Property vs. liability rules- why favor property rules when trans. costs are low and vice versa for liab. rules? Trans. costs to what? (Coasian, litig-avoiding bargains?)
Rights of “outsiders” under common property regime? (None?) See chart under 1st possess.
What is Property? Trespass v. Nuisance
Trespass to land: = strict liability (no need to show injury; harm presumed)
iInvasion of another’s property (by objects large enough to displace space, i.e. trailer)
Jacques- Held usual rule that nominal damages will NOT support an award of punitive damages does NOT apply to TTL.
Individual interest in punishing trespassers:
Landowner’s right to exclude + trespass worthy of protection;
Punitive damages as deterrent, even in absence of harm, reveals ct.’s emphasis on gatekeeping authority of land owners; “harm” here = Jacques’ infringed upon right to exclude
Societal interests “ “ “:
preventing wronged landowner from “taking law into their own hands” since he know legal system will punish trespasser w/ punitives
avoiding incentivizing trespassers – if damages too low, trespassers will do cost/benefit analysis and decide it’s more cost-effective to trespass & pay small damages than not
Nuissance: (tort) anything which annoys or disturbs free use of one’s property, or renders its ordinary/phys. occupation uncomfortable for owner
Public nuisance– affects general public
Private nuisance – D must interfere w/ P’s use/enjoyment of land in way that’s:
( Substantial; AND ? )
Unreasonable, negligent, OR reckless; OR
Unreasonable determined by balancing 2+ landowners’ respective interests
Activity unreasonable when gravity of harm [to P] > social value ofactivity [by D] alleged to cause the harm….
RST gravity of harm factors:
Extent of harm involved;
Character of harm involved;
Social value that law attaches to types of use or enjoyment invaded;
Suitability of partic. use or enjoyment invaded to character of the locality;
Burden on the person harmed of avoiding the harm
RST social value (util.) factors:
Social value that law attaches to the primary purpose of the conduct;
Suitability of the conduct to the character of the locality;
Impracticability of prevention or avoiding invasion
If after balancing test, a tie, then to break tie, ct. can inquire…
Did one party act in bad faith? (ex. did one neighbor act out of spite?)
Is one interference more distasteful than the other? (ex. sewage vs. well)
Which party’s use is more “normal”/trad. use of land?
Which party acted more “neighborly?”
Results in abnormally dangerous conditions or activities in inapprop. places
(unlike pub. Nuisance - injures one/limited # people only)
Trespass & nuisance contrasted
Trespass *Protects interests in possession of land
Applies when D intrudes upon land w/ object large & solid enough to phys. displace P from portion of her land
Nuissance *Protects interest in use and enjoyment of land
D’s Invasion by small objects from neighboring land- ex. pollutant, sound, light waves, sewage particles
In rem vs. in personam rights
In rem: right that puts “the world” on notice (ex. landowner has right to exclude the world from his land)
In personam: rights against specific party (ex. right to enforce K only against other, specific party to the K)
Exclusion vs. Governance approaches to property laws:
Exclusion: Decision about resource use delegated to an owner, who acts as “gatekeeper” of that resource
Useful for resources like land, which have multiple potential uses, when it’s most valuable to give owners discretion to choose which use most valuable.
Law merely backs owner’s decision.
Govt. prescribes partic. rules about permitted & prohibited uses w/o regard to the other attributes of the resource; focuses on partic. uses of resources; govt
Based on policy reasons – weighs reasonable & unreasonable uses of land
Coase Theorem: (think about in context of nuisance law- spillovers from 1 parcel of land that interferes w/ use & enjoyment of another’s land)
Private actors can contract privately to reassign property rights & reach the most efficient/optimal allocation of resources;
Otherwise expensive litigation/govt. interference = waste of resources
Repeated Trespass (Baker)
When P seeks injunction to stop repeated trespass, as this is equitable doctrine, ct. weighs policy, considerations of justice
Here, Howard County Hunt aware of multiple dog intrusions
For equitable relief, P required to have clean hands – “no equity for one who does not act equitably” ‘
Equitable relief may afford P remedy when law does not (i.e. when P can’t get damages) – when is this the case?
Repeated trespasses (Baker)
Trespasses by multiple people
Trespasses that created subjective harms not easily compensable by damages (here, Baker’s loss not just of chickens, but of results to his study)
Building Encroachments ( Pile & Golden Press – contrasting approaches)
Pile- absolutist; if D’s structure encroached on P’s land = TTL, then P gets injunction; D must remove structure, despite high costs & small encroachment
Golden Press –
Exception to gen. strict liab. rule for TTL, in cases where P’s damages very slight
weighs harm to P from encroachment against cost D would incur to remove structure
Takes into account D’s & P’s states of mind – D acted in good faith, made honest mistake, then tried to negotiate w/ P pre-litig.- offered to chip away wall; P acted in bad faith (implicit) by refusing to negotiate
Concl: P not granted injunction forcing D to remove wall
Property Rules & Liability Rules – (2 models of property protections & entitlements distrib. – opp. points on spectrum)
Based on premise that cts. should consider distributional & justice concerns, Calabresi & Melamed disting. between cts.’ assignments of entitlements & assignment of modes of entitlement protections.
Property Rule protection: mandatory relief (injunction or no liability)
entitlement-holder must consent before another wishing to remove entitlement from its holder can take it away
Person wishing to remove it must buy it in voluntary, negotiated transaction; seller must agree to value of entitlement
Liab. Rule protection:
payment to owner (in ct.-determined amt.) in exchange for entitlement;(essentially forced sale by owner of entitlement in exchange for other party’s damages )
entitlement can be taken away w/o entitlement-holder’s consent, but only upon other party’s payment of ct.-determined compensation.
Ct. protects entitlement & their transfer or destruction based on value ct. determines
When to use which rule? Policy considerations - distributive justice vs. efficiency
Prop. Rule Leastamt. state intervention
Cts. should use when trans. costs are low. (Rules 1 & 3)
Ex. when there’s small # parties on both sides
Means consensual exchange of entitlements is realistic, efficient possibility
Liab. Rule Most amt. state intervention.
Cts. should use when trans. costs are high- (Rules 2 & 4)
When there are large #s of parties on one side in dispute, liab. rules incentivize bargaining between parties to dispute to avoid expensive litig.
Less likely to have free-rider, negotiation problems b/c both sides know that failure to negotiate successfully could yield expensive litig. & poss. ct.-mandated relinquishing of entitlement
Consensual exchange of entitlements under prop. Rules unrealistic, ineffic. b/c free riders on side w/ large #s will drag their feet, forcing whole group to not negotiate, consent to entitlements exchange
Types of Holdings: Rules 1-4
Ct.’s mode of entitlement protection Ct. Assigns entitlement to:
R 1 -
-P gets entitlement
-Ct. P protects it w/ prop. rule
Ex. Pile – P has entitlement AND injunction- can force D to tear encroaching structure down
R 2 –
- P gets entitlement
- Ct. protects it w/ liab. rule
-Ex. Golden Press – P gets entitlement to land, but D can take P’s entitlement (keep encroaching wall in place) w/o P’s consent upon payment of ct.-determined damages
–D gets entitlement
-Ct. protects it by property rule
Ex. Hinman – Ct. gives D, airline, entitlement to airspace high above P’s land; trespasses (flights) can cont., and P can stop them only by D’s consent
-D gets entitlement
-Ct. protects it by liab.. rule
Ex. pollution – D pollutes; P can force D to transfer entitlement (right to pollute) to P in return for P compensating D-polluter
Ex Ante/Ex Post Problem: Another factor for deciding between prop. rules & liab. rules
Ex ante analysis:
analysis of situation pre-critical event, i.e. accident, K, commitment to partic. use of resources
Ex. encroachments- consider circumsts. of 2 adjacent landowners pre-construction, when 1 owner thinking about placing building near boundary line
Focuses on incentives for future conduct
Property rules more efficient in long-run from this POV, by incentivizing future, efficient behavior – easier, more efficient for parties to bargain before dispute-causing event
“ “ “ post-critical event
Ex. encroachments- consider circumsts. of 2 adjacent landowners post-construction
Focuses on fairness, distrubutional concerns
Property rules inefficient from this POV b/c it’s harder for parties to bargain, reach optimal, mutually agreeable use of resources after dispute-causing event
Restitution Equitable remedy – clean hands requirement, so ct. considers intentions of party seeking rest.
Mistaken Improver (Producers ) – different jds.’ models:
Apply law of trespass
True owner has choice between:
Injunction ordering encroacher to tear improvement down; OR
Declaration that building belongs to true owner as fixture on his land; essentially owner gets free improvement; this choice better from societal POV b/c it preserves value of building for society
Golden Press-restitution approach: Ct. balances the equities
If encroacher acted good faith at time of construction, ct. has 3 options:
Restitution award: Let true owner keep house and pay encroacher its value
Damages award motivated by rest.: Owner transfers lot to encroacher in exchange for encroacher’s payment of its fair market value
Partition (restitution) award : Property sold to 3d. party; proceeds divided between true owner and encroacher
Orig. Acquisition First Possession – scheme for regulating competitive process of establishing ownership of un-owned resources
Elements- 1st person who fulfills both becomes 1st possessor:
Intent to assert control over object; AND
Significant degree of power (possession) over object
Wild animals – Pierson Issue: What level of closeness to capturing fox establishes possession?
1st possession spectrum: -sight of fox--pursuit ---close pursuit(dis.) --wound ( maj)---kill
Sight clearly not enough
Killing clearly is enough
Holding: mortal wounding + contd. pursuit= enough; holds for party who killed fox but didn’t do work of pursuit;
Policy: favors bright-line rule as opp. to dissent’s – very clear who owns it (you shoot it, its yours)
(Implicit: this rule discourages inefficient, wasteful mob/racing behavior)
Concl: Must be reasonable prospect of capture – i.e. close pursuit; holds for initial hunter who did all the work of pursuit
Custom - Stresses its imp. in shaping rule.
Wants to incentivize expensive, socially beneficial sport of fox-hunting by making sure party who puts labor into hunt gets reward of animal ownership (Lockean labor/dessert theory)
Notice: If initial hunter actively pursuing fox, he’s asserting intent to control to world; this discourages others from competing over fox/wasting their time & resources fighting over who owns fox (which would be the prob. if spotting fox alone constituted ownership, which provides little notice to others )
Should custom determine ownership thru 1st possess? (Ghen)
Limitations: Custom must be
Universally followed by all members of relevant trade/activity;
Must have been followed for long time;
Must not be contrary to gen. relevant law (whales – maritime law);
Must be ltd. and affect only a few persons;
Governs only until actual appropriation (1 person’s claiming of resource as his own) is established, then ordinary rules of property take over;
Purpose of limitations:
Assures notice (within relevant comm.)
Assures that custom is efficient
Assures that custom won’t interfere w/ persons engaged in wider trade / in other markets
Pros- Good to incentivize customary activity/trade if :
It’s a socially, econ. beneficial activity, but it’s expensive & difficult to practice
Customary rule works well in practice, as shown by the extent of the industry which has boomed under it
It’s widely embraced by whole relevant comm. already
neg. externality of depletion on society at large – “tragedy of commons”…even if custom may efficiently allocate nat. resources within relevant group of participants
While people within relevant community/trade may have notice of custom, outsiders won’t; would require a lot of outsiders for law to require them to be aware of custom
Other relevant factors in est. 1st possession – fair competition (Keeble) & mob behavior (Popov/baseball)
Right to fair competition in pursuing one’s livelihood, socially beneficial econ. activity in the process of trying to est. 1st possess. (Keeble) D’s gunshots reduced # ducks available for P to skill, and thus, # ducks available for sale & consumption in the market
Those hunting for livelihood can expect more protection against someone trying to disrupt these activities
Mental state of parties- (Keeble)
Is competitor trying to deprive the other of 1st possess, not to obtain benefit himself of the resource, but out of spite?
If so, law more likely to intervene in favor of hunter w/o malicious state of mind
Relevant if 1 party was part of racing mob (= social harm) or not (Popov) - ct. may lean towards giving party who wasn’t part of mob at least ½ of the 1st possession interest
1st possession Policy Debate – good or bad rule of property law?
Results in private property- w/ benefits of security of expectation, investment, planning
Simplicity/conserves public resources –
decentralizes process to appropriators who decide whether to pursue the un-owned resource
Ltd. govt. intervention, except when litig. occasionally arises
Avoids waste of nat. resources if scheme creates clear winner early in process of appropriation (ex. Popov rule- 1st to grasp & then hold ball in trumph” est. 1st possession b/c it discourages mob /racing behavior, a social harm)
If among competitors pursuing animal or open land, everyone can tell earlier which appropriator is likely to “win” possession, so others will give up, ending wasteful race
*Debatable* which Pierson approach to 1st possess. is most efficient in avoiding such wasteful racing behavior
Fair- Equal opportunity- everyone can enter race for the resource, & 1st gets the prize
Demand side: Can create wasteful, mob/ cracing behavior in certain schemes when people do get resource, overconsumption, tragedy of the commons (“TOC”) resource depletion
Supply side: : Discourages investment in natural resource if suppliers know it will just be depleted by others/they won’t get to reap fruit of efforts
Open access regime (“ToC”)
Common property regime*
-Insiders get certain customary privileges / subject to certain customary penalties
-Outsiders – no rights?
All but owner owns
Norms & regulations
Owner despotism OR
Coasian bargain/ K between owners
* Common property regimes in societies w/o written law, but w/ custom for regulating open access regimes; between ToC & private property
Commons vs. Anticommons vs. Semicommons
Paradigm: Hardin’s “tragedy of the commons”
Ex. fishers in open-access fishery obtain full benefit of taking fish from sea, instead of leaving fish for another day to reproduce to benefit fishing community as a whole; fishermen each incentvized to overfish deplete resource
Intermed. State of affairs between pure open-access and private property
Ex. medieval farmland
½ yr- land subdivided for farming (private)s
½ yr- land tract as a whole open to community for grazing
Resource from which everyone has right to excl.
Ownership of resource has become excessively fragmented, to point where society obtains less than optimal use of it.
Disincentivizes private development
Ex. Soviet kiosks – no one used storefronts for businesses b/c too much red tape, so set up kiosks in front blocking storefronts
Discovery Johnson v. McIntosh Background: early American disputes over claims to title between Euro. descendants and Native Americans
Issue: Who has stronger claim to title to the land? (How to determine?)
Natives’ treaty w/ U.S. extinguished Natives’ land title rights
Once Europeans discovered N. America, his rights trumped natives’; therefore the natives had nothing legitimate to transfer
Right to dominion/sovereign right to property (European conquerors had) > right to occupancy (Natives had)
If original grantor not entitled to convey land in the 1st place (here, Natives, who only had right to occupy land but no right to transfer ownership), everyone following him in chain of title’s claim to land also invalidated
Must trace chain of title
Concl: Party who could trace his chain of title to Euro. conquest had stronger claim to land than one who traced chain of title to transfer by Natives.
Analysis based on paternalistic views of Native Americans as incapable of managing / owning private property, assimilating to Western property norms
DOES NOT address :
What is land being used for by whom? (Does one of parties have stronger claim on basis of public policy, using land for greater social good than the other?)
Which party has stronger roots to the land?
Don’t address Native American custom, which did incl. some form of privfate ownership; nor raise issue of NA decimation
Western land settlement as hist. validation of discovery scheme
Legislation vacillated from opposing and validating squatters’ rights – people claimed land 1st then took title/paid U.S. later
Homestead Act- incentivized settlement of W. territories & Midwest; Settlers could develop land & get it for free
Mining camps-- Informal associations governing land allocation
In both homestead & mining scenario - State & nat’l law eventually codified association customs by statute
What maintained political legitimacy of this system? Why were homestead & miner assoc. systems ultimately successful? - Perception of equality of opportunity to access the land to anyone willing to put in the work to stake claim in the land (Lockean)
Trenton Industries – Discovery in Patent Law Facts:
P = high chair innovator who claimed his collapsible high chair design new inventions
“flash of creative genius” - Something you wouldn’t think of in course of ordinary, mechanical, work as ordinary artisan
*Ps can only recover on infringements since patent date of issue
Balance between rewarding creativity of truly innovative inventors & restricting future, potential inventors
Concl: mere improvement on high chair does not “rise to the dignity of an invention” so doesn’t deserve exclusion rights of patent (at expense of curbing future innovation, creativity of other inventors)
Creation International News Service vs. Associated Press
AP’s allegations against INS:
1. Bribing A.P. employees for stories
2. Persuading member papers to breach agreement of exclusivity w/ AP
Copying A.P. news from bulletin boards and from early editions of AP’s papers & then selling them to INS customers
Principle: A.P. claiming: we’re doing all the work to gather & distrib. news from far ends of the earth, and INS (lower-end tabloid) reaping the benefits by publishing A.P. stories earlier than AP publishing them
Weighing social good for consumers to have choice in news (INS arg) vs. AP’s financial interest in making sure its journalism comes out 1st (AP arg.)
Majority stresses the latter factor
INS shouldn’t get fruit of AP’s work
INS not entitled to “reap where it had not sown” – unjustly enriching itself based on AP labor (Lockean)
Midler – Publicity Doctrine
Ford ran ad. Campaign; tried to get Midler, but her agent said she didn’t do ads,
Instead, Ford’s ad. Co. got one of Midler’s former back-up singers to, imitating Midler, sing Midler’s famous song in the ad
Ford got permission from song’s copyright holder to use song in ad.
Many ad viewers thought they recognized the imitation voice as “just like Midler’s”
Ad doesn’t use Midler name or image - just back-up singer’s voice imiatating Midler’s
Issue – Is use of Midler’s voice, even if it’s an imitation, protected under Midler’s property rights?
Rule – this jd. (CA) recognizes injury from “appropriation of the attributes of one’s identity” (150) - (depends on user’s purpose in using person’s ID.)
IF purpose of media use of person’s ID is informative or cultural- user is immune under 1st amd.
If purpose is merely to “exploit the individual portrayed,” no immunity for image-user
Midler’s arg.: (Lockean/labor): I put work/effort into developing my brand/celeb. Image, based on distinctiveness of my voice; thus I’m entitled to exclusive property rights to my voice. [refine]
Sinatra – [refine holding / distinction](149)
Adell Chem. Co. – Unfairr competition claim succeeded when ad co. exploited celeb’s voice, but there, unlike here, celeb. did ads. For a living
Analogy: Motschenbacher (250 )[refine]
Concl. – voice is more distinctive than auto. (see analogized case Motschenbacher); Thus, song of renowned singer protected (150)
Qualification – Imitation of notable, celeb. ID only actionable in narrow situation…Allegedly infringed-upon celebrity feature must be:
A. commercially distinctive (ex. in Midler - voice of prof. singer widely known, profitable as part of Midler’s “brand”/image)
B.exploited- Deliberately imitated to sell product (not just for informative/cultural purposes- protected under 1st Amd), and
C. Sellers have appropriated what is not theirs
Lockean labor/desert theory elements [in I.P. context]
1. Combining labor with thing
2. Will giving property rights to person who combined labor w/ thing come at expense of stifling innovative from future inventors? (151)
3. Will giving property rights to person who combined labor w/ thing discourage waste of resources?
Ex. Midler – She voluntarily turned down commercial; she should have bargained w/ ad co. for desired compensation for her to sing ad song; even if she ended up not singing song, this would have set fair market price to her voice; by not setting price / turning down commerc. entirely this not only precludes ad co’s ability to use her to sing song, but also co’s ability to get someone else to sing
family of doctrines that stress awarding things that are unowned OR whose ownership is contested ….to owner of most prominent thing to which ownership has already been est.’ed.
Operates under liability rules-damaages (as opp. to property rules- injunctions/spec. perf)
Accession & Good-Faith Improvers - Wetherbee
Issue: Does g.f. improver get to keep finished product he made, or must he pay damages to owner of orig. (raw) material?
D, in good faith, chops down tree owned by P
D converted timber from P’s tree, “by the expenditure of his labor and money,” to hoops [finished product- material for barrel-making]
Hoops D made significantly more valuable than standing trees P owned before they were cut
(Utilitarian) Factors- When does improver’s mixing his labor with thing he doesn’t own give him claim to keep the improved thing?
1. What is mental state of improver ? (good /bad faith)? “clean hands” equity requirement
Here, improver made hoops in good faith.
2. Degree of object transformation – how recognizable is raw material in finished product? (Lockean)
The harder it is to Id the orig. object in the final product, the more likely ct. will award final product to the improver.
Here, hoops very different from standing trees.
3. Relative values of raw thing and improved thing?
Here, hoops 28x more valuable of standing trees when they were cut
Concl: Improver here entitled to keep the hoops.
Accession Remedies :
1. If improver wins, improver must compensate owner of the orig. object in the amt. of the value of the unimproved thing OR furnish the equivalent in kind;
2. If orig. owner wins, laborer could make (difficult) claim for restitution for the value of his labor to improve the thing
Ad Coelum Doctrine – Edwards v. Sims
P/Edwards discovered cave entrance on his property – he worked to develop it into successful tourist attraction
D, Edwards’ neighbor, discovered that depths of cave were actually under his land – claimed rights to cave ownership
Majority Analysis – title theory
Analogy to mine cases -Courts of equity have power to compel mine owners to permit inspection of his mine upon suit of party who can show reasonable ground for suspicion that his lands are being trespassed…..
App.: Since D/Edwards’ neighbor has reasonable ground for suspicion that his lands are being trespassed (by tourists)
Concl- land survey should be made to see if neighbor has claim to ownership of cave
Dissent- Possession Analysis
Ad coelum rule:
Ownership of the surface implies ownership of the air space and subsurface in a column (or “carrot”) of space running upward/downward from surface boundaries
Qualification: only applies to the extent that owner uses and enjoys (possesses) area above and below property
[Policy: bright-line rule reduce transaction costs of coordinating collective agreements among many land owners – ex. airplane case]
Neighbor had had no interest in cave prior to this point
Entrance to cave on Edwards’ land; so he’s entitled to cave property rights
Lockean labor/desert theory – neighbor put no work into developing cave into its valuable improved state as tourist site
Concl: Thus ad coelum does not protect neighbor’s property interest in cave .
Fixtures – Strain v. Green
Strain = buyer, Green = seller
Upon moving from their home, sellers took with them (1) Chandelier, (2) Mirrors, (3) Water heater
Rule – Fixture: thing that, although orig. a moveable chattel, is by reason of its annex. To OR assoc. to use of land, regarded as part of the land
Factors for determining “fixture” status-
A..Nature of article affixed
Was it custom-built-into the premises? Then likely fixture
If owner, who has clear incentive in making permanent improvements in the freehold, given their long-term stake in it as an investment, then prob. a fixture
If tenant, who’s more transient, thus has less incentive to make permanent improvements, prob. not a fixture
C.Manner of annexation
is thing physically attached to the property? (bolted?) Then likely fixture
Would removal of thing damage premises? (ex. removing bolted mirror from the wall damage to wall Then likely fixture)
D. Purpose for which annexation made
Objective intent test – intention to treat something as fixture based on circumsts. is relevant; what was said and done at the time of transaction that would indicate reasonable intention to treat something as fixture?
Public policy – Subj. test based on seller’s private intentions would incentivize dishonest parties to claim that they own fixture, are entitled to take it post-move,
proof issues – how to prove subj. intent to make something a non-fixture?
E.hist. context, custom- what is a “fixture” may change w/ changing standards of living, expectations of homebuyers, over time
Ct. rejects seller’s defense that when they 1st moved to this property, they had installed these things themselves, & intended to keep them, even after they moved to another home
Applying OBJECTIVE test, seller’s secret intentions to NOT classify these things as fixtures irrelevant
Adverse Possession [ applies to both real & personal property]
A.P. Principle: When adverse possessor takes possession, A.P. has rights good against everyone but the true owner, b/c possession is a close proxy for ownership (but not identical)
1. ELEMENTS OF A.P.- Occupant must act as ordinary would; occupancy must be:
1. Exclusive; and
(Restricting others’ access/ giving them permission)
2. Open and notorious; and
3. Actual; and
4. Continuous; and
5. Adverse under claim of right
Without permission of true owner
[ Cts. frown upon bad faith A.P.s – squatters and thieves]
Justifications for A.P.:
1. Lockean - True owner sitting on his rights; slothful, absent, while adverse possessor is investing his work/labor into the property; thus owner is less worthy gatekeeper than the alleged A.P. Losing the property will hurt the owner less, as indicated by owner’s failure to sue within SoL
2. Hegelian personhood view - Diligent possessor, who’s built up connection to the property that would be painful to break, should be rewarded
3. Utilitarian/judicial systemic view - Land records/title issues simpler when old history of title becomes less relevant; difficult to prove and defend against “stale claims” –burdensome for cts. (similar as rationales for SoL)
4. Efficiency/ Reducing transaction costs view
A.P. reduces trans. costs of determining title to assets that last for a long time (like land)
Since AP systematically eliminates old claims (“like broom sweeping away old cobwebs), which reduce costs of engaging in sale of goods/real estate transactions, it enhances efficiency of property markets
3. Ex. 1 of AP- Lessee of Ewing
Symmes- orig. owner – sold property twice, 1st to Ewing, then to Burnet, who is:
Using land as sandlot – valuable for building materials
Actively excluding others from the lot – granting permission for lot access
Sued people for trespass
Pays taxes on lot – signaling to govt. – “this is my land”
Burnets’ actions = notice to public he’s acting under color of title, as if he’s the true owner – “gatekeeper behavior”
Ewing & his successor knew about Burnet sale – They had notice of Burnet’s assertion of title, yet they still did not assert their claim to the lot until 20 yrs. later.
Issue-Who has best claim to title among TO, F1, and C1?
P = Armory, chimney sweep boy who finds valuable ring = (F1)
D = Delamireie, goldsmith who stole ring from Armory (C1)
Rule: Order of best claim to disputed title:
 TO’s claim > F1’s > C1’s
In dispute between F vs. C F always going to win
Party in possession (finder) wins against other parties not in possession (“the world)….EXCEPT against TO.
As time passes, odds of T.O. showing up declines;
Even if T.O. does show up, chances of T.O. winning AP claim declines
1. Good faith - F1 acquires property in good faith whereas C1, who intentionally deprives the other of property, acts in bad faith
2. Black-letter rule - Ct. doesn’t want to incentivize retribution, self-help – don’t want Ps like Armory to take law into their own hands
3. Deters stealing
4. Social utility- Ct. wants finder to make socially good use of the found property – i.e. by selling it in the market, investing in it
5. Ct. wants to encourage “Coasian deals”
6. Increasing chances TO will get his chattle back – T.O. will prob. look for lost property by looking at firms that sell such items, assuming F1 sold it
7. Lockean desert- if in the course of one’s work he becomes a “F”- since he put labor into finding it, he’s entitled
2. Clark v. Maloney-
Issue: Who has best claim to logs – TO, F1, or F2?
Holding: Since F1 found logs first, he has best claim to ownership of logs “against all the world but the rightful owner”
TO > F1 > F2in order of who has best claim to title
F1 can do virtually all the things TO can do to property
Use it; or
bright-line rule = efficiency
- society wants F1 to treat property as if it’s his to encourage property system to be more efficient, self-operating, w/o need for ct. intervention.
Issue: Who has best claim to title – C1 or C2?
Facts: Both P and D converted lumber
Concl:C1 > C2 in order of best claim to title.
bright-line rule = efficiency
giving C1 better claim to title than C2 is better than encouraging more wide spread, systemic stealing
very pragmatic, utilitarian- while ct. doesn’t condemn C1 and C2 for stealing, at least this bright-line test avoids chaos of “endless series of unlawful seizures & reprisals in every case where property [passes] out of the possession of the rightful owner”
4. Fisher v. Steward – locus owners vs. finders (bee case)
Issue: Who has best claim to beehive on private land – F or TO?
Fisher (F) found swarm of bees on Steward’s land (TO); told Steward
Fisher sued Steward & argued he was entitled to bees b/c he discovered them
At C.L., animals [on the land] go with the land [ratione soli]
(Since this case, U.S. has abrogated rule w/ laws favoring hunters- hard for landowners to make trespass claims against them)
HoldingOwner of land where hive is has better claim to the bee hive than finder of the hive.
Principles: locus owners almost always win over finders
(Implicit: Social utilian/Lockean rationale- Ct. wants to encourage socially productive work on private land; holding for Finder in this situation would disincentivize TOs like Fisher from maintaining hives for socially productive/econ.-stimulating purposes, if they knew finders could just take hives away)
Sometimes who has best claim to property in this situation governed by custom
5. Goddard – Accretion (meteorite case)
Gooddard = landowner
Elickson = lessee of land – gives Hoagland permission to come on land, where Hoagland finds & digs up meteorite on Gooddard’s land
Hoagland sold meteorite to scientist Winchhell
Doctrine of Accretion
Sub-rule of accession – smaller piece (whose title is disputed) legally “becomes” part of bigger piece that belongs to owner
Ct. stresses that meteorite fell on owner’s land, created hole, and became embedded in hole- thus, it became “part of” landowner’s property by accretion.
(Also applicable but not mentioned)
Ad coelum doctrine
Rights of finders vs. true owners-
First possession/ rule of capture
Concl: Landowner has better claim to meteorite than finder, who dug it up on his land (despite finder’s implicit Lockean/labor arguments)
Values Subject to Ownership
Artists’ moral and cultural patrimony
1. Moakley – Artists’ Moral (“personhood”) rights
Do artists retain some control over future owners’ use of the things they’ve created (even beyond 1st buyer)?
What constitutes “art” worthy of such protection?
P = mural artist; made 60s/ controversial mural on church wall – sex drugs r&r
D = conservative Church 2 that acquired the church building from the 1st Church A that commissioned P’s mure
Rule- Artists’ rights are inalienable, but waivable .[under SOME STATE STATUTES]
A. Artist has inalienable right over the art;
B. Artist can waive this right;
C. LIMITATION-…but artist cannotlegally sell entitlement to change/destroy the art to the property owner.
(loophole: artist could require property owner to pay to her charity, not her directly, for her to waive this right.)
A.avoiding destruction of art during artist’s lifetime (“right of integrity”)
B. Protecting professional reputation of artists (econ. rationale)
C. Protecting artist’s claim to authorship of his work (“right of paternity”)
Critics of this rule/policy:
A. Law & econ.- Rule restricts artmarket by discouraging people from buying art b/c this complicates those transactions –restricts rights & responsibilities of art owners (will also make it harder for art buyers to resell it, vicious cycle etc.)
Interferes w/ trad. rights of owners to exercise dominion over property, incl. destruction (See beautiful mansion/destruction/will case)
B. Incentivizes property owners to make illicit coasian bargains w/ artist to buy artists’ waiver of protection
Corrow –Statutory Protection of “Cultural Patrimony”
Issue - What constitutes cultural patrimony (protected as inalienable by fed. statute)? (Did C violate statute?)
Concl – C violated trafficking of cultural patrimony object statute.
B. Corrects socially destructive racing behavior of open-access system, which depletes common resource (here, beavers) negative externality*
C. Lowers transaction costs for Coasian bargains – b/c you know exactly who you’re dealing w/ (who owns what bever pelts) in trying to contract to buy a beaver
D. Europeans made economically more stimulating use of the beavers – value of pelt > value to natives of beaver as food
Demsetz Concl –
*Private property rights develop to internalize externaltiies when the gains of internalization become greater than cost of internalization
As resource value rises (ex. w/ commercialization, here, of beaver pelts), that society will have more developed property rights.
Demsetz critics: simplistically , falsely assumes Native Americans were primitive, had no form of parcelization/private property system of their own on small scale
2. Posner- Law & Econ (contrast w/ Radin). – pro-commodification of personhood things re: prostitution
Items associated w/ personhood (re: sex) should be allowed to be sold b/c it’s paternalistic for society to legally prohibit sale of such personhood commodities – sex, babies, etc.
Women capable of doing their own voluntary cost-benefit analysis of such sales, weighing value of chance to improve their own econ. situation
3. Radin- ANTI- COMMODIFICATION
Radin’s Thesis - *
The closer property is to personhood end of spectrum, the stronger the party’s claim to the entitlement should be.
Anti-commodification of goods tied up in personhood. Once “personhood” goods & services (like blood, sex, sperm, body parts) commodified, people less likely to behave in accordance w/ social mores.
Ex. Prostitution -
Should be presumed involuntary, b/c it commodifies sex. Socially detrimental, given the disadvantaged, vulnerable, desperate circumsts of women selling sex; therefore it should per se not be sellable.
(Implicit critique of Posner: women in socioecon. vulnerable position effectively do NOT have free choice as market actors.)
-Radin’s Personal- Fungible Property SPECTRUM
Assoc. w/ person is interwoven w/ property’s value
Ex. Wedding ring in hands of wife – sentimentally priceless, part of owner’s personhood, irreplaceable
Ex. Wedding ring in hands of jewelry store
Pros & cons of acknowledging “personhood” property
Pro: acknowledges reality that people are bound up with certain objects
Skepticism of “object-fetishism” – personhood to the extreme
Claim that you have personal attachment to object diminishes w/ # of those objects you have
When object associated w/ personhood induced by cash, becomes commodified,
Ex. People who gave blood for free gave higher quality blood
People who gave blood or $ gave lower quality blood
4 Domino Theory – of goods tied up w/ “personhood- Anti-commodification (context: prostitution). Once you commodify something associated w/ personhood (i.e. sex), it reduces the value of that thing not just for the people involved in the trans, but also the way it’s perceived in society at large
Public Trust Doctrine
1. Illinois Central RR Co. (1892)
Issue: Was grant by IL. Leg. to private r.r. co. of land near harbor valid in the 1st place?
IL legislature owned harbor land area around Lake Michigan
IL leg. granted land near harbor to private corp., Illinois RR., to develop land
R.R. had oblig. to pay tax to Ill. govt. (but it has not been paying)
Leg. then took away the grant from r.r. co.
(Hist. context: corrupt IL politics)
Rule - public trust doctrine: (usually state law)
Harbor = public domain
Harbor & similar property held by the state, by virtue of its sovereignty, in trust for the public
“Control of the state for purposes of the trusted can never be lost….
as to such parcels as are used in promoting the interests of the public ….OR
can be disposed of w/o any substantial impairment of the public interest….”
State of IL had no right to alienate the land by the harbor over to a private corp, “when the whole people were vested in that land”