INTRODUCTION

CHAPTER 1

The Law of Property

    INTRODUCTION

Some courses on property law begin with the analysis of cases—sometimes they concern the acquisition of personal property, sometimes wild animals; and sometimes they introduce the subject with a U.S. Supreme Court case concerning the Fifth Amendment’s takings clause or with a case about Native American claims to property that puts our American system into perspective. Historical and philosophical readings about property law’s development might also be used to gain perspective.

  Different perspectives on the institution or the idea of property have been around for a long time. These perspectives have long been controversial. Plato and Aristotle disagreed as to property’s role in society. Since that time, property has been viewed variously as the product of one’s labor (John Locke), as an extension of one’s will (Georg W. F. Hegel), as the product of a person’s settled expectations (Jeremy Bentham), and as the foundation of capitalism and class conflict (Karl Marx).

  In the first year of law school, property is studied along with the two other wide-ranging areas of private and commercial law, the law of torts, and the law of contracts. The three subjects are studied in separate classes, but even though the signs on the classroom doors are different, this curricular separation should not lead you to the conclusion that the three subjects are entirely distinct. They are not. They are constantly intersecting. Property and torts, for example, have in common an historic origin in the cause of action for trespass, and often a substantive statement of a rule of property law begins or ends with the phrase “absent an agreement to the contrary”—meaning that persons involved are free to make a contract providing what the rule does not. In particular, the law of landlord and tenant (pertaining to leases) is a recently developed combination of contract and property law. Property, contract, and tort doctrines constantly arise and intersect in any law practice.

  The subject matter of a course on property typically covers several topics. There may be a roadmap to your course in contracts, but with property there is no one roadmap; instead, there are at least six roadmaps. Thus, to the beginning student, the course’s subject matter may seem huge. Personal property, common law estates and concurrent interests, landlord and tenant, real estate transactions, easements and covenants, and public land use regulation are the topics most frequently mapped in the first-year course on property.

  Although some of these subjects will be unfamiliar if you are reading this during your first semester or quarter of law study, you will quickly realize that each has its origins in a different historical era of our legal system’s development. The economic and social context in which the rules of each arose shaped it in different ways: Each developed in spurts and at different times. For example, common law estates developed rapidly in the late Middle Ages, while the law of landlord and tenant developed most quickly over the past several decades. Our legal system’s rules for real estate transactions developed in response first to the system of estates, then to the development of the executory contract in the eighteenth century, and finally to American modifications in the English system designed to suit our own needs. The law of easements and covenants developed rapidly in the nineteenth century in response to the industrialization and urbanization then taking place. Our system of land use regulation developed gradually over the last century, but did so more rapidly during some decades—the 1920s, the 1950s, and the 1970s—than during others.

INTRODUCTION

CHAPTER 1

INTRODUCTION

I. “PROPERTY” GENERALLY

A. General definition:  A person may be said to hold a property interest, in the broadest sense, if he has any right which the law will protect against infringement by others. In addition to tangible property (land and chattels), courts have increasingly recognized broad categories of intangible property interests. For instance, a teacher with tenure in a public school system may be found to have a constitutionally-protected property interest in continued employment.

1. Real and personal property:  In this book, we are concerned almost exclusively with rights in tangible property, i.e., all real property and tangible personal property. “Real” property includes land and any structures built upon it. “Personal” property includes all other kinds of property; while our discussion of personal property concentrates on tangible property (e.g., an automobile), a few types of intangible property (e.g., bank accounts) are considered. The bulk of the treatment of personal property is in the following chapter, so that the remainder of the book concentrates heavily on real property.

B. Possession vs. title:  Perhaps the most important distinction which will appear throughout the course of this outline is the distinction between possession and title.

1. Possession:  There is no precise definition of the term “possession”, and its use varies according to the context. However, a person may generally be said to have possession of land or personal property if he has dominion and control over it.

2. Title:  Title, on the other hand, is roughly synonymous with what the layman thinks of as “ownership.” Thus a tenant in a residential apartment building has possession of the apartment, but the landlord has title to it.

a. Divided title:  A unique feature of Anglo-American property law is that title to a parcel of real estate can be spread among numerous owners and in several different ways. The chapters on future interests, marital estates and concurrent interests are all illustrations of this fact.

C. Law and equity:  Another frequently-drawn distinction is between law and equity. The difference between courts of law and courts of equity is discussed more fully infra, p. 87. The basic idea is that a law court awards money damages, and an equity court awards other sorts of relief, usually injunctions.

D. Bundle of rights:  The non-lawyer thinks of property as a single right: one either “owns” personal or real property, or one does not. But in fact, ownership consists of a number of different rights, often called a “bundle”: the right to possess the object; the right to use it; the right to exclude others from possessing or using it, and the right to transfer it. Even the right of transfer has two distinct aspects, the right to make a gift, and the right to sell. See D&K, p. 86.

INTRODUCTION

Chapter 1

INTRODUCTION


I. MEANING OF “CONTRACT”

A. Definition: A “contract” can be defined for most purposes as an agreement which the law will enforce in some way. See C&P, p. 1.

1. Containing at least one promise: A contract must contain at least one promise, i.e., a commitment to do something in the future. A contract is thus said to be “executory,” rather than “executed.”

Example: Suppose A transfers title to her car to B, and in return simultaneously receives $1,000 from B; this whole transaction is done on the spur of the moment. No contract has been created. Since the transaction contains no promise by either party of a future performance, it is completely executed, rather than executory. If, on the other hand, A had promised that she would transfer title to B, and B had promised to give A $1,000 (or had in fact given A the $1,000 immediately), there would be a contract, since A‘s performance was to occur in the future.

2. Written vs. oral contracts: The term “contract” is often used to refer to a written document which embodies an agreement. But for legal purposes, an agreement may be a binding and enforceable contract in most circumstances even though it is oral. The few kinds of contracts for which a written document is necessary are discussed in the chapter on the Statute of Frauds, infra, p. 267.

3. Contracts vs. quasi-contracts: Contracts must be distinguished from what are sometimes called “quasi-contracts.” A quasi-contract is not a contract at all, but is rather the term used by some courts to denote a recovery imposed by law where justice so requires, even though the parties have not made any agreement. Thus a physician who renders emergency services to an injured pedestrian he finds on the sidewalk might be allowed to recover in quasi-contract even though his services were not requested by the victim (or by anyone else). Quasi-contractual recovery is discussed more fully infra, p. 325.

a. Implied in law: A quasi-contractual recovery is often called “implied in law” recovery. The term “implied in law” should not be confused with a contract that is “implied in fact.” An “implied-in-fact” contract is a real contract, but one in which agreement is reached by the parties’ actions, rather than their words. If a person visits a doctor to discuss an ailment, an agreement to pay a reasonable fee will be “implied in fact” even though neither party mentions payment. Implied-in-fact contracts are treated exactly like “express” contracts (i.e., contracts agreed upon by words) for almost all purposes, but are treated very differently from “implied-in-law” contracts (i.e., quasi-contracts).

TWO TYPES OF NON-REAL PROPERTY: PERSONAL PROPERTY AND INTELLECTUAL PROPERTY

CHAPTER 2

TWO TYPES OF NON-REAL PROPERTY: PERSONAL PROPERTY AND INTELLECTUAL PROPERTY

Introductory note:  This chapter considers two types of non-real property: personal property and intellectual property. With respect to personal property, we consider: (1) the rights of finders of lost chattels; (2) the rights of bona fide purchasers of goods; (3) bailments; and (4) gifts. With respect to intellectual property, we discuss briefly copyrights, trademarks, patents and the right of publicity.

I. RIGHTS OF POSSESSORS

A. Rights from possession generally:  Normally, one obtains title to goods by acquiring them from, and with the consent of, their prior owners (e.g., a purchase or gift transaction). There are a few situations, however, in which one may obtain title, or its rough equivalent, by the mere fact of possessing the article. The best examples of title from possession are: (1) wild animals; (2) the finding of lost articles; and (3) adverse possession.

 B. Wild Animals (ferae naturae):  Wild animals (often referred to in court decisions by their Latin name, ferae naturae) are normally not owned by anyone, of course. Therefore, it is not surprising that the courts have held that once a person has gained possession of such an animal, he has rights in that animal superior to those of the rest of the world.

1. What constitutes “possession”:  However, it is not always easy to tell when a person has obtained “possession” of a wild animal. Obviously, the capture of such an animal is sufficient. But where less than outright capture has occurred, the line between possession and non-possession becomes blurry.

a. Chasing:  The mere fact that one has spotted and chased an animal is not sufficient to constitute possession. Thus in the classic case of Pierson v. Post, 3 Cai. R 175 (Sup. Ct. N.Y. 1805), P found and chased a fox as part of a hunt; D then stepped in, killed the fox, and carried it away. The court held that “mere pursuit” gave P no legal right to the fox, and that D thus had the right to interfere.

b. Trapping or wounding:  One who mortally wounds an animal or fish, so that capture is almost certain, is deemed to have possession. Brown, pp. 15-16. Similarly, the catching of an animal or fish in a trap is sufficient.

c.  Business competition:  The courts are more likely to be sympathetic to the interfering defendant if he acts out of business competition with the plaintiff, rather than out of spite or malice.

Law of Finders and Prior Possessors

CHAPTER 3

Law of Finders and Prior Possessors

As noted in the first two chapters, possession is important in determining persons’ relative rights to things. Although familiar sayings such as “possession is nine-tenths of the law” and “finders keepers, losers weepers” are inaccurate as statements of the law, they do echo the law’s recognition that a person in possession of a thing has greater rights to that thing than do most other persons.

  The study of finders of personal property (property other than real property) serves many purposes. For one, the concept is easy: Someone lost something; someone else found it; now who owns it? More importantly, some rules have evolved when the original or true owner cannot be found, and the finder and the owner of the place of the find (the locus in quo) each claim possession.

  The study of finders law gives you the opportunity to apply the rules and rethink the law. How should a court resolve issues pertaining to finders? Should it try to fit the facts into a box of the existing rules to determine who has the superior right to the thing? Or should the court determine who prevails based on instrumental goals—i.e., considerations other than black-letter rules? Or should the court simply say, “Finders win”?

  The common law holds that a finder of lost property has greater rights to the found property than the entire world except the true owner. The rule is often stated, “The title of the finder is good as against the whole world but the true owner.” See Raymond A. Brown, The Law of Personal Property 25 (3d ed. 1975). If the true owner is located, the true owner can recover the lost property. The goal of the common law here is to facilitate the return of lost property to its true owner. Many times, however, the issue is who gets the property if the true owner never surfaces.

  A finder of lost property is a person who (1) takes control of the lost property and (2) has the intent to maintain possession of the property. To illustrate, three children, Andy, Brad, and Charlie, are playing. Andy finds a bag weighty enough to be tossed. Andy tosses the bag to Brad. As Brad catches the bag, the bag breaks open and money spills on the ground. Charlie snatches up the money. To which child would you give the money, assuming the true owner cannot be located?

  One answer, of course, is to say the boys are acting in unison and thus should split the money equally. Another is to say Andy took control of the bag with the intent to possess it, and thus he should get the money since the money was in the bag. A third option gives the money to Charlie since it was Charlie who took control over the money with the intent to possess it. Brad, it seems, never had the requisite control or intent to possess. The issue may turn on whether you feel Andy ever had actual control or, more likely, any intent to possess the bag or the money. See Keron v. Cashman, 33 A.1055 (N.J. 1896).

INTRODUCTION AND DEFINITIONS

CHAPTER 2

Personal Property and First Possession

    INTRODUCTION AND DEFINITIONS

Property falls into two broad categories: real property and personal property. (Intellectual property has some aspects of both.) Real property, real estate, or realty refers to land and the improvements attached to the land. Buildings, fences, and dams, for example, are included with land as real property. Personal property or personalty is all property other than real property. Automobiles, books, tables, clothes, computers, and corporate stock are examples of personal property.

  A fixture is personal property that has been permanently attached to real property, but that could be removed. A dishwasher installed into a kitchen cabinet is a fixture, for example. Fixtures’ hybrid nature subjects them to rules applicable to personal property and sometimes to rules applicable to real property.

  Property may change character. For example, trees and crops in the field are real property. When cut or harvested, the cut trees become personal property. Cut trees turned into lumber are personal property but once incorporated into a building, become real property.

  Personal property may be tangible personal property or intangible personal property. Tangible personal property includes property of a physical nature. You can see it and touch it. Examples include automobiles, books, clothing, lumber, jewelry, paintings, furniture, and coins. Intangible personal property includes assets that cannot be touched or seen but that have value nonetheless. Examples include stock in corporations, bonds, patents, copyrights, notes or accounts receivable, goodwill, and contract rights. Intangible personal property often is represented by a writing (tangible property) but the asset itself (e.g., a patent, corporate stock, or a note receivable) is an intangible asset. Recently recognized intangible assets are the rights of publicity and privacy that prohibit others from using a person’s name, face, or other attribute of that person for commercial purposes without permission.

    POSSESSION, RELATIVITY OF TITLE, AND FIRST-IN-TIME

As discussed in Chapter 1, the word “property” has multiple connotations. It may be the thing itself; or it may define relationships and priorities, rights, and obligations among persons with respect to a thing. The study of the relationships among persons with respect to personal property is helpful in understanding three basic concepts: possession, relativity of title, and first-in-time.

  Possession is the controlling or holding of personal property, with or without a claim of ownership. It has two elements: (1) an intent to possess on the part of the possessor, and (2) his or her actual controlling or holding the property. As to the second element, control is the key. Both the intent and the control elements must be present to acquire the rights of a possessor. A court will manipulate the two elements of possession according to the needs of the case. Possession need not be actual possession. More on this topic will follow.