceptions to SOL running: (called disabilities)
  9. infancy - under 21 years old
  10. insanity
  11. imprisonment
  12. Once the disability is removed, claimant has 10 years to bring a claim.
  13. Relation Back Doctrine: once the statute of limitations has run, the adverse possessor's title is treated as though it had existed from the moment his possession began.
  14. When the statute has begun to run against the ancestor or other person under whom the P claims, it continues to run against the P, notwithstanding any disability when the right accrues to the latter. (Fleming v Griswold) – where a woman who was married under the age of 21 tries to claim property of her father which had been adversely held by D for over 25 years. Court found SOL to have run vs P. WHY? b/c the SOL began to run against her father before he died, so the disability on his heirs does not bar the SOL from running.
  15. Hostility arises from intention of adverse possessor to claim exclusive ownership of the property occupied. (No specific intent directed toward property owner is required). (Anderson v Cold Spring Tungsten) – Court held that there was no basis in the record to support the conclusion of the trial judge that entry upon the property was not hostile and adverse. Found that cabin owners, even though entered and occupied the property peaceably and without knowledge of another owner, it still satisfied the hostile and adverse requirements. Court also held that exclusivity does not require possessor to prevent all use by the public.
  16. Mere possession is not enough to sustain a claim of adverse possession.