Possession and the Intial Acquisition of Property Rights the Right to Exclude

PROPERTY

POSSESSION AND THE INTIAL ACQUISITION OF PROPERTY RIGHTS THE RIGHT TO EXCLUDE

ACQUISITION BY OCCUPATION, “DISCOVERY,” AND CAPTURE[1-12]

- occupation doctrine …the capture of an item is sufficient to gain possession, but the chase of such an item is not sufficient to gain possession

-sometimes applies to wild animals, oil, gas resources, and sometimes water

-this goes against the principle of first in time

-in close cases, courts may look to customs or usages prevailing in the activity or trade involved (Ghen)

-malicious interference with a chase is not acceptable, but if the injury is a consequence of fair competition then one may not be liable (Keeble)

-power to exclude (bundle of sticks), not achieved in Post

-creates incentive for competition

-accession doctrine…-the ownership of one thing sometimes depends on the ownership of another…

-applies to hard rock minerals, and sometimes water

-ownership of animal may depend on whether or not it is on one party’s land

-rationale soli doctrine…constructive possession of animal

-rarely used doctrine

ACQUISITION BY CREATION[12-14]

-labor theory…expenditure of work, time, and cost into creating property provides ownership for the creator

-rewards labor and investment

-the absence of property rights can dampen production, but recognition of hem can create costly monopoly power

-too many property rights (IP) can stifle competition

PROPERTY IN ONE’S OWN PERSON[14-18]

-Conversion

-To establish a conversion, P must establish an actual interference with his ownership or right of possession….Where P neither has title to the property alleged to have been converted, nor possession thereof, he cannot maintain an action for conversion

-rejection of conversion claim pertaining to usage of biological materials extrapolated from P’s body (Moore)

-decision rests on economic incentives (research), do not want to commodify the body

THE RIGHT TO EXCLUDE AND ITS LIMITS[18-21]

-the right to exclude (others from the use of your property), and the related right to include (arguably the power to transfer)-- the power to allow selected others to enjoy the use of your property -- together are necessary and sufficient conditions of transferability

-depending on what you are doing with your property, you may waive your right to exclusion

-i.e. the ownership of real property does not include the right to bar access to governmental services available to migrant workers and hence there was no trespass within the meaning of the penal statute. (Shack)

-also, civil rights legislation forbids various forms of discrimination

- Some argue that limitations on the right to exclude can be defined by the reliance interest in property

POSSESSION AND THE ACQUISITION OF PROPERTY RIGHTS IN OTHER’S PROPERTY

FINDERS OF PERSONAL PROPERTY[21-28]

-The finder of the lost property holds it, at least for a certain time, in trust for the benefit of the true owner; thus he is a custodian, or “bailee” for the true owner. What is important for our purposes here is that the finder has right superior to those of everyone except the true owner.

-prevents disorderly scrambles for possession

-this goes against the principle of finders, keepers

-Property ownership is relative

-Finder may have property right relative to third party but not to the true owner.

-jus terii (defense)

-in an action to recover real or personal property (either for specific relief or for damages) a party will acknowledge that he or she is not the owner and thus isn’t really the person most entitled to the property, but argues that opposing party should not recover because the he also isn’t the owner.

- some courts conclude that concern about protecting the true owner A (when and if s/he shows up) counsels against allowing B (the prior possessor) to recover damages from C (the second possessor) in the first lawsuit-- but most courts do not draw this conclusion. That is, in a damages context, the jus tertii defense is sometimes treated as valid, though the majority rule is to the contrary (we do not want to risk having C having to pay double damages). On the other hand, almost all US courts would allow the non-owner/prior possessor of land (B) to recover the land in an ejectment action against C.

-Analysis of finders cases

-Is the finder contending with an owner?...owner wins

-Is finder contending with subsequent possessor?...finder wins

-Is finder contending with premises owner?

-Is property lost or mislaid?

-Lost…

-if it is in or attached to the ground…premises owner wins (PO constructive possession)

-On the ground…

-Finder is working for the owner…premises owner

-Anyone else…

-Open to public

-And owner doesn’t know its there…finder

-Bridges

-Closed to public (private)

-And owner does know its there…premises owner

-SSW, Hannah

-Owner does not know object is there, finder is meritorious, owner is not in possession of land…finder (Hannah)

-Without one of these factors…maybe premises owner (although we do not have a case here)

-Mislaid…premises owner

ACQUISTION BY ADVERSE POSSESSION[28-46]

-AP both clears title of Owner and also grants title to Possessor

-we should always have one owner

-AP comes into play when statute of limitations (for trespass or ejectment) runs

-Once acquired, this new title “relates back” to the date of the event that started the statute or limitations running, and the law acts though the adverse possessor were the owner from that date.

-It is useful, in thinking about the law of adverse possession, to consider the doctrine from different PERSPECTIVE: (1) the perspective of an owner of property who may lose it by adverse possession, and (2) the perspective of a possessor of that property (not the owner), who may be about to become the owner by adverse possession.

-review AP problem from side of perspectives of lax/non-lax owners and diligent/non-diligent possessors

-policy rationales: punish owners, reward possessors, clarify ownership

-pragmatic rationales:

-SOL has run out and Owner cannot sue

-We do not want to create an incentive for self-help

- Possessor has the rights to the property against anyone except the Owner (jus tertii)…once the Owner loses his right due to SOL, the Possessor gains all rights and becomes the Owner.

-AP is usually used as a defense, but sometimes in declaratory judgment actions

-Five qualitative elements of AP:

(1) the possession must be hostile

-Hostility= lack of possession + lack of estoppel (i.e. cannot say “don’t worry about me, I’m not an AP”)

-standards

-objective standard

-current standard

-state of mind is irrelevant

-good-faith standard (subjective test 1)

-aggressive trespass standard (subjective test 2)

-possession can start as hostile and become non-hostile

(2) it must be actual

-Possessor must be doing something that Owner can sue him for…Possessor must assert actual possession by using land as a reasonable owner would

(3) it must be open and notorious

-Most courts are going to say that the test is actual or reasonable (constructive) knowledge (in the exercise of due diligence) of AP

-minor encroachment may not suffice

(4) it must be exclusive

-Possessor must be the only one has been in possession

-if the ownership is collective it may indeed be enough determine the ownership as exclusive

-must exclude as a reasonable owner would

(5) it must be continuous

-Possessor’s stream of possession cannot be broken by the owner

-it would not be considered discontinuous if a reasonable owner would not have been continuous in a particular situation

-and one quantitative element…SOL(SOL runs when all 5 other elements are in place)

-the owner cannot break the possession of the possessor

-The claim of AP may continue unbroken by a succession of tenants and where this occurs the adverse possession may be just as effectual as though the premises were held during the whole period by one person. All that is necessary in order to make an adverse possession effectual for the statutory period by successive persons is that such possession be continued by an unbroken chain of privity between the adverse possessors.

-privity allows Possessor to tack on time of possession from previous Possessor (only when transfer is voluntary)

-thus, if the transfer is not voluntary, the time cannot be tacked on by the subsequent Possessor

-cannot tack if property was abandoned

-sometimes if original Possessor regains possession from third-party possessor, he may be able to tack on the third-party possessor’s time of possession onto his own claim for AP

-Possessor may be able to tack on time even if land changes the original Owner devises his life estate

-Most American states say that if the SOL of has occurs entirely during the life estate, the claim of the individual being granted remainder has not expired

-In sum, a change of ownership does not restart the clock. A change of possessorship, if voluntary and intentional (thus establishing privity), does not restart the clock. A change of possessorship, if involuntary, does restart the clock.

-to be a possessor requites that you act like an actual owner

-disability and AP

-Statutory provisions often are extended (“tolled” is the technical word) when the Owner has a legal disability

-Disability must be present when the action accrues

-focused on “laxness” of owner

-owner + disability…owner with disability= 10 year toll (for example)

-you either get the full 21 year SOL or you get 10 years from the removal of he disability, whichever comes later

-when a continuously disabled person dies, the heir inherits that owner’s toll and may bring the action within 10 years of the end of the owner’s disability or death

-when you have two disabilities when the claim accrued, you get the 10 year toll from whatever disability is removed later

ESTATES IN LAND

FEE SIMPLE[47-50]

-The fee simple is as close to absolute ownership as our law recognizes. It is the largest estate in terms of duration. It may endure forever.

-inheritance of a fee simples

-If a person dies intestate (that is, without a will), the decedent’s real property descends to his issues, if no issues then heirs, if no heirs than a spouse, if not spouse then collateral kin

-if no next of kind can be found, then the property escheats to the state

-fee simples absolute

-could last forever; present estate; inheritable; no conditions, it is absolute

-no limitations to inheritability

THE FEE TAIL[50]

-A fee tail is an estate in land created by a conveyance “to A and the heirs of his body.” It is an estate precisely tailored to the desires of the medieval dynasts. The fee tail descends to A’s lineal decedents (“heirs of the body”) generation after generation, and it expires when the original tenant in fee tail, A, and all of A’s descendants are dead.

-Fee tail is not really important today

-most states will give the grantor a fee simple if today he says “to A and his heirs”

TRANSFER VOCABULARY[50-51]

-Property can be transferred either while the transferor is living (inter vivos) or effective upon death of the transferor. Transfers in the second category – those effective upon death of the transferor – can be done by will, or in the absence of a will (intestacy), happen by operation of law. Each situation has its own special vocabulary:

-Transfers effective while the transferor is living (inter vivos)

-Real property (land and building) is granted or conveyed to grantee by a written instrument called a deed

-Generally deeds are not used to transfer personal property inter vivos

-If personal property is transferred inter vivos by gift it is given to a donee

-Transfers upon death by operation of law in the absence of a will (intestacy)

-Real property descends to heirs

-Personal property is distributed to distributes

-Transfers effects upon death by will

-Real property is devised to devisees

-Personal property is bequeathed to legatees

OVERVIEW OF THE ESTATES SYSTEM[51-54]

-Estate classification variables

-(1) how long it can potentially last

-(2) when it begins

-(3) how and by whom it is inheritable

-(4) whether there are conditions that must be satisfied in order to take possession of the property (conditions precedent) and/or conditions that, if violated, cause the possessor to lose the right to the property (conditions subsequent)

-A tip about nomenclature : Future interests must be created originally in either the grantor or in a third party (that is someone other than the grantor and other than the grantee of the present interest). If a future interest created originally in the grantor or in a third party is subsequently transferred to the other kind of grantee, it still keeps its original label

LIFE ESTATES[54-56]

-A conveyance “to A for life” gives a A a life estate that lasts for the duration of A’s life. A can transfer his life estate to B, in which case B has a life estate pur autre vie – that is, an estate that is measured by A’s life span, not B’s. If B dies during A’s lifetime, the life estate passes to B’s heirs or devisees until A dies. Every life estate is followed by a future interest – either a reversion in the transferor or a remainder in a transferee.

-Words needed to create life estate… “to A for life”

-O could also say “to A for the life of B”

-4 Attributes:

-duration: life of the person the estate is measured by

-cannot leave life estate to corporation

-inheritability: life estate is inheritable when it is a life estate pur autre view

-present or future interest: you can stack life estates

-to “A for life, then to B for life”

-to A…present estate

-to B…future estate

-conditions

-usually absolute

-but life estates can be conditional

-rare though because the interest is relatively short term

-Reasons for the life estate

-Person gets to control land after his death

-Reflects past institution of gender roles

-Husband often gave wives a life estate, but in essence took away the power to dispose of it

-Relationship between AP and life estates

-ex: Suppose that O wishes his wife, W, to have the use of his land for the rest of her life after he dies and wishes his son S to have the land after W dies. He devises a life estate to W with the remainder to S.

-Now suppose that after O dies, W tires of the old place and moves elsewhere. AP enters and possesses for the statutory period. Now W dies and S brings an action of ejectment against AP. What result? Most courts hold in this situation that S's action is not barred by the statute

-you cannot “devise” a life estate

WASTE DOCTRINE[56-59]

-In the absence of any contract, express or implied, to use the property for a specified purpose, or to return it in the same condition in which it was received, a radical and permanent change of surrounding circumstances, such as is presented in the case before us, must always be an important, and sometimes a controlling, consideration upon the question whether a physical change in the use of the buildings constitutes waste.

-Two policies behind waste doctrine:

-(1) maintaining economic interests of future/concurrent owners

-the preservation of property for the benefit of the owner of the future estate without permanent injury to it

-an improvement for one purpose, may be a waste for another

-(2) maintaining identity of the property

-somewhat obsolete… in the past, one concern was the present owner would not be able to tell what property was his because land markers have been changed (this is before the emergence of recording)

-Remedies in waste cases

-(1) injunction if you get there in time

-(2)damages if you don’t get there in time

-(3) if present owner commits waste, they forfeit the property to the future owner

-Two categories of conduct amounting to waste

-Affirmative waste

-Voluntary acts

-Permissive waste

-Failure to take responsible care of the property

DEFEASIBLE FEES AND ACCOMPANYING FUTURE INTERESTS[60-63]

(1)Fee Simple Determinable

-Language: G grants “To A and his heirsso long as (or: while, until) the land is used for school purposes” {+ optional (nonessential) addition: “if the land is used for other purposes it shall revert to G and his heirs”}

-FSD + (optional and nonessential POR)

-A violation of the stated condition is said to automatically give the holder of the possibility of reverter the right to possession of the property; the holder of the possibility of reverter does not have to assert his/her right.

-Important: This means that if the holder of the P.O.R. takes no action to re-enter or retake the land after the condition is violated and this goes on for the period of the statute of limitations the P.O.R. expires and the fee becomes absolute by operation of adverse possession

-associated future interest: in the above grant G has the “possibility of reverter” (P.O.R.)

-POR-when condition is violated the property automatically comes back to the grantor

-main attributes

-normally a present fee, but you could make it future

-could last forever as long as you keep to the conditions

-inheritable

-vested estate because there is no condition precedent, but you can lose it

-FSD can transferred inter vivos or by death by will or by intestacy

-most states allow transfer of the possibility of reverter inter vivos

(2) Fee Simple on Condition Subsequent

-Language: G grants: “To A and his heirs, but if (or: “provided that if”, or upon the condition that if) the land is used for other than school purposes,Gshall have the right to enter and declare the estate forfeit.”

-associated future interest: in the above grant G has the “power of termination or “right of entry” (ROE)

-FSCS + (“power of termination” or “right of entry”)

-A violation of condition is said to confer on the holder of the power of termination a discretionary right to take back the land which has to be asserted to take effect. But there is no fixed time limit for asserting this right of entry. The traditional view is that the statute of limitations on an ejectment action to retake the property does not start running until the right of entry is asserted. This means the statute of limitations on the action to recover the land after a violation of the stated condition is less likely to run out than the statute of limitations on the action to recover the land after a violation of the stated condition where the estate was a Fee Simple Determinable.