I wrote this article in June 2018 as the attempt to the final exam questions of the course 'Anglo-American Property Law'. The text is followed by the questions.
1.
The basis of American property law is custom. It’s instinctive to think that people cannot just grab something that is owned by others and contend that it belongs to him, but he can do so to an ownerless object. And this became law. In fact, first possession rule is so natural that it almost prevails all over the world. In China, though this doctrine is not written, it takes effect in judicial practice.
One other point is that the property law constructs the pattern of how economy runs. A single rule in such a fundamental law may influence many industries, and thus is vital for a country’s economy to thrive. American property law of course tries to build a fair and square business environment, as well as to incent people to create value.
A wild animal may be pursued and hit by several hunters, but it belongs to who finally captures it. It is reasonable in a primitive perspective, and the law absorbed this custom as a rule. When the person who make the most contributions didn’t finally catch the prey, the law ruled for the capturer (Pierson v. Post 1805). This indicates two things: Firstly, The law weighs criteria (here occupancy) over fairness. Secondly, the criteria tend to be simple, direct, and physical fact oriented.
Deciding who has the title to property is a very fundamental function of property law. The rules may directly influence how social production is arranged, which is a massive impact. So the rule has to be highly concise and easy to apply, like a straight pipe with large diameter in which water can flow fast and uninterrupted. Under this circumstance, if the law struggles to decide “who is worthy of what property” and rules complicatedly, lots of confusions may be generated in social production and thus lower the efficiency. To serve well as a social tool, property law solves these disputes quick and sound. From this case we can also discover that the American property law focus on actual control.
Actual control of the object is a vital basis to decide who is the owner. And that is as it should be, because things are only usable when they are actually acquired. Wild animals must be captured to be consumed or sold; Land must be possessed before somebody is willing to devote their efforts to growing crops. Controlling is the precondition of using, disposing and receiving earnings. In continental law systems, ownership contains four powers – possessing, using, disposing and receiving earnings. But in a perspective of real life affairs, possessing is the most important among the four. I think actual possessing is highly valued in American property law concept.
Possessing is sometimes extended to mislaid chattel which is still within the owner’s property (Benjamin v. Lindner Aviation, Inc. 1995). We may consider this a detriment of significance of possession, since finding and grabbing (taking physical possession) cannot grant a right against its owner in these circumstances, although the possession of the owner on the chattel is so vulnerable that it may be forgotten and left there forever. The law chose to protect the original owner, and I think that’s because chattels are more easy to be mislaid, and the owner’s negligence are more tolerable.
Adverse possession is another rule that the law uses to establish relationship between possession and ownership. I’d like to first talk about Solomon R. Guggenheim Foundation v. Lubell (1991). The true owner’s diligence is not required when seeking the return of stolen property. It’s an adverse possession case whose object is a chattel. However, in most cases, like Jarvis v. Gillespie (1991), real property’s owners bear the duty of diligence or they may lose their land. That is to say, the requirements of acquiring real estates through adverse possession is somehow lower than acquiring chattels. This difference seems unreasonable since the ownership of land normally deserves more legal protection than chattels.
To explain this difference, I found that it’s because the usage of a painting and that of an acre of land is different. Paintings, like other chattels, are easy to exploit its value – you can just hang the painting on the wall and people can enjoy its beauty. Real estate, however, need to be taken good care of – croplands, need to be cultivated to grow crops; houses, must be inhabited or they will soon become waste…… To make sure land is of good use, substantial human and material resources must be invested, and waste of land is more likely to happen. Wastage of real estate has also many detriment: land is finite so people may lose chance to farm just because too many lands is wasted by their owners; Wasteland will decrease the value of nearby land; occupied land may disturb others’ land extension…… With so many reasons, the use of land should be well-managed and well-incented. Such demand is from the nature of real estates.
Another way of thinking is that the personal property is more dynamic. It is usually in the processes of production, sale, exchange, consumption and finally become useless. It may also be stolen. So the owner will spontaneously exploit the value of it (and it’s easy to exploit as explained in the last paragraph). All chattels must fade away in the end. Unlike real estates, they are permanent. When they are owned, they are owned for good. Such property owners may neglect overseeing their land. This is when some hardworking people use their land to make a live which is good for social production.
Adverse possession in real estate is more common, because it plays a vital part in increase the efficiency of the use of land. The 1944 Restatement of Property, 5th § 458, states that even good faith is not a requirement of adverse possession.
Gift is an important and complicated situation that is regulated by property law. Disputes always arise when deciding a gift is valid or not because gifts are usually of great value. Two elements of gift are donative intent and delivery. Namely, the transfer of possession is the precondition of the transfer of title. The delivery requirement again emphasizes the importance of possession.
Foster v. Reiss (1955), it is a case in which the court found a gift invalid for lack of delivery, though several facts indicated that such delivery was impossible to be made. ‘Symbolical delivery’ theory did not prevail either in this case. It can be seen that the judges were very prudent to relax the requirement.
Intangible assets have no physical form, so they can’t be captured or occupied. Some documentary intangible assets, like bank books, are treated similarly to chattels. In Foster v. Reiss, the court cited Cook v. Lum and ruled that ‘delivery’ is ‘completely strip[ping] the donor of his dominion of the thing given, whether that thing was a tangible chattel or a chose in action.’
However, in many circumstances, the first thing to do with intangible property cases is to determine if the intangible property exists. In re marriage of brown (1976), the court discussed much about the nature of a ‘nonvested pension rights’, because it is divisible only when it’s a property. Intangible property is not as concrete as tangible assets. But once it is recognized, its ownership is usually undisputed.
2.
Acquisition by capture, find, creation and gift are basic manners of acquiring a property. I think the American property law’s practice proved the effectiveness and efficiency in serving the social economy regarding these rules. The ownership is protected to a reasonable extent, and criteria to settle the dispute of acquisition of the unowned is clear and simple to be carried out.
Adverse possession is the best embodiment of the saying ‘the law does not protect those who sleep on their rights’. But without question, there is also strong need of securing people’s properties. The key point is possession, which I prefer to use the word control. If the lack of control of your land leads to that others have access to your property (for so long time), the law tends to punish you and award your land to others. Of course such transfer of substantial value requires many conditions. So people must be very negligence to lose their property.
This rule serves well to make sure land is of good use. However, many people use the rule intentionally and seek to own the estate. We had to admit that the thrive of economy may need some with spirit of adventure, but this may incite those who want to reap where they have not sown. From a perspective of lawmaker, I think there is a way to avoid such situation – a certain amount of compensation, of course to the true owner. We all know that a government taking of land come with compensation. Taking is for the purpose of public. I think there’s some similarity here. Adverse possession of land is to utilize land, so as to benefit the whole society. If the law decided to strip the title from the true owners, they should at least be compensated like government condemnation. In addition, the type of land should be limited in adverse possession. For example, cropland in the country is better to be ruled by adverse possession because they yield crop and make money, and they are often larger in acreage. Residences for private living purpose don’t look reasonable to be occupied by others. Because the act of living is more like consuming the property rather than facilitating value-generating activities.
Overall, the American property law facilitates the economic activities of U.S., many rules in American property law make the law a better social tool to support social production. It focuses on the physical fact of possession when deciding ownership, which is down to earth and therefore effective.
Property Law
Final Exam
1. How does American law decide who has title to property? Are the rules different for personal property, intangible property, and real estate? If so, how do they differ? Please use at least 4 cases (you may use more) that support your conclusion. (60 points).
2. Based on your answer in Part I, do you think these rules work well? Why or why not? Would you choose a different way to award title? Why or why not? Please use cases and material from class to support your answer. (30 points).