Property Notes for Test 1 PDF

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Property Notes for Test 1 FUNDAMENTALS OF PROPERTY Henry E Smith and Thomas W Merrill – what is property?  Property defines the entitlements people can enter into contracts about, or can sue in tort in order to protect  Economists regard any expectation about being able to derive value from some resource as “property”  Legal scholars – would require at a minimum some kind of social guarantee for an expectation to count as property  Two categories o Real property o Personal property (chattels)  Intellectual property – patents, copyrights and trademarks o These are regarded as being property despite not being a right to any physical thing  Some property, for example beaches, might be said to belong to the general public – they are “inherently public” in the sense that even the government cannot bar member of the public from access  Whether there is any essential feature or element that distinguishes property from other types of claims?? o Blackstone’s (Blackstonian view) – EXCLUSION  Essential core to the nature of property – the right to exclude others from some thing  “there is nothing which so generally strikes the imagination that engages the affections of mankind, as the right of property”  “that sale and despotic dominion which one ma claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe”  Owner = has the right to exclude other’s use of the thing and has the right to use the thing unless some other restriction (e.g. criminal)  “external things of the world” – the object of the property relationship must be differentiated from the person or group owning it o Legal Realist Bundle of rights  Denies the existence of any essential core to the concept of property  Property is just a word denoting a bundle of rights – just some rights that exist – they do not have any particular form or context  A right can be added or removed without necessarily changing the characterization of the bundle as “property”  This legal realist theory was started in 1920s to debunk the notion of property as a natural right protected by the Constitution against fundamental return  Exclusion based view – the right of any owner to act as the gate keeper over some thing – deciding who and what to exclude and include  Advantage of starting with the right to exclude as a base line concept

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o It permits us to protect a wide range of interests in use, w/o requiring outsider like officials or judges to know how much about those uses The Thing’s the Thing – “Law of things” o Contract rights – agreements b/w persons, which creaye obligation on these persons with respect to each other and no one else o Contract rights are in personam – they are personal rights with respect to persons o Property rights in contrast bind the world o Property rights are in rem – things rather than people o Personal rights in the law of torts are similar – bind all other persons in the world LIMITATION – one implicit limitation on a set of things that are subjected to ownership is that they must be things worth managing through the exercise of exclusion of rights (stars and planets NOT things because they aren’t subject to ownership, there is no feasible way of extracting value from them) John Locke o People own their own bodies and hence their own labour o When a person mixes his or her labour with resources that are unclaimed by anyone else, these resources become his or her property o “the preservation of property being the end of government, and that for which men enter society” General Justifications that gives exclusive rights to persons over things they own? 1. Provides an effective way of managing society’s resources 2. Provides a powerful set of incentives for persons to make investments in and engage in effective management of resources they control a. “reap where he has sown” 3. Facilitates the making of contracts regarding the use and control of resources a. In order to contract for the exchange of or modifications to the use of resources, it is necessary to know who controls what resources 4. Property is an important source of individual autonomy a. Provides material means for individuals to achieve a degree of independence 5. Important to the preservation of liberty a. The right to exclude others from things is a source of power over other people Problems about the institution of property: 1. Externalities a. The private property strategy entails dividing the world up into separate parcels of land, each with an individual owner b. But the owner-managers of these individualized units of property may use them in ways that have spillover effects for the owner-mangers of other units of property c. Spill over effects that have adverse consequences for others, known as negative externalities d. E.g. A can use A’s land in a way that generates pollution damaging to his neighbour B 2. Monopoly

a. A monopoly of control on someone with respect to a particular resource 3. Leads to commodification of values and social relations 4. Promotes inequality a. By allowing owner to exclude others, permits the owner to capture the fruits of the property b. Rich get richer What is property? – RIGHT TO THINGS  White v Chandler – “these are property rights which are at issue. They must be strictly enforced. Next to constitutional rights, property rights are the strongest interests recognised by our law."  US Constitution (5th amendment) “private property [shall not] be taken for public use, without just compensation”  Irish Constitution, Article 43(1)(1): “The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.”  Tolstoy: “In our time property is the root of all evil and of the suffering of men who possess it, or are without it, ... and of the danger of collision between those who have [it] and those who have it not. [A]t the same time, property is that toward [which] all the activity of our modern world is directed, and that which directs the activity of the world.”  What is the purpose of identifying a person’s property? o Identify what is theirs? What are their valuable resources etc. o Rights under contract (e.g. owning intellectual property – copyright)  Sometimes all assets/wealth/legal claims a person has are their property o [economic perspective] o Bankruptcy / Insolvency o Estates on death Summary “private property is a relationship among human beings such that the so-called owner can exclude others from certain activities or permit others to engage in those activities and in either case secure the assistance of the law in carrying out his decision” - Felix Cohen What is property law?  Property law deals with two common difficult questions o Who is entitled to use the thing? o How are they entitled to use it?  Certain people are determined owners of things, and we are entitled to use them, subject to some limits  The importance of time in these developments  How far will contract take us?  The role of Government o In NZ have a system in place (rules about resources) that has been imposed upon pre-existing society – putting in place the English norms about

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ownership of property and telling the local Maori that they have to conform to these  These caused major problems when more of a community approach that was meant to carry across generations was overtaken by individual ownership Access of some and exclusion of others (balancing question?) – who should have access to resources given society values?? o Need to exclude other people or else items as simple as clothes would not be useful Ben McFarlane  “The property law system... provides a set of technical rules to determine any issues about how has access to things and who is excluded o [who is entitled to use things, so that] the big-hitter [political controversies about property] do not slug it out directly: the contest is settled over the chessboard, not in the boxing ring. o Less destruction is caused; but fewer spectators are attracted.” Ben McFarlane  “Of course, chess can be interesting – but only if you know the rules. And the rules of the property law system are worth knowing. Their genius lies in their ability to deal with both very simple and very complex disputes. This means that, whilst the system is bewildering at first, cracking the code allows you to understand even the most difficult cases.”

William Swadling “Property: General Principles”  Law of Property o = area of law concerned with certain types of rights between persons with respect to things, those things being either land or goods, and those rights being proprietary rather than person  Property Rights and Personal Rights o Personal rights in respect to things  Enforceable against a particular person  Hill v Tupper – the grant operated merely as a license or covenant on the part of the grantors, and was binding on them as between themselves as the grantee, but that it gave the latter no right of action against third parties o Property rights in respect to things (Proprietary)  Binds strangers to their creation  Enforceable “against the world/third parties”  Property right is not invariably superior to a personal one – e.g. if I lend you a car over which I have a property right and, without any fault on your part, the car is destroyed by fire, I must bear the loss o To Help with the distinction….  Scenario - A transfers title to a car to B (by mistake), A wants car back, B becomes insolvent  What if A has only a personal right?

They stand in the same shoes as all the other creditors who have a claim against B  If you just have a personal right then you will only get 50%  You share in the misfortune of only getting a portion back  What if A has a property right?  The car can’t be taken and put in the pool of assets  You are owed the full value of your property  The insolvency issue doesn’t apply to you o Distinguishing property from personal rights  Numerous clauses (closed number) of property rights  Hill v Tupper – a grantor may bind himself by covenant to allow any right he pleases over his property, but he cannot annex to it a new incident, so as to enable the grantee to sue in his own name for an infringement of such a limited right as is now claimed o Thus as a matter of personal obligation, what the parties agreed to was perfectly valid, but as a matter of property law it was not o ‘to admit the right would lead to the creation of an infinite variety of interests in land, and an indefinite increase of possible estates  Keppel v Bailey – the defs predecessor in title, the lessee of an iron-works, had promised the claimant that both he and his successors in title, the lessee of an iron-works, had promised the claimant that both he and his successors in title would buy all the limestone to be used in the iron-works from a particular quarry and no other – in holding that the right given to the claimant did not amount to a property right and could not therefore bind the def  Principle confirmed in King v David Allen (Billposting) Ltd  A gives B a right to live on A’s land. A transfers ownership of the land to C. C tells B to leave.  What if B has only a personal right? o If you have only been given a personal right then you have to leave  What if B has a property right? o Can say, NO, A gave me the right, if they have a property right, not just a promise not to sue for trespass o Different school of thought  List is not closed, merely difficult to enter  E.g. National Provincial Bank v Ainsworth  Wife deserted by husband, left in matrimonial home  Husband mortgaged title to bank, then defaulted on payment  Bank seek an order for possession against wife Classification o Real vs personal property 

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Real is about land and rights to land (real estate) Personal is everything else – pretty much anything that isn’t land  Tangibles, intangibles, pure intangibles, documentary intangibles (obligations to pay or deliver goods) o In rem – avails against persons generally or universally o In rem vs in personem  In rem – is another way of property rights (we can talk about in rem, but here we are speaking about property rights)  In rem basically means enforceable against everybody  In personem – personal rights against a particular person Enforcement of Property rights o if def doesn’t comply, claimant can secure enforcement by court Contribution of equity o Longer list of property rights than does at common law o Sometimes anticipates the grant or transfer of property rights at common law  Applying the maxim ‘equity looks upon that as done which ought to be done’, anticipates the final outcome of the contract and finds that the vendor holds the particular right promised o It is more forgiving than the law of failure to comply with requirements of formality o Institution of the trust, a device developed for the holding of both peronl rights (debts and shares) and property rights  

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The Nature of Proprietary Interests – Richard Calnan  The distinction between personal and proprietary rights o Proprietary rights = a right in relation to an asset which is available against persons generally o Personal right = any other kind of right o What distinguishes the two is the availability of that right against persons generally  How do I known whether the right I have is proprietary or personal? o It is the kind that could possible be a property right (e.g. lease or carparking)?  This is a CLOSED LIST o What transaction did the parties intend; was I given a property right? o Did I comply with any formalities for creating the property right (e.g. writing, registratin

Hill v Tupper  Facts: o The plaintiff (Hill) – was granted a lease of land on the side of the Basingstoke Canal by the canal company o The lease also gave the plaintiff the sole and exclusive right to put pleasure boats for hire on that stretch of the canal. o The defendant, Tupper, was the landlord of an inn which adjoined the canal bank. o Plaintiffs claimed that the defs, well knowing the premises, wrongfully and unjustly disturbed the plaintiff in the possession, use and enjoyment of his said right, by wrongfully putting and using divers boats on the canal for purposes of pleasure. o Plaintiff was not only greatly disturbed but lost great gains and profits  Background o England - In early day’s they used canals as a useful method of navigation o They do this by creating a new company through statute – make them a legal person – they are required to make the canal and make legal decisions regarding the canal o The canal company grants an innkeeper a lease of land beside the canal o Plaintiff was a boat proprietor – by virtue of demise claimed the exclusive right of letting out pleasure boats for hire upon the canal o The inn keeper is the def – located on the canal aswell – it was said by the plaintiff that the innkeeper is hiring out pleasure boats (for diving) o The plaintiff says no I have the exclusive right to do that (exclusive right of the canal to hire out pleasure boats)  Issue – Plaintiff says you may not use the canal for this purpose because that is the right that the canal company gave me. Is this valid? o S 100 of the statute – “ may be lawful for the owners/occupiers of any lands or ground adjoining to the canal, to upon the said canal any pleasure boats or boats, for the purpose of husbandry only, or for conveying cattle from farm to farm, w/o interruption….”  The def is allowed to put boats on the canal for certain purposes  Parliamentary Sov  The canal company cant grant a right that is contrary with this statute o Plf’s argument…  Statute doesn’t have that affect – they can put pleasure boat or boats, or any other boat, for the purpose of husbandry only, or conveying cattle from one farm, or part of the farm  Seems to say it is of limited purpose (moving animals)  It is not entirely clear what the statute actually gives us  Plaintiff had a property right with the canal to some extent – they had a lease of the building. Plaintiff is trying to say that this dotted line here extended on to the canal is also protected

Rights to profits – profit’s is a kind of rght that a person can have in relation to land (e.g. take resources from the land e.g. fish)  The plaintiff’s lawyer is saying I didn’t have a lease of the canal but when you look what I got under this contract it was a recognised property right because it is just like profit  “analogy” - fishery, or right of turbary, may sue for disturbance of this right o Def’s argument…  This is not a property right – you have a right but it isn’t property so it isn’t enforceable against 3rd parties  It binds the canal company to the plaintiff  We aren’t bound by this personal right between you and the canal company  Canal company has not provided the plaintiff a right to exclude other people Keppell v Bailey o There are certain known property rights – we can’t just create property rights at the fancy of any owner  If we could then a great detriment and confusion would arise Bramwell o If that were true then the number of rights would be infinite Pollock CB o “if the plaintiffs contention were correct, the number and variety of rights which might thus be created over land for a particular purpose would be infinite. Martin B o Same as other judges o The grant iis perfectly valid between the plaintiff and canal company but in order to support this action, the plaintiff must establish that such an interest vested in him that the act of the def amounted to an eviction Conclusion/result o You can’t just come up with a property right o This grant is just a license to the proprietor which is binding between them and not the third party o A grantor may bind himself by covenant to allow any right he pleases over his property but he cannot enable the grantee to sue in his own name for an infringement. You can only give a property right if the property right already is part of the closed list of rights. Stands for the principle that you CANNOT have rights over waterway in the fashion of exclusive access 

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Numerous Clausus today:  Def = Property rights are subject to the principle of numerus clausus, which is a restriction that means that it cannot be up to the contracting parties—or private persons, more generally—to create new forms of property right, but only to trade rights that take existing forms.

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Still exists Should it still exist? Particularly when we have a registration system for land, and all sorts of interests are noted there – and we must also know the planning law to really know our rights?

Escrow Holdings Forty-One Ltd v District Court  Facts o It is a dispute over land o There are 3 plots of land (plot 2, 3 and 4)  Apartment owners own lot 2  Building owners own lot 4 o Both have ownership of lot 3 (co-ownership) – this meant that both of these persons could go onto lot 3 – they would both park their cars on lot 3 – they had the right to go onto the land and had the right to exclude others o They then said let’s agree we will only ever use this land for car parking  This was a covenant – contract with each other  They are both owners so can do what they like so can’t exclude each other  Nobody can now do anything else on it except carparking o Problem arises when the apartment owners lose their co-ownership of lot 3 o This means that lot 3 & 4 are now owned by new building owners o New building says to the apartment owners that you are not allowed to come onto lot 3 now o But the apartment owner says I’m still bound by this covenant o Current builder owner says yes, I can see that I’m bound by this covenant and says yes, I’m only going to use it for car parking but says you can’t use it for car parking unless you are going to pay me some money o Apartment owners don’t like this result – previously were allowed to park there but now to park there they need to pay o The covenant says only that the land can only be used for carparking nothing about co-o...