Class Chapter 7- Acquisition of Ownership PDF

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ACQUISITION OF OWNERSHIPPrescribed Cases and LegislationAcquisition of ownership - Acquisition of ownership can take two broad forms: - Derivative acquisition of ownership is by far the more common form of acquisition of ownership - Different rules pertain to movables and immovables - Ownership of m...

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ACQUISITION OF OWNERSHIP Prescribed Cases and Legislation

Acquisition of ownership •

Acquisition of ownership can take two broad forms:

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Derivative acquisition of ownership is by far the more common form of acquisition of ownership

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Different rules pertain to movables and immovables

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Ownership of movables is obtained by delivery, whereas ownership of immovables is obtained through registration

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Both are forms of transfer of ownership

Original acquisition •

The acquirer obtains ownership through operation of law. At the same time, any previously existing ownership rights are terminated -

Operation of law= ex legae

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The factual situation is assessed objectively, taking into account such factors as physical control (corpus) and the appropriate mental attitude (animus)

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The will or intention of the previous owner is not relevant to the enquiry as to whether property rights have been reallocated.

Forms of original acquisition of property •

The most important modes of original acquisition of ownership are: •

Appropriation (occupatio)

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Accession (accessio)

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Manufacture (specificatio)

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Mingling / mixing (confusio / commixio)

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Acquisitive prescription (long possession).

Appropriation (occupatio) •

Appropriator can acquire ownership if the following requirements are met:

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Currently unowned corporeal thing (not lost) -

Is it not owned (not lost) If the true owner of the property sees it, they are within their rights to get it back bc they still have rights over that property

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Thing must be capable of private ownership (res nullius and res derelictae)

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Unilateral taking of possession by appropriator (corpus requirement)

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Control must be sufficient and effective (acquirer must reasonably be inferred to be the owner at a particular point in time)

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Intention to become owner (animus requirement)

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Applicable legislation, if any, must be considered (e.g. Game Theft Act 105 of 1991).

Accession (accessio) •

Accession occurs when two or more separate entities (things) are joined by natural or artificial means, and form another composite thing or entity

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The owner of the principal component of the composite entity automatically becomes owner of the accessory (joined thing) by operation of law

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The accessory loses its legal identity upon accession, implying that ownership of the thing as a separate entity is terminated

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The previous owner of the accessory loses ownership, but may claim compensation

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The joined thing retains its factual identity

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Accession is determined objectively (a subjective agreement cannot override the objective facts).

General Requirements •

There are three general principles which need to be applied in every case: 1. We need to determine whether the joined things are movable, immovable, or a combination of the two, as the difference triggers the use of the crystallised rules 2. We need to determine whether there has been an increase in, an addition to or a join between two or more things to form a composite thing. The join may be natural or artificial, but must be permanent and by sufficient means 3. It must be possible to identify a principal and an accessory thing. Where accession involves immovable property, land is always the principal thing.

Accession of movable property to other movable property •

This kind of accession always involves industrial or human intervention to bring about the join

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It is sometimes difficult to determine which of the items of movable property is the principal and which is the accessory

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It is very important to determine which item is the principal thing, as the owner of the principal thing automatically becomes the owner of the accessory through accession

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The courts apply special tests to determine which of the movables is the principal thing

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However, special pragmatic rules apply in respect of writing on paper, painting on canvas and the welding together of previously separate items.

Accession of movables •

The join must not give rise to manufacture, or we might be dealing with an instance of mingling or mixing

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The join must be permanent. The central issue is whether the join leads to the termination of legal identity of one of the joined components and hence a reallocation of ownership rights

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There is no single judicially approved test to determine which item is the principal thing and which is the accessory. Different approaches will result in different conclusions

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Sometimes the court will regard the more valuable item as the principal

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Sometimes the court will adopt the view that the thing which gives the composite thing its identity is the principal thing

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The size or bulk of a thing can give rise to the court inferring that that thing is the principal

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If a thing is added to another thing merely as adornment, the former will usually be regarded as an accessory

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Sometimes the court will take the view that no accession has occurred, but that the join has in fact created an entirely new thing (specificatio)

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In Khan v Minister of Law and Order 1991 (3) SA 439 (T), the court held that the item which gives the composite thing its character, form and function should be regarded as the principal thing  However, the court did not expressly exclude any of the other tests.

Accession of movables to immovable property •

What is attached to land becomes part of the soil as an accessory

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Human effort is nearly always involved in joining movable things to immovable property

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Accession of movables to land takes the following two forms:  Planting and sowing  Building.

Planting and Sowing •

Planting and sowing is governed by the maxim omne quod implantatur solo cedit, which means that all which is planted in the soil accedes to the soil

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Thus, the owner of the soil owns the plants growing out of the soil

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The point in time which accession occurs is when the seeds or plants have taken root and draw nourishment from the soil.

Building (inaedificatio) •

The general rule is that everything built on or attached to the land (the principal thing) forms part of the land as accessory

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The owner of the land therefore also owns that which is attached to the land, or to a building on the land

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Whether building has led to accession is matter of fact

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The underlying principles are publicity and protection of ownership.

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The attachment must indicate permanency  The court will take into account the nature and purpose of the movable, the manner and degree of the attachment, and the intention at the time of the attachment

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The intention with which the attachment is made should be inferred from the previous two factors (the nature and purpose of the attachment and the manner and degree of attachment)

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The courts have applied a “traditional” approach (Macdonald Ltd v Radin NO and the Potchefstroom Dairies and Industries Co Ltd 1915 AD 454) and a “new” approach (Theatre Investments (Pty) Ltd v Butcher Brothers Ltd 1978 (3) SA 682 (A)) to inaedificatio.

How to approach inaedificatio? •

The correct approach is to consider the interplay of all three factors

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Thus, if, from an objective standpoint, the movable has been attached firmly and is meant for permanent use, introducing subjective considerations is not acceptable  In such cases, accession should be confirmed

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If the attachment is ambiguous, the court has a choice whether to confirm or deny accession  It should decide this question on the basis of policy.

How to approach inaedificatio… 

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In confirming accession, the court would be preserving the new composite whole, which would serve the publicity principle  In denying accession, the court would be protecting ownership of the movable Arguably, if it is not clear that the join is for permanent use, and therefore that the intention at the time of attachment was for the joined thing to serve the principal indefinitely, then the court should choose to invoke the policy to protect ownership of the movable  This choice would be consistent with the constitutional provisions prohibiting the arbitrary deprivation of property  In such cases, it will not be necessary to consider subjective factors Only in special circumstances, clearly justified, should the policy to preserve the whole be invoked when attachment is ambiguous.

Accession of immovable property to immovable property

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This form of accession occurs naturally, without human or industrial intervention

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It involves either a sudden or imperceptible increase in the size or volume of land caused by the action of water

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Few examples of this form of accession occur and its practical application is therefore limited.

Acquisition of Fruits •

Fruits (natural and civil) can be produced by the principal thing

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When the fruits separate from the principal, they gain separate legal identity

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The owner of the principal automatically becomes the owner of its fruits when they attain a separate legal identity.

Manufacture (specificatio) •

Manufacture occurs when one person makes a new product from materials that wholly or in part to another person

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If the materials belong to the maker, then the maker owns the new product

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If the materials do not belong to the maker, but he creates the new thing with the permission of the owner, then the terms of the relevant agreement between the owner and maker will govern the question of the ownership of the new thing.

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If the materials do not belong to the maker, and the new thing is made in the absence of any agreement between the owner and the maker, the question of ownership is determined in accordance with the rules of manufacture (specificatio)

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The manufacturing process must irretrievably alter the form, nature, chemistry etc. of the thing for the rules of specificatio to be applicable

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Specificatio does not necessarily involve a “mix” of the property of various owners. The crucial issue is whether a new thing is created which cannot be reduced to its original form or components.

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If the new thing cannot be restored to its previous form or state, then it belongs to the maker

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If it can be restored to its original form or state, then ownership remains as it was

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Specificatio does not apply to the natural development and maturation of live creatures

Mingling and Mixing •

Mingling and mixing occur when similar things of more or less equal value belonging to different owners are mingled or mixed without consent and become inseparable (liquids) or indeterminable (solids)

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Things which can be mingled or mixed are usually fungible things in either liquid or solid form

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The rules for mingling and mixing are triggered when the mingling and mixing occurs without consent and the mixture cannot be readily returned or restored to its previous state or individually identified.

Mingling and Mixing… •

The consequence of mingling is that the mingled liquids are co-owned in undivided shares

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Each owner’s portion must be legally separated before it can be vindicated

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In the case of mixing, the consequence is that ownership does not change; each owner can vindicate his proportionate share.

ACQUISITION 2 Acquisitive Prescription -

Refers to fundamental systems/ practicalities/ objective facts that need to be in play before the right can be said to have prescribed in your favour Possession that’ll lead to ownership

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Open and uninterrupted possession of property for a long time can lead to the acquisition of ownership by acquisitive prescription

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Sometimes the nature of the possession is not compatible with full ownership but may still lead to the acquisition of a limited real right (e.g. a servitude)

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When the acquirer has possessed the movable or immovable property openly as if owner for an uninterrupted period of 30 years, he acquires ownership by operation of law

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Acquisitive prescription is governed by the Prescription Act 68 of 1969. However, the source of the rule is the common law

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Acquisitive prescription applies to both movable and immovable property (i.e. land).

The requirements of possession •

The type of possession required is civil possession (i.e. a combination of sufficient and effective physical control with the intention of an owner)

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If possession of the property has been in contravention of a statute, then the possessor will not acquire ownership of the land, notwithstanding that all the other requirements are present

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The property must be possessed openly, as if the possessor was the owner thereof. This is sometimes described by the maxim “nec vi, nec clam, nec precario” (without force, without secrecy, without revocable permission)

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Whether or not the property was possessed “openly, as if owner” is determined objectively.

Uninterrupted 30-year period 

The acquirer does not have to be in possession personally for the entire period

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Thus, the acquirer can add to his own period of possession time that the predecessor was in possession, provided that the character of possession, including the mental element, is compatible with acquisitive prescription The acquirer may vacate the property from time to time, but he may not leave the property indefinitely In some case, the prescription period may be interrupted or suspended.

Interruption of prescription 

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If the prescription period is interrupted by natural means (e.g. if the land is flooded or the true owner demands the return of the property), the Prescription Act 68 of 1969 provides that if there is involuntary loss of possession, then prescription will not be interrupted if the acquirer regains possession either through legal proceedings within six months of the dispossession or by other lawful means within one year of the dispossession. If the prescription period is interrupted by civil means (i.e. when the true owner of the property institutes civil proceedings for the return of the property to him), the service of process halts the running of prescription pending the outcome of the legal proceedings. If the true owner’s claim is unsuccessful, or if he withdraws the claim, or abandons a successful judgment, then the consequence is that no interruption of prescription occurs. If the judgment is successful and acted upon, the date of the final judgment is the date on which prescription is interrupted.

Suspension of prescription •

Suspension occurs when there is a change to the true owner’s personal circumstances that affects his ability to form or maintain the animus domini which is a necessary element of ownership  Prescription ceases to run against a person who cannot assert his rights of ownership

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Sometimes the impediment is legal, rather than as a result of changed personal circumstances  For example, prescription cannot run against a person who is a minor or a fideicomissary.

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Under the common law, the consequence of suspension is that the prescription period stops running until the impediment ends

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However the Prescription Act 68 of 1969, suspension serves to extend the prescriptive period by three years after the date on which the impediment falls away  In other words, suspension only occurs if the 30-year prescription period would have been completed on, before or within three years after the date on which the impediment ended.

Prescription: practical example 1

Prescription: practical example 2

Prescription: practical example 3

Prescription: practical example 4

The Effect of Acquisitive Prescription •

The effect of acquisitive prescription is that, by operation of law, the acquirer becomes the owner of the property and is entitled to demand registration of the land so acquired in his name

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A court order is necessary before the Registrar of Deeds may register the property, unless the previous owner is willing to co-operate in effecting the changes to the title deed

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Acquisitive prescription of State land has been prohibited by the State Land Disposal Act 48 of 1961 since 28 June 1971.

Expropriation •

Expropriation is a mode of original acquisition of ownership, to the extent that, by operation of law, ownership is acquired by the State

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Expropriation takes place when an owner’s title in the whole or part of his property, usually land, is terminated against compensation

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Expropriation is expressly provided for in the Constitution and is effected in the public interest or for a public purpose.

ACQUISITION 3 Derivative acquisition of ownership •

Derivative acquisition of ownership describes a situation where the new owner’s title derives from that of the previous owner

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This is sometimes referred to as transfer of ownership, which involves a bilateral transaction (an agreement between two parties)

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Transfer of ownership commonly occurs through a contract of purchase and sale, but such a contract is not an essential element

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Transfer of ownership can also take place through donation.

Transfer of ownership as a separate legal concept 

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Transfer of ownership is conceptually separate from the contract underpinning it - Transfer is part of the acquisition of valid legal title - All requirements of a legal contract must be met Transfer of ownership is concerned with what is required to achieve transfer of ownership, while the contractual basis for the transfer describes why ownership is being transferred - The reason for the transfer taking place In order for transfer to take place, there must be a real agreement to transfer ownership and conveyance (delivery)

“Transfer of Ownership”

In effect, this means that: 1. The seller must intend to transfer ownership of the merx to the buyer 2. The buyer ...