Property Theory Three PDF

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PROPERTY THEORYPossessionPossession is the intentional exclusive physical control of a thing. A person who takes physical control of land or goods, with the intention of excluding all others from it or them, acquires possession of it or them as a matter of law. This is the case even if the taking of...

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OSODO WILLIAM OYAMO

PROPERTY THEORY

Possession Possession is the intentional exclusive physical control of a thing. A person who takes physical control of land or goods, with the intention of excluding all others from it or them, acquires possession of it or them as a matter of law. This is the case even if the taking of control was unlawful. Relationship of possession and ownership In his essay ‘Ownership’, Honore puts the right to possession as the first of his necessary ingredients in the notion of ownership, and describes it as ‘the foundation on which the whole superstructure of ownership rests’. Thus, in a sense, possession is simply an ingredient of ownership, and it is inherent in our idea of ownership that an owner of a thing has the right to take and keep physical control of it, to the exclusion of all others. However, the interrelationship between the two is more complex. Possession Procedurally, English law is more concerned with possession than ownership. The law regards any person who is in fact in possession of land or goods as lawfully in possession, and any invasion of that possession as unlawful unless made by someone with a better right to possession. In other words, once a person has acquired possession, by any means whether lawful or unlawful, they thereby become entitled to possession as against everyone except a person with a better right to possession. Possession plays a key role in proving entitlement to a thing. It is much easier to prove possession than ownership. Most things-even tangible things-are not authoritatively labelled with the name of the owner, and there is no gigantic universal register on which ownership of all things is recorded, so there is no obvious way of proving conclusively non-ownership of a claim to own a thing. Possession on the other hand is relatively easy to demonstrate by showing exclusive physical control of a thing with the intention of excluding all others from it. Possession is also a reasonably good indicator of ownership because as a matter of observable fact, in the vast majority of cases, possession coincides with ownership. 1|Page

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Consequently, in our legal system, the basic principle that has evolved is that possession is prima facie proof of title. A possessor is assumed by law to be the owner in the absence of evidence to the contrary. Since possession of a thing is a right in relation to the thing enforceable against third parties, it is by definition proprietary. It is also proprietary in the sense that the right acquired by taking possession is transmissible: Pollock and Wright, Possession in the Common Law, state: ‘ the Qualified right of property which arises from possession must therefore be a transmissible right, and whatever acts and events are capable of operating to confirm the first possessor in his tenure must be capable of the same operation for the benefit of those who claim through him by such a course of transfer as would be appropriate and adequate, if true ownership were present in the first instance, to pass the estate or interest which is claimed.’ Ingredients of possession In order to determine whether the control over, or the use to which a person puts a thing is such that that person can be said to be in possession of a thing, the law looks at two aspects of the relationship between the person and the thing.  First the nature and degree of physical control exerted by the person over the thing, and  secondly, the intention with which that control is exerted (animus possidendi). Thus, what is required is that the person should have effective control of the thing with the intention of excluding the rest of the world from it. i.

Factual control

The nature and degree of factual control required varies depending on several factors. While it is said that control must be exclusive so as to exclude others from the use of thing, this requirement varies depending on the circumstances. Pollock and Wright state that ‘physical possession is exclusive, or it is nothing.’ a. Relation of title and factual control First, a person with the better title will find it easier to prove factual control than a person with a weaker title or no title at all. In Jones v. Maynard, 1849, it was said: ‘if there are two persons in a field, each asserting that the field is his, and each doing some act in the assertion of the right of possession, and if the question is, 2|Page

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which of those two is in actual possession, I answer, the person who has the title is in actual possession, and the other person is a trespasser.’ It follows that different degrees of factual control are required of different parties, depending on the circumstances. It is easier fora rightful taker to prove she is in possession than it is for a wrongful taker. It is also difficult for any taker to prove sufficient acts of intentional exclusive control for as long as the rightful possessor is still trying to exert some degree of control, however slight. b. The nature of the thing possessed Secondly, the nature and degree of control required varies depending on the nature of the thing said to be possessed. Some things are more susceptible to exclusive physical control than others, and in such cases a person claiming to be in possession is likely to have to demonstrate total physical control by showing that they can prevent all others from using or intruding on the thing. In the case of other things, however, it may be impossible, pointless or unnecessarily expensive to ensure that all outsiders are excluded. In such cases, very attenuated physical control may suffice. Thus, in Fowley Marine (Emsworth) Ltd v. Gafford [1968]2 QB 618 CA, the Plaintiff was held to be in possession of the bed and foreshore of a channel of tidal water over which there were public rights of navigation. Since there was no question of the Plaintiff being able to exclude anyone from the channel, the court accepted that the fact that the Plaintiff had laid (and licenses others to lay) permanent moorings in the bed was sufficient to establish possession. c. The purpose for which the thing is used If the use to which a thing is put does not require exclusion of others from its use, can there be possession? It may be that the answer is yes, if, even though they do not wholly exclude others all the time, it can nevertheless be demonstrated that they have an ability and intention to prevent others making use of the property. It may also be that possession is simply an inappropriate concept in the context of such use of things, and that a more simple and fruitful way forward would be to recognize that in such cases, possession is not an appropriate prerequisite for title. d. Control through agents and control of contents Finally, a person can be in possession of a thing without personally having any physical control over it, if someone else has physical control on his behalf. Also, 3|Page

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the person in possession of a thing is also prima facie in possession of all its contents. However, complications arise when the possessor is unaware of either the existence of the contents or their precise nature.

ii.

Intention required

a) Intention to exclude There must be an intention ‘in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow’: Slade J. in Powell v. McFarlane. What is required: First, it did not matter that the acts of possession were performed in the mistaken belief that the actor was owner, for such a person can have no intention to exclude the true owner. He does however have the intention to exclude the whole world, and that is all that is required. Those who take possession in the mistaken belief that they are entitled to do so are as much in possession as those who consciously take as trespassers. Secondly, it is not necessary that the person assumed control with the intention of acquiring or assuming ownership; what is at issue is possession. b. Effect of ignorance At first sight, the necessary element of intention might appear to be wholly lacking in a situation where a person is in possession, i.e., in intentional physical control of something, whose existence he is unaware. In most cases a person in intentional control of a thing can be safely assumed to intend to control its contents, and difficulty only arises when the contents prove to be different from those anticipated, or wholly unexpected. On the other hand, there are circumstances where it would be inappropriate to assume that a person in control also intends to assert control over the contents for example, goods abandoned in the public part of a shop, or an airport lounge open to the public.

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Possession of land Whereas possession means intentional exclusive physical control, it is possible to be in intentional exclusive physical control of land without being in possession of it. The essential distinction is between possession and occupation.

Possession and occupation A person granted the right to possession of land acquires a proprietary interest, whereas a person granted a right to occupy it-even if it is exclusive occupationacquires only a personal right. An absolute owner of land can of course grant someone a personal right to occupy the land fora limited period without granting him possession of the land. Such a right-a licence -might be exclusive in the sense that it gives the grantee a personal right to exclude the owner for the duration of the permission. Nevertheless, the right is purely personal and not proprietary and it will not be enforceable against anyone other than the grantor (Hill v. Tupper). The distinction is important because a lease characteristically of private property interests, is in principle assignable and enforceable against third parties whereas a licence is not. Secondly, as regards statutory protection of occupiers has traditionally been available only to tenants, and not licensees. Thirdly, it is sometimes said that licensees, unlike leases are revocable by the grantor. However, the truth is that in cases of leases there are strict legal rules governing the permissible duration of the lease and the mechanisms by which it can be terminated. In the case of licensees, the duration of the permission to occupy and the question of whether it can be withdrawn depends entirely on the contract agreed between the parties. Lastly, the caveat emptor-buyer beware- principle generally applies to leases, but not licences. Thus, a landlord, subject to a few exceptions gives no warranty about the state and condition of the land or that it is fit for the purpose for which it is let. This is not true in relation to licences, so that in this respect at least licenses of land can be in a stronger position that lessees.

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Protection of possession To a large extent, English law protects property rights by protecting possession rather than protecting ownership. In this respect, among the peculiarities of the law is that the main mechanism for dealing with complaints about infringement of property rights is the law of torts. So, although property law provides a direct action for the recovery of possession of land, there is no equivalent action for recovery of goods. Instead, when wrongfully deprived of goods, an action will be in conversion. Similarly, an action for damage to goods or interference with use and enjoyment of goods will be dealt with by the tort of trespass to goods (and possibly negligence). The problem is that in tort, the emphasis is on the commission of a wrong by the defendant, and this gives rise to a significant complication in many areas of the law relating to goods and to necessary differences between rules applicable to land and those applicable to goods.

TITLE Goode in Commercial Law at 52-54 states of title: ‘A person’s title in an asset denotes the quantum of rights over it which he enjoys against other persons, though not necessarily against all other persons. His title measures the strength of the interest he enjoys in relation to others.’ Title can be legal or equitable. Equitable interests arise where the legal title holder intends to transfer or grant a legal estate or interest to the grantee but for some reason or another has not yet completed the process necessary to carry out the intention. When this happens, the intended transfer is effective in equity although not yet effective in law. Thus, the grantee has an equitable interest in contrast to the legal interest he intended to get. In our legal system, it is particularly important to distinguish a person’s entitlement to an interest from the interest itself because our system is primarily concerned with relativity of title rather than with absolute title. In other words, when a person claims to be entitled to a particular interest in a thing, it is usually sufficient for him to prove that his entitlement, or title, to the interest is better than that of the person disputing the claim; it is rarely necessary for him to prove absolute entitlement. When two or more people have titles to the same interest in a thing, the rival titles will be recognized by law, but they will have different relative strengths, and in a 6|Page

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dispute about entitlement to the thing (or more accurately entitlement to ownership or to some other interest in a thing) between any two of them, the court is interested only in the relative strengths of their titles. In other words, one need only show that he has a better title than the other party to the dispute, not that he has a better title than anyone else in the world.

Acquisition of title The person with the inferior title will not usually be able to defeat the claim of the other by demonstrating that there is a third party, not party to this dispute, who has the best title of all. The possibility of rival titles arises because titles can be acquired not only be derivative acquisition, but also by original acquisition. a. Derivative acquisition Derivative acquisition covers those cases where the title is derived from that of the previous title holder. This can be by way of a disposition such as selling or giving or by way of inheriting. Alternatively, the interest may derive from that of the predecessor by grant-retaining the interest but granting a lesser interest carved out of it. For example, the holder of a freehold may grant a lease in it. In most cases a property interest passes from one person to another, or is carved out of a larger property interest because the parties intend this to happen and deliberately take steps to achieve it. How property interests pass from one person to another whether it involves a gift or is part of a bargain or inheritance is essentially a matter of formalities, the formal requirements that the law imposes for a property interest to pass from one person to another. The classic function of formalities was provided by Lon Fuller in ‘Form and Consideration’ (1941) 41 Columbia Law Review, 799, where he stated that formalities perform three functions: evidentiary function, cautionary function and ‘channeling’ function. For the evidentiary function, the formal requirements such as writing or attestation by a witness provides evidence of the happening and meaning of the event, for example contract or transfer of an interest in land. This is for the benefit of the parties themselves and their successors should there later be disagreement, because it means there will be adequate evidence which courts can adjudicate. Other writers have said that formalities such as witnesses and signatures can also provide 7|Page

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evidence of the identity of the parties and that they knew what they were doing and did it intentionally rather than inadvertently. As for the cautionary function, many formalities are intended to put people into extra trouble so that they are made aware of the significance of what it is they are doing. This will force them to stop and think and guard against ‘rash and illconsidered decisions that they may regret later’: Patricia Critchley, ‘Taking Formalities Seriously’ in S. Bright and J.K. Dewar, Land Law Themes and Perspectives, Oxford University Press, 1998, Chapter 20. She also says that the unfamiliar formality might also prompt people to seek legal help in completing documentation, and the lawyer might be able to give them general advice about the implications of the purposed transaction and ‘should be able to detect and prevent the application of external pressure’. As to the channeling function, rules stating that transactions will not take legal effect unless put in a legal form offer ‘channels for the legally effective expression of intention’. They tell those who do not want transactions to have a particular legal effect how to avoid that happening, and they also tell those who want them to have particular effect how to achieve that end. The message can be read both by courts in disputes and by third parties affected by the interests. Joseph Perillo, ‘The Statute of Frauds in the Light of the Functions and Dysfunctions of Form’, (1974) 43 Fordham Law Review, 39 at 49 makes the point that formalities can have the advantage of ‘earmarking’ the point at which promise and negotiation turns into obligation. Critchley identifies two other functions. First, formalities help in clarifying the terms of the transaction because ‘the very fact of reducing the agreement to writing will help to highlight gaps or uncertainties in its terms’. Secondly, publicity, that some interests such as mortgages and charges pose such threats to prospective purchasers that it is justifiable to insist that they should be put in such a form that the existence and terms of the interest are made apparent to the whole world. Requirements of writing and registration can also provide both a paper record of transactions on which tax can be levied, and also data from which statistical evidence can be gathered. The main disadvantage is that the strict implementation of formalities can lead to unjust outcomes in individual cases. As Lord Nicholls said in Wilson v. First County Trust (No. 2) [2003] UKHL 40, ‘[t]he unattractive feature of this approach is that it sometimes involves punishing the blameless pour encourager les 8|Page

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autres’. Individuals are made to suffer undeservedly, or are allowed to break promises, defeat legitimate expectations or keep undeserved benefits, solely in order to preserve the integrity of the system. The other disadvantage is that formalities add to costs of transactions, not so much because they involve direct expenditure, but because they are designed to put people into extra trouble. Also important is the point at which property in derivative acquisition passes from one person to It is essential that property should pass at a fixed and ascertainable point so that everyone knows whether or not, at any time a thing is or is not affected by interest. b. Original acquisition Title can be original in the sense that it is not derived from anyone else’s title. Original acquisition occurs in three types of situations. i.

Original interest holder

First, is when someone becomes the first ever (hence original) interest holder in the thing. The law treats a person as having an interest in a thing by virtue of having created it or mixed her labour with it in the Lockean sense, or by having taken an unowned thing and reducing it into private property by taking possession of it. ii.

Title by possession

A new title to a thing can arise notwithstanding the fact that someone else already has a title to that thing. The new title does not derive from, but is independent of, the pre-existing title. The most significant way of acquiring a new title to a thing to which someone else is already entitled is the same as the ...