Property Keynote.pdf

!PROPERTY LAW

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ATTY. ERWIN L. TIAMSON SATURDAY CLASS 8:00 AM TO 12:00 PM

What is property?● In General - Strictly speaking, ‘property’

is a general term for the rules that govern people's access to and control of things like land, natural resources, the means of production, manufactured goods, and also texts, ideas, inventions, and other intellectual products.

● A system of managing resources. ◦ Capitalism vs. Socialism ◦ Common ownership vs. Private Ownership

What is property

● Property in the broadest sense is a set of claims that people have in resources that correspond to duties of respect in others.

● E n t i t l e m e n t t o r e s o u rc e s protected by legal institutions

Property as Thing● Property rights pertains directly on

things, rather than people, it is in rem ◦ In rem - the right attaches to the object,

rather to particular people, it is universally binding on all who encounter the object. ◦ Quieting - binds all conceivable claimants

whether or not they have participated in the proceedings; ◦ Property must be things worth managing

though the exercise of exclusion right

THEORIES ON PROPERTY

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Theories on Property

● Helps form the foundation of property law.

● No one theory is accepted as the only justification for property.

● Property rights is usually a blend of different approaches.

● First Possession ● Labor ● Personhood ● Utilitarian ● Democracy

Theories on Property

FIRST POSSESSIONFirst possession is the root of title - Carol Rose

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First Possession

● Practical rule - Who had it first. ● Describes how unowned resources

came to be owned ● Best in in settings were resources

are plentiful but people are few ● Less relevance today because almost

every tangible things are owned by someone

● Carol Rose on Possession as Origin of Property ◦ Common law – possession or occupancy as

the origin of property ◦ Wild animals, Discovery ◦ Analogies show up time and again when courts

have to deal on a non-statutory basis with some "fugitive" resource that is being reduced to property for the first time, such as oil, gas, groundwater, or space on the spectrum of radio frequencies.

First Possession

● Pierson vs. Post - “occupancy" or "possession" went to the one who killed the animal, or who at least wounded it mortally or caught it in a net. ◦ ”Control” gives rise to possession and

hence a claim to ownership. ◦ Notice/Intent – to enable others to

dispute the claim

First Possession

●Brumagin vs. Bradshow – Is the owner’s (Treat) act sufficient notice of appropriation? ●The court ruled that the jury should decide

whether Treat's acts gave sufficient notice to the public that he had appropriated the property. If so, he had "possessed" it and could pass it on as an owner. ◦Carol Rose - If the use that Treat made was unsuitable, his use would not give notice of his claim.

First Possession

● Johnson v. McIntosh ◦ Thomas Johnson claim of title – Sale from

Piankeshaw Indian Tribes ◦ William McIntosh claim of title – Patent from US

Government ◦ “Discovery Doctrine” – law of nations; extinguish

the right of occupancy by indigenous people ◦ Became the foundation of real property

ownership in colonies ◦ Carino vs. Insular Government – Different view,

Justice Holmes recognises property rights of native inhabitants of the Philippines

First Possession

● Popov v. Hayashi ◦ Barry Bond baseball case ◦ Popov sued Hayashi for conversion,

believing that once it had touched his glove the baseball became his and although Hayashi came about it legally, he still had the duty to return it to its rightful owner.

First Possession

● First possessor not a worthy gatekeeper ● The doctrine of adverse possession

operates to transfer property to one who is initially a trespasser if the trespasser's presence is open to everyone, lasts continuously for a given period of time, and if the title owner takes no action to get rid of him during that time.

First Possession

● Problems ◦ Signs, symbolic gestures or clear acts of

claiming and notice – difficult to demarcate ◦ Actions must be understood and taken

seriously by the community ◦ Not appropriate when resources are scarce ◦ “Tragedy of the Commons” – over

consumption, i.e. fishing in international waters, maximum gain in shortest time

First Possession

LABOR THEORY

An original owner is one who mixes his or her labor with a thing and, by commingling that labor with the thing, establishes ownership of it. - John Locke

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● John Locke ◦ An original owner is one who mixes his or

her labor with a thing and by commingling that labor with the thing, establishes ownership of it. ◦ The one who expended labor upon

objects could remove them from the common and claim them as private property. ◦ But how much do you value labor?

Labor Theory

PERSONHOOD

A right to personhood property should be given priority over a conflicting claim by the owner of the non-personhood property.

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Margaret Radin ● A right to personhood property should be

given priority over a conflicting claim by the owner of the non-personhood property.

● People are bound up with things. Object that has become part of oneself as against object that is perfectly replaceable

● Someone's relationship with an object may be gauge by the kind of pain that would be occasioned by its loss.

Personhood

● What is important in personhood is a cont inuing character structure encompassing future projects or plans, as well as past events and feelings.

● The general idea of expressing one's character through property.

● Property for personal autonomy – absence of which will hinder liberty attributed to a person

Personhood

● This view of personhood also gives us insight into why protecting people's "expectations" of continuing control over objects seems so important.

● If an object you now control is bound up in your future plans or in your anticipation of your future self, and it is partly these plans for your own continuity that make you a person, then your personhood depends on the realization of these expectations.

Personhood

● Fetishism - A "thing" that someone claims to be bound up with nevertheless should not be treated as personal vis-a-vis other people's claimed rights and interests when there is an objective moral consensus that to be bound up with that category of "thing" is inconsistent with personhood or healthy self-constitution.

Personhood

UTILITARIAN

Property rights is recognized in order to maximize the overall happiness of society

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● Jeremy Bentham ◦ Property rights is defined and

distributed to promote welfare of all and not only of the owners. ◦ i.e. X owning a farmland – of his right

is protected, he can cultivate and harvest produce for consumption. Ownership gave X the security that he needs to use the farm.

Utilitarian

Harold Demsetz (Law and Economics) ● Property rights specify how

persons may be benefited and harmed, and, therefore, who must pay whom to modify the actions taken by persons

● Internalisation of externalities

Utilitarian

● Property rules have developed in response to externalities;

● Externalities are internalize by property owners ◦ i.e. If a single person owns land, he

will attempt to maximize its present value by taking into account alternative future time streams of benefits and costs and selecting that one which he believes will maximize the present value of his privately-owned land rights. !27

Utilitarian

●Property exists to ensure that owners use resources in an efficient manner – that is, in a manner which maximizes economic value defined as a person’s willingness to pay. ●Avoids the “Tragedy of the Commons” ◦ X cuts tree in a communal forest ◦ X gained benefits but the cost is impose on

the others. ◦ Everyone will try to cut trees resulting to

the “tragedy of the commons”

Utilitarian

● Howard Gensler – Three basic features of property law to attain optimal level of production ◦ Universality – all resources must be owned,

i.e. society that excludes minerals is at a disadvantage ◦ Exclusivity – no incentive to improve things,

if there is open access, i.e. free riders ◦ Transferability – trading, i.e. everyone is

stuck with what they have, no gains from trade

Utilitarian

PROPERTY AND DEMOCRACY

Personal security and personal independence from the government are guaranteed in a system in which rights of ownership are protected through public institutions.

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Property and Democracy● The right to a stable system of property rights

one with which the state will interfere only occasionally or in a limited way with a provision for compensation is necessary to democracy.

● The right to own private property has an important and salutary effect on the citizens’ relationship with the state and equally important on their understanding of that relationship.

● A state in which private property does not exist, citizens are dependent on the good will of government officials, almost on a daily basis.

● The best ways to destroy a democratic sys tem i s to ensure that the distribution of wealth and resources is unstable and constantly up for new evaluation by the political process.

● Personal security and personal independence from the government are guaranteed in a system in which rights of ownership are protected through public institutions.

Property and Democracy

Property and DemocracyCass Sunstein – Function of Property ● First, it takes advantage of the powerful

human inclination to bring goods and services to oneself and to people one cares about. A system without private property stifles incentives and thus induces both sloth and waste.

● Second, it performs a crucial coordinating function. It ensures that the multiple desires of hundreds, thousands, or millions of consumers will be reflected in market out- comes.

Property and DemocracyCass Sunstein – Function of Property ● Third, it solves, all at once, a serious collective

action problem faced by people in any system without that institution. When property is unowned, no one has a sufficient incentive to use it to its full advantage or to protect it against exploitation.

● Finally, it creates the kind of stability and protect ion of expectat ions that are preconditions for investment and initiative, from both international and domestic sources.

● Effective way of managing resources; ◦ The property strategy for resource management is

to delegate near dictatorial powers over particular resources to individual owner-manage, which powers are then backed up by the authority of the state; ◦ Decentralization of resources - permits owners to

specialize in developing the knowledge and skills pertinent to their particular resources ◦ More stable and requires fewer expenditures as

against might is right

Property as an Institution


● Provides incentives for persons to make investments and engage in effective management of the resources they control; ◦ Owner reap what he has sown ◦ Other forms of resources management

provides no assurance that those who put in effort to improve the resource will be able to appropriate the fruits of their efforts.


● Facilitates the making of contracts regarding the use and control of resources. ◦ Necessary to know who controls what

resources and hence who may contract with respect to hose resources. ◦ Exchange of property rights ◦ Modifying the use of property


● Important source of individual autonomy ◦ Provides material means for individuals to

achieve a degree of independence from others

● Important to the preservation of liberty ◦ It is a form of personal sovereignty ◦ Countervails the power of the state


● Division of things into small units loose control;

● Use of property in ways that have spillover effects for the owners of other properties – Negative externalities

● May lead to Monopoly ◦ Every property right is a monopoly right;

● Commodification of values and social relations

● Promotes inequality

PROPERTY AS LAW

In its strict sense, property signifies that dominion or indefinite right of user, control and disposition which one may lawfully exercise over particular things or objects (63 Am Jur 2d).

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Property as a Legal Concept● Our property law system is based on the

concept that property is a human invention, not the result of a divine gift or natural right. ◦ Natural Law Theory - certain rights naturally

exist as a matter of fundamental justice regardless of government action - has little impact on modern property law. ◦ Legal Positivism - Property exists only to the

extent that it is recognized by the government. Jeremy Bentham - “Before laws were made there was no property, take away laws and property ceases”

Property as a Legal Concept

● Property rights is composed of certain constituent elements (Bundle of Rights), namely: • The right to exclude • T h e r i g h t o f u s e a n d

enjoyment • The right to transfer or to

dispose

Right to Exclude● William Blackstone ◦ The sole and despotic dominion which one

man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe;

● The duty of the other members of society to keep off, to respect such right, unless the owner has given permission or use the thing in question.

Right to Exclude

● Advantage of starting with the right to exclude is this permits us to protect a wide range of interests in use without requiring others to know much about those uses.

● S imp le exc lus ion s t ra teg y - Gatekeeper’s right the owner can select among those uses without the law having to spell out all potential use-rights or interest at all;

Right to Exclude

Larissa Katz, 2008 ● What we mean when we say that

ownership is exclusive is that owners have a right to exclude and that the right to exclude has a certain effect: the indirect creation of the space within which the owner’s liberty to pursue projects of her choosing is preserved.

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Bundle of Rights

John R. Commons, The Distribution of Wealth (1893) ● Property is, not a single absolute right,

but a “bundle of rights”. The different rights which compose it may be distributed among individuals and society— some are public and some private, some definite, and there is one that is indefinite.

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Bundle of Rights

● Partial rights are definite. Full rights are the indefinite residuum. ... The first definite right to be deducted from the total right of property is the public right of eminent domain.

● It is merely a definite restriction upon the unlimited control which belongs to the individual.

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Ronal Coase, (1960) ● We may speak of a person owning

land and using it as a factor of production but what the land-owner in fact possesses is the right to carry out a circumscribed list of actions.

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Bundle of Rights

● Rules on particular use arise when there is a major resource conflict, i.e. easement, nuisance and zoning

● Reconfiguration of property rights

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Exclusion to Governance

Exclusion to Governance

● The law shifts from giving the owner dictatorial control over who and what to exclude (or include), and instead seeks to prescribe rules about permissible and impermissible uses that constrain all relevantly situated owners.

● Exclusion is shading off into governance.

Property as Things

● Property rights pertains directly on things, rather than people, it is in rem ◦ In rem - the right attaches to the object,

rather to particular people, it is universally binding on all who encounter the object. ◦ Quieting - binds all conceivable claimants

whether or not they have participated in the proceedings;

Types of Ownership

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Ownership Access Management

Private Private By Owner Private

Common Group By Joint-Owners By Joint-Owners

Public State State State

Open Access No One Uncontrolled None

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Right to Exclude Art. 429 (general) Art. 430 (fence)

Right to Dispose!Art. 428

Self-help: actual or threatened, unlawful physical invation or

usurpation

Right to Fence without detriments to

constituted servitudes

Villafuerte vs. Court of Appeals (2005) - lease expired, property enclosed by fence; violates procedure

Right to Enjoy (Jus Untendi)

Arts. 428, 437, 438, 440

Jus Fruendi - right to the fruits

Jus Abutendi - right to consume

Jus Possidendi - right to possess

Ownership - over rights and things

People vs. Goya (1965) Warehouse - must be couple with an attack on the person

People vs. Narvaez (1983) - incomplete defense of property; attack is disproportionate


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Extent Ownership on Land

Art. 437 !Surface and everything under it. Can excavate, construct or plant subject to servitude, special laws and ordinance and aerial navigation

Art. 438!Hidden Treasures - belongs to the owner of the land, building, on which it is found!Found on property of another or the state - 1/2

Republic vs. Court of Appeals (160 SCRA 228)

Jose dela Rosa land registration vs Benguet Consolidated Bog Wedge Corporation Mining Claim Patent remove it from the public domain/dela Rosa - asserts ownership only on the surface

NPC vs. Ibrahin (2007) NAPOCOR Tunnel 1978; discovered in 1992 application for deep well; NAPOCOR - utility and convenience/no interference

Treasure Hunting National Museum Act of 1998 Permit for treasure hunting National Museum Determines PL - 75-25/Prvt Land 30-70/shipwreck 50-50


Accion Publiciana - lapse of 1 year

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RIGHT OF VINDICATION !Article 428 (right of action par. 2) Art. 432 (damages/interference)

Accion Interdictal - forcible entry and unlawful

detainer

Accion Reinvidicatoria - ownership; claim of title

Replevin

Presumption - disputable presumption given to possessor (ART 433/539) - in action to recover, plaintiff must rely on the strength of his title (ART 434)

Co-Ownership

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Right to Exclude Right to Use Right to Transfer

Art. 486. In accordance with the purpose Art 492 Administration through majority with resort to court; controlling interest Art. 500. Mutual accounting at the end of co-ownership

Preservation (Art. 488) Repairs (Art 489) Embellishment and Improvement (Art. 489) Alteration (Art. 491) Buildings (Art. 490)

Art. 493. May alienate, assign, mortgage, substitute another person in its enjoyment; except personal rights are involved. Art. 493. In alienation limited to the portion which may be allotted to him in the division.

Art. 487. Anyone of the co-owners may bring an action in ejectment. -Trespass, interference, prevents persons outside the co-ownership from using the property

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Limitations on Ownership

Police Power !(Art. 436)

Eminent Domain!(Art. 435)

Taxation

• Mere regulation or restriction;

• No taking; • No recovery; • Basis is General

Welfare • There is taking; and Just Compensation

• Property must be for public use or public purpose

• Inherent power of the State to raise revenue to support its existence

• Must not be arbitrary


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Injurious Use (Art. 431)

Interference with the use of other’s

property (Art. 432)

Article 19. NCC “Every person must, in the exercise of of his rights..give everyone his due, act with justice, honesty and good faith” Article XII, Section 6. The use of property bears a social function; economic agent shall contribute to the common good.

Exception: State of necessity 1. An actual or imminent danger; 2. Interference is necessary to avert such danger 3. The threatened damage compared to the attending interference is much greater

People vs. Rebutado The state of necessity must not be brought about by the intentional provocation of the invoking party

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Conditions imposed by law / the owner: 1. Easements; 2. Extravagance; 3. Restrictions on Land Grants

Limitation impose by the owner a. at the time he transmit the property b. at the time he continues to be the owner of the property Art. 494 and 870 (donor prohibit partition/alienation for 20 years)

Leal vs. Court of Appeals - prohibitions that is indefinite as to time; that it may be applicable beyond the lifetime of the original parties, is a nullity Deed of Restrictions

Bel Air Village, Inc. vs. Dionisio - affirm the rule that automatic membership/abide rules and regulations - is a valid restraint on ones ownership = interest of sanitation, security and general welfare

Cariday Investment Corporation vs. CA Forbes Park Restriction - one single family residential building; 2 meters easement; 50 years is a valid restriction, reason “overcrowding, pressure on common facilities;


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Merry Christmas ……… to be continued next year

Property Keynote.pdf

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