Class notes
Property Law Outline Penn Carey Law Parchomovsky 2023/2024
- Course
- LAW 508-011 (PROPERTY)
- Institution
- University Of Pennsylvania
Property Law Outline Penn Carey Law Parchomovsky 2023/2024. Complete.
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PROPERTYProf. Parchomovsky
(Penn LAW 508-001)
1
, PROPERTY LAW
§ INTRODUCTION
1. Definition
Property Law governs the relationships among human beings that involve control over valuable resources
(assets).
2. Role in the system
Property is extremely important from different standpoints:
1) psychological standpoint: the language of possession is the mean through which we assert ourselves
(prof. Underkuffler).
2) economic standpoint: Friedman (economist) argued that there is a link between private property
and freedom because private property is the “most basic human right”.
→ the only way in which you can be free is by controlling your property: the relation that we
have with property in based on the idea that we invest as long as we believe that the returns would
belong to us and not to someone else (“no one has ever washed a rented car”).
In this sense, protection of property is a key determinant of growth and development of new enterprises.
• Why? What’s the causal mechanism? Protection of property promotes investment in assets and
maximization of their value through trade (in fact, we only invest if we can predict that the
outcomes will be ours).
• Downsides: Distribution of property determines distribution of wealth and wealth disparities
undermine social cohesiveness: disparities led to conflicts over valuable resources and thus, war.
→ the system should aim to stability and equity.
3. The Taking Clause
In our legal system property is a keystone right. It creates in rem rights that avail the rest of the world:
this means that property rights are not based on consent (they do not need a contract to be protected).
Property lies at the heart of the private law system and receive special protection by the U.S. Constitution,
in the 5th Amend (Taking Clause in relation to States):
“…nor shall private property be taken for public use without just compensation” (i.e. market value) → property rights
are protected not just against others individual members of society, but also against governments.
Blackstone characterized property as “the sole and despotic dominion which one man claims and exercise over external
things, in total exclusion of the rights of any other individual in the universe” (inaccurate definition, because property
does not give a person absolute exclusion rights and does not empower people to do whatever they want
with their property: e.g. cannot pollute, play very loud music at certain hours, exclude people from property
based on protected traits).
4. Three-dimensions analysis
There are 3 dimensions of property analysis:
1) scope of owner’s right and powers: absolute dominion.
2) number of owners: 1 owner.
3) definition of assets: determined by two forces, i.e., market force and law force (regulations).
5. Common Property (Group Ownership)
The most extreme form in open access, but it generally leads to overuse of resources a form of management
or use protocol is to be established by the group (the simplest one is vote), or by regulator.
2
, The problem of overuse appears when there is no veto power among the owners, there are no management
rules or protocols, so everybody could potentially do whatever he wants, imposing high costs on the other
members. One of the solutions is private property parcelization, through which the 3 dimensions of
property are changed:
- single owner instead of multiple,
- different scope, namely sole ownership,
- definition of asset, that becomes a parcel of the original one.
In other words, through parcellation we obtain a private property with single owner.
This solution, however, has a series of problems:
• boundaries with neighbors,
• asset reconfiguration: by changing the asset configuration, in terms of optimal land use (it brings
to the creation of sole property or common property again),
• limited exclusion: by changing the scope of ownership, is it possible to create a set of rights over
the property itself (rights of way/servitude),
• Inherent limitations/instability, due to scarcity of resources: when people die, the heirs are typically
numerous → while the asset remains the same parcel, the number of owners changes again. Re-
divide the parcel is not a doable solution because there is not enough land. Therefore, we start to
build-up, and that creates a new situation of mix between private (in single units) and common
property (in communities).
***
§ ACQUISITION OF RIGHTS
I. ACQUISITION BY CAPTURE (wild Animals: animals ferae nature)
6. Theories of acquisition
There are 4 possible theories of acquisition:
1) Actual possession (majority adopts this approach in Pierson): is preferable because it creates the
most definitive information about who owns what.
2) Certain control/mortal wounding (not good enough for majority).
3) Reasonable prospect of taking.
4) Pursuit (in Pierson, with large dogs)
Pierson v. Post (Sup. Ct. NY, 1805)– acquisition by capture/actual taking)
Facts: Post, aided by packs of hounds, was hunting for foxes in wild, inhabited, and unpossessed land. He
was chasing a fox when Pierson appeared, killed the fox and carried the body away.
Post sued and won in trial court, but Pierson appealed.
Issue: Which acts amount to occupancy or possession of wild animals? The Court mentioned 4 theories:
- Actual possession of the animal (majority),
- Certain control over the animal (consisting of mortal wounding or trapping) (majority),
- Reasonable prospect of taking (dissenting),
- Pursuit with large dogs, not beagles.
Principle: Animal ferae nature are part of the commons until an act of occupancy creates ownership over
it.
In this sense,
• an act such as mortal wounding or trapping could suffice (not necessary killing), while
• pursuit alone is not sufficient to establish ownership. → Post loses.
3
, Dissenting opinion: Ownership right shall tend to maximize incentives to reach a goal (in this case,
exterminate foxes), so ownership over foxes should be granted to any pursuer with a reasonable prospect
to catch the animal: according to such interpretation, the concept of property is extended.
7. Main issues at stake:
1) Theory of First possession v. Theory of labor, as two different acquisition principles.
• First possession (“first in time”) = this concept can be traced back to 17th century scholars,
and it is the result of an outcome-oriented theory (it is more about the result rather than the
investment of efforts). When you adopt this solution, there are 2 questions that must be
considered:
(a) what counts as possession? Usually, possession is sufficient when it
- puts other people on notice,
- guidepost is the effect on third parties.
(b) what is an asset? (could be difficult, i.e. regarding water).
• Labor = effort-base theory associated with the English philosopher John Locke (Second Treaties
of Civil Government 1689). How our private property rights emerge? What establishes that?
The reasoning Locke gave is:
- Everyone owns its own body.
- Every person therefore owns the labor that their body produces: my labor is an
extension of my body.
- Mixing labor with unowned, external resources establishes private property rights
in them: when we mix our labor with unknown resources, we take them away from
the commons and turn them into our private property.
- But what happens when two laborers put efforts in the same asset? Who gets it?
The person who invested first? The one who invested more labor? Shared
ownership?
2) Regime of Rules v. Standards, as the law always operates through two types of commands or
norms.
• Rules (realm of legislators/regulators) = contain a precise formulation of the prescribed
conduct (drive at 55m/h).
Clarity ex ante
Adv.
Certainty ex ante
Not flexible
Disadv. Inequitable
Over/under inclusive
• Standards (realm of Courts) = only provide a generalized description of the expected
behavior (drive at reasonable speed). More relevant when the situation is complex.
Flexible
Adv.
More equitable
Uncertain
Disadv.
Unclear
Acquisition rules/standards applied to Pierson v. Post:
rules standards
posses trapping mortal wound dogs reasonable expectation.
4
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