I. Acquisition A. Capture first to take possession, owns it

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Property Outline

Fall 2005

I. Acquisition

A. Capture - first to take possession, owns it

1. Wild Animals - must be captured/possessed to be owned. Pursuit is insufficient (Pierson)

a. Practical Certainty - an animal must be captured, mortally wounded or trapped so that capture/possession is practically certain (deprived it of “natural liberty”)

i. Not Enough - reasonable prospect of capture (even if “hot pursuit”)

(Pierson - dissent argues for following custom)

ii. Policies:

a. Competition - rewarding captor fosters competition, pursuit does not. Want to promote killing of undesirable animals (foxes).

b. Administrability - easier to admin capture than pursuit.

c. Administrability - if just pursuit, would be “fertile source of quarrels”

b. Exception - Custom in certain circumstances (Ghen)

i. an exception to the rule in a specific industry which can only affect a few persons is okay, when usage is a custom

a. Ghen whaling Rule - if fisherman does all that is possible to make whale his own, that is sufficient + narrow industry + industry wide custom

i. D wanted rule of capture applied

b. Policy:

i. if exception is not sustained, then this branch of industry will necessarily cease (no other means of appropriation, no other way to guarantee the fruits of labor)

c. Exceptions - rule of increase, animus revertendi (encourage domestication)

i. animus revertendi - captured wild animals that develop habit of returning to captor’s property belong to captor as they roam at large

a. escaped wild animals - captor loses ownership w/possession unless D knows animal belongs to prior possessor

ii. rule of increase - offspring belong to whoever owns mother

2. Constructive Possession-Wild Animals - owner of land is in possession of any wild animals on their property, until they leave/take off (ratione soli)

a. intentional interference with wild animals such that they flee property is only interference in that it interferes with a business [or commits tort] (Hickeringill)

3. Natural/“fugitive” Resources

a. Westmoreland - “minerals ferae naturae” - when mineral has tendency to escape w/o volition of owner [overturned by some jurisdictions]

i. when they escape, and go into other land, or come under another’s control, the title of former owner is gone

b. Water:

i. English Rule - “first to capture”/unlimited withdrawal from shared water

ii. American Rule - rule of capture only if usage is reasonable (e.g., unreasonable if harm neighbors)

iii. Prior Appropriation: First to appropriate and put to good use (American West)

a. upside - productive use of water

b. downside - encourages premature development

iv. Riparian Rights: owner of land along water has rights, subject to rights of other riparians, regardless of type of use (American East)

a. downside - encourages “bowling alley” parcels (water access)

c. Oil & Gas:

i. Escape - return to wild as common property. (Hammonds - Pl had rights to gas reinjected into their land by D)


1. Pierson - on unpossessed waste land, Lodowick Post and his dogs started and hunted a fox. Pierson then caught and killed this fox in view of Post. (in New York). Court held that pursuing alone gave Pierson no property right to the wild fox, which was acquired by Post through killing and taking the animal.

2. Ghen - Ghen shot and killed a whale, 3 days later dead whale floated to surface (without identifying marks) within the ebb and flow of tide discovered by Ellis, who recovered and sold it to Rich. Rich shipped out the blubber and tried out the oil. Plaintiff’s employee then laid claim to the whale. Court made exception capture rule - Ghen did all possible + narrow industry + industry custom.

3. Keeble - owns a decoy pond (with tons of decoys) that draws lots of wild fowl. On three separate days, Hickeringill shot a gun nearby and drive the fowl away. Court held Keeble was employed in a legal business which was interrupted by Hickeringill’s actions.

B. Demsetz/Blackstone Theories

1. Blackstone - property rights evolved as a concept of “natural right” (property in own person - Locke)

a. w/o ownership, no personal stake in creating/buying products of stable/modern society

i. Property may be defined by i) substance/definition and ii) use

b. property rights can be caused/conferred by

i. Labor on the land making use of it (agriculture, livestock)

ii. First to discover

iii. Mere occupancy (w/o use or competition)

iv. Taking by force

c. transferable property rights emerged as result of commercial traffic

d. Post-mortem - society allows continue of post-mortem property rights to preserve “peace of mankind,” thru either seizure by state or private transfer

2. Demsetz - property rights evolve to internalize externalities, when benefits outweigh negatives

a. hunters realize they have finite targets, thus consider limiting their and others’ actions (which is to their advantage)

i. communal property - extremely high externalities

a. false assumption - 10 cows on communal land, each “costs” 1/10 of whole

ii. trespassing - creates high transaction costs of communcal property

b. Externalities - the effect of one person’s activity on another, which that first person is not forced to take into account

i. externalities don’t always = inefficiency, but do encourage inefficiency

a. ex: often costly to individual to give group benefit, so will not do - which leads to “inefficiency” being born by all (p.49)

ii. it’s unwise for a society to ban all activities with costly external effects or to make all engaging in them pay for the effects, as efficient use of resources is an important benefit of private property

3. Demsetz - property rights - externalities continually internalize, increasing efficient use of resources/ improving general welfare

a. Exception - transaction costs - the “negotiating costs” of internalizing externalities when it is advantageous to do so

i. if transaction costs too high, then resources will not be used in most efficient fashion (externalities are caused by transaction costs)

b. Exception - tragedy of the commons - common property not used efficiently - overconsumption -b/c not enough incentive to internalize externalities (common w/pollution problems)

i. group cannot agree due to transactional costs.

ii. “free ride” may happen - one who won’t pay b/c believes that others will pay their share

c. Exception - anti-commonsUnder-use due to too many property rights or property holders

i. encourages under-use

ii. inhibits conveyance due to high transaction costs of determining owners (sometimes intentional preservation of prop. - make tiny parcels to drive up transaction costs of worthwhile purchase)

d. utilitarian theory dominant today - efficient use of resources most important aspect of property.

4. Coase Theorem - in a world where there are no transaction costs, it doesn’t matter what the rule (liability rule) is, resources will allocate to maximize utility

a. upshot - as you drive transaction costs down, you will have better allocation of resources.

b. Cf. other ways to get people to modify property-use to maximize utility

i. government regulation

ii. private interest groups can sometimes modify

iii. file a lawsuit (torts)

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