Legal ch 7

Collective owners of a 748 acre tract of land in Texas sued Coastal Oil for infringing on their property rights by removing natural gas from beneath their land which was known as Share 13. Although Salinas already leased Share 13 gas to Coastal, Salinas alleged that Coastal was not extracting the gas fast enough. Salinas claimed that Coastal was drilling on the neighbor's land instead of Salinas' land to avoid paying Salinas a royalty on the gas. According to Salinas, this constituted a trespass because it removed gas that would have otherwise remained after Coastal's lease of Salina's land ended. The court refused to hold Coastal liable for a technical trespass under Salina's land. It determined that the nature of subsurface rights required a showing of some injury. Salinas leased the right to drill on Share 13. The court argued that any losses from gas captured from neighboring land could be addressed by increased drilling on one's own land

Coastal Oil & Gas Corp. v. Garza energy and trust et al

carriers are also not responsible for acts of God or of public enemies, the acts of the bailor in failing to package properly, defects in the packaged object itself, or acts of the public authority

Common carriers

refers to the right we all have to common resources like the air, rivers or oceans. However, this meaning is appropriate only to the extent we can legally exclude others from interfering with our usage of these resources. Sometimes refers to the private ownership by two or more people of a specific resource such as a piece of land

Common property

In one basic legal frame work for property the state itself, represented by a ruler or legislature, makes the major decisions about the production and distribution of resources.The state takes ownership of resources or acquires them through taxation. It also may direct people in how, when, and where to work, thus assuming rights over the resources people have in themselves, their efforts, and talents.Distribution of resources occurs through state planning. What is an example of this type of frame work?

Communism

That means more than one person can own the same thing. The ownership is undivided, meaning that no owner owns a specific piece of the resources

Concurrent Ownership

possession must not be interrupted

Continuous

The defendants John and Diane Sullivan, appeal a decision of the Superior Court finding that they created a nuisance on the plaintiff's property by filling in wetlands and constructing a home on their property. The Sullivan's transformed their property to support a new house, but this had the effect of unreasonably and substantially harming the Cook's property. They did not internalize the costs of their behavior. The water that flooded the Cook's property did not necessarily flow from the Sullivan's property. If it had, the water might have constituted a trespass rather than a nuisance. If the Sullivan's had provided the court with another option other than moving their house, the balance of hardships might have come out differently

Cook v. Sullivan

laws protect the investment resources of corporate owners, or shareholders. These laws define the authority and responsibility of the board of directors, who are elected by the shareholders. This also includes those laws that protect the resources of others from harm by the corporation. Such laws include anti-trust laws, employment discrimination and employee protection laws, environmental protection laws, and a great many antifraud laws

Corporate governance

similar to mortgages. A borrower signs a note, which shoes the borrower's debt to the lender, and then sighs a deed of trust, which grants the lender a security interest in the building and land put up to secure the loan. The deed is held by a third party called a trustee who holds full legal ownership, or title, only when the deed has been repaid.

Deeds of trust

you can have police or courts keep someone from interfering with what is yours

Excluding others from your resources

Bailments fall into three categories:

For the sole benefit of the bailor, For the sole benefit of the bailee,For the mutual benefit of both parties

Ghen shot the whale with new technology, a bomb lance. Left marking on whale identifying it as his -- trademark?Custom is that when the whale washes up on the beach, the finder contacts the owner and is compensated finder fees. Whale washes up on beach and Rich takes custody. Advertised and sold whale to Ghen without knowing his prior ownership. Ghen discovers the whale was his and sues for damages. Swift v. Gifford limited to fishing. Possession is acquired when the hunter kills the wild animal - upholds Pierson v. Post. If fisherman does all possible to make the animal his own - actions are sufficient to establish ownership

Ghen v. Rich (1888 Mass)

Challenge by closely held private corporation to Obamacare contraception mandate upheld 5/4. Majority decided on RFRA grounds; not on 1st Amendment Free Exercise grounds. First time corporation's religious rights recognized. Applies only to federal law since federal RFRA application to state laws stricken in City of Boerne

Hobby Lobby v. Burwell

This act allowed those who lived on a certain public land to obtain legal ownership of it by possessing it for five years and making certain improvements

Homestead Act of 1862

The Huy Fong Foods factory in Irwindale, California makes a very popular hot sauce called Sriracha. The factory contributes a strong odor that residents complained of sore throats, nosebleeds and burning eyes. In 2014 the city council declared the factory a "public nuisance" and gave the city the power to shut down the plant pending trial on the issue

Hot Sauce of fresh air?

applies to nonphysical things, particularly various types of valuable information

Intangible property

patents, copyrights, trademarks and trade secrets is an important form of intangible property

Intellectual property

when people borrow money from a bank or financial institution and in return give that creditor a security interest on their homes and the land associated with their homes

Mortgages

the possessor must occupy the land in such a way as to put the true owner of the land on notice

Open and notorious

resources refer to what comes from you, like your work and expressions

Originally possessed

Post spent time with his dogs and hunting party pursing a fox. Pierson killed the fox and took it for himself. Who gets possession of the fox - pelt/carcass. Case of first impression- no precedent. Establish principle on how property can first become possessed by a human. Creation of property. Can you earn right to a wild animal just by chasing it?Which ruling leads to more dead foxes?Pursuit and wounding does not create a legal right. Ruling in favor of Pierson, he gets to keep the fox

Pierson v. Post (1805 NY)

Scope of ownership over a valuable baseball acquired during a Major League game. Barry Bonds hit a home run making the baseball have a value ~ 1.5 mil. Ball flew into stands and was caught by Popov. Attacked by third party individuals and he dropped the ball. Hayashi was also knocked to ground and grabbed ball when it rolled towards him - legally. Precedent is that ball is owned by MLB and after hit is intentionally abandoned property, whoever possesses first is rightful owner. Court concluded that both parties had a right to ownership - decided on Equitable distribution, selling the ball and splitting the proceeds evenly. At this point $ ended up only going towards legal fees

Popov v. Hayashi

a type of legal fence that surrounds and protects resources the law recognizes as belonging to you

Property

the legal right to exclude others from resources that are originally possessed or are acquired without force, theft, or fraud

Property

include anything that someone may need or want. This includes land, widgets, and other physical things, but it also includes the uses of those things

Resources

This case arises out of the alleged loan by the plaintiff of seven pieces of sculpture to the defendant WCAC which allegedly was controlled and operated by the defendant Wooster school. The plaintiff has alleged that the defendants Wooster School and ECAC willingly took possession of seven of the plaintiff's outdoor sculptures and displayed them in plain view on its campus. The plaintiff further alleges that when she asked for the return of the seven sculptures that three were missing and the one had been damaged. The plaintiff alleges that the defendants failed to redeliver all of the seven sculptures to her at her request.. and are therefore liable for the full value of the missing/ damaged sculptures. The court determines that the bailment is one of the mutual benefit because both parties gained from the transaction. The school received the cultural enhancement of the sculpture and the artist received the exposure. In a mutual benefit context, the bailee owes a reasonable care to the bailor. A presumption arises against the bailee if the property is damaged in its care

Semoon v. the Wooster School Corp

A landowner may also own the liquids, gases, and minerals beneath the land. Like air rights, an owner may be able to separate subsurface rights and sell them

Subsurface Rights

Gifford is whale hunting on his boat, the rainbow, using harpoons and had a long line attached, so that it could not get away. Swift's boat came along and shot its own harpoon into the whale and was first to take possession. Which ruling leads to more dead whales? "first iron holds the whale" customary for whale hunting industry. As long as ropes from the first harpoon are still in place that person gets custody of the whale Judge decides to hold up the industry standard, siding with Gifford. Decision goes against precedent decided by Pierson v. Post

Swift v. Gifford (1872 Mass)

applies to things one can touch, that is, physical things.

Tangible property

Challenge to FAA registration requirements for drones, stating that FAA registration for hobbyist is illegal

Taylor v. Huerta (DC Cir. 2017)

one that is made through a will. the rules of such a gift pass ownership not by delivery but upon the death of the donor (testator) and the proving of a valid will specifies the gift

Testamentary gift

KFC has one of the most well-known trade secrets the recipe. Couple (Mr. and Mrs. Settles) buys Kernel Sanders house and found the recipe and called KFC and told them and a bunch of lawyers showed up at their house. Trade secret law doesn't protect you from innocent people finding out your secrets. Later the descendent of Kernel sanders let a reporter see some passed down documents and the recipe was on the back of the will and snapped a picture and tested it and published. Other trade secrets, market research, labor costs, research and development, financial statements (if you don't have investors you don't have to share), suppliers, customer base. Trade secret is anything that is proprietary to that company and gives you a competitive advantage, and is secret from the public. Uniform trade secret act- makes it commercial espionage criminal but does not protect against secrets coming out by accident also protects against civil. Patents help protect trade secrets but they expire after 20 years. Make your employs sign a Non-disclosure act, you have to be specific enough so employee knows what is a trade secret, you don't want to be too specific for those who don't sign it

The Settler's vs. KFC

has no limitations or conditions attached

The fee simple absolute estate

may have a condition attached to its conveyance (transfer)

The fee simple defeasible

Causby was a small farmer and aircrafts were flying 83 feet over his property. He was a chicken farmer and said the noise was not only annoying but that it literally scared his chickens to death. Nuisance factor, and the takings clause ( he didn't receive just compensation). He won, but didn't state how high up air rights go

US v. Causby

you have a reasonable expectation of privacy

US v. Katz

The sale of tangible things, also known as "goods" is controlled by

Uniform Commercial Code

means basically that if we illegally take away what belongs to others, we lack the protection of the legal fence regarding those resources

Without force, theft, or fraud

are generally laws that divide counties or municipalities into use districts designated residential, commercial, or industrial.

Zoning ordinances

a security interest that secures the purchase price of goods bought for personal and household use and is perfected by attachment alone

a purchase money security interest (PMSI)

Before the actual foreclosure, most states allow the mortgagor to get back the land upon payment of the full amount of debt, including all interest and costs.

a right of redemption

When a bailee uses an object in a way not authorized or prohibited by the bailor, the bailee becomes

absolutely liable

property the debtor gains in the future

after-acquired property

Some states however, have passed statutes, that prevent mortgagees from obtaining anything else from mortgagors once the land has been foreclosed and auctioned.

antideficiency judgement statues

You take your car to the garage for a new transmission but when the work is complete the credit card company refuses to extend additional credit, meaning your limit has been reached. You are unable to pay the garage for its materials and labor. The garage can legally refuse to release your car until you have paid it. This is because the garage has an

artisan's lien

a narrow property interest that arise when someone who contributes parts and/or services to an object of personal property is not paid

artisan's lien

A security interest arises when it

attaches

takes place when 1) a secured party has given value 2) the debtor owns the collateral and 3) a security agreement is given

attachment

Therefore, the law presumes that the bailee has breached the duty of care when the bailee cannot return the object to the bailor in proper condition, placing the burden of proof on the______ to prove that he or she has met the duty of care

bailee

the possessor of the object in a bailment

bailee

In many common situations, an owner puts an object protected by personal property into the intentional possession of another person with the understanding that the other person must return the object at some point or otherwise dispose of it. This property arrangement is known as

bailment

the owner in a bailment

bailor

if the builder accidentally picked up someone else's engine and builds it into an airplane, a court will probably give ownership of the airplane to the

builder (requiring only that the builder adequately compensate the engine's original owner) (unless the engine is WAY more valuable)

Bailees are often able to limit their potential liability to bailors for damage to the bailed objects, for example

by inserting contractual terms that limit compensation to a certain value

the quality of resources that produces new or different resources

capital formation

A secured transaction involves a creditor who has sold something on credit or made a loan to a debtor who agrees to give the creditor a security interest in a valuable object, called

collateral

The shareholders of a corporation are

concurrent owners

like turning over the keys to a car or the deed to land, constitutes an adequate delivery

constructive delivery

The rules under which people exchange resources in a property system are called the rules of

contract

These rules also make it possible for one owner to sue another if agreements to exchange resources in the future are broken by one of the owners.

contract rules

make agreements to exchange resources between owners legally binding and enforceable and make it possible for owners to commit legally to future exchange of resources

contract rules

is the document of title that transfers ownership of land. This contains a precise legal description of the land that specifies the exact location and boundaries according to a mapping or surveying system

deed

In many states, if foreclosure and auction do not produce enough money to satisfy the debt owed by the mortgagor, the creditor-mortgagee can still sue the debtor for the balance owed called a

deficiency

a landlowrf may lease land for two years

definite duration of time

also relates to capital formation and refers to how property permits resources to be broken into parts and used in many ways while the owner still retains a property interest in each part

divisibility

When the owner of an old airplane engine has it restored and has an airplane built around it, the owner of the engine now owns the entire airplane through the

doctrine of accession

The owners themselves, or the creditors, of a joint tenancy or tenancy in common can usually force the separation of these concurrent ownerships under the

doctrine of pardon

Unmanned aerial systems(UAS

drones

Once this has been acquired, the timbering company can exclude others, especially the title holder of the land, from interfering with the passage of its trucks across the land.

easement

can also involve such uses as the laying of water pipes or the stringing of power wires across land

easement

places a particular use of land behind the exclusive legal fence. Usually this involves the right of passage across the land

easement

arises when one person has used another's land, such as by crossing it openly, wrongfully, and continuously for a period of years (frequently 20) and once this arises, a title holder of the land can no longer prevent a person from continuing to use the land by crossing it. The titleholder cannot now use the land in such a way to legally exclude a titleholder from trying to prevent passage

easement by prescription

The bundle of rights and powers of land ownership are called

estate

represents the maximum estate allowed under the law, the owner having the fullest legal rights and powers to possess, use, and transfer the land

fee simple

The general way of perfecting a security interest under Article 9 is to file a

financing statement

are appropriate to perfect any type of collateral except negotiable ones, which can always be transferred free of a secured creditor's claim unless they are kept in the creditor's possession

financing statement

expire five years after the date of filing unless a maturity date is stated and are usually filed in the county where the collateral is located or with an office of the state government, depending on the state and the type of collateral

financing statement

should contain the names and addresses of the creditor and debtor, a reasonable description of the collateral, and the signature of debtor.

financing statement

is an object of personal property that has become an object of real property 1) by physical annexation (attachment) to the land or its buildings or 2) because its use has become closely associated with the use to which the land is put

fixture

most states specify an adverse possession of between 10-20 years before the possessor becomes the new owner

for a prescribed period of time

is the term used for the exercise of the secured property interest, and this usually means that the creditor must go through the court system to ensure that procedures are properly followed before debtors lose their homes and land

foreclosure

means that the court will order the land sold to satisfy the debt owed, usually by auction to the highest bidder, with any excess after payment of what is owed to the secured creditor going to the debtor

foreclosure

goods that are identical

fungible goods

Ownership through confusion arises when

fungible goods are mixed together

Reversion and remainder property interests are also called

future interests

no mutual exchange of resources occurs.

gift

the easiest to destroy a claim of adverse possession is to

give permission for someone to occupy for a period of time

If the court determines that the confusion was intentionally wrongful, perhaps done by someone willfully attempting to defraud another, the court will

grant ownership of the entire confused mass to the innocent party

Property greatly promotes

incentive

A landlord may lease with rent payable at periodic intervals like money, or at will

indefinite duration

the property interest is undivided, but tenants must have equal ownership of shares (1/2 and 1/2)

joint tendency

Other forms of concurrent ownership include

joint tendency and the tenancy in common

is also known as real estate or realty

land ownership

the owner of land sells it by contact subject to the condition that the seller retains the title to the land until the buyer pays the purchase price. Until that time, the buyer has the legal right to possess and use the land and is responsible for paying taxes and insurance

land sales contract

also explains that when you apply your efforts or ingenuity to any raw materials you own and change their nature into finished products, you own the finished products

law of accession

Article 9 contains the

law of secured transactions

is simply the property right granted to tenants by a landlord. Tenants have a qualified possession, use, and transfer of the land, qualified in that they cannot waste the land, which means to do something that substantially reduces the value of the land. Unless prohibited by the lease, the rights owned by tenants can be capitalized by transfer to someone else

leasehold estate

grants an ownership in land for the lifetime of a specified person. Upon death of the person the land reverts to the original grantor who is said to keep a reversion interest in the land

life estate

The finder of a _____ item becomes its owner by reducing it to possession and following a statutory procedure, which may require the finder to turn the item over to the police and to advertise it in a local paper for a period of time to allow the original owner to claim it. But at the end of the specified statutory period, the finder becomes the new owner

lost

arises when someone contributes materials and/or services to real estate, usually a building, and is not paid. Unlike the artisan's lien, this lien is not possessory and has priority only if it is perfected by the filing of a written notice, usually in the county where the real estate is found

mechanic's lien

the creditors under a mortgage

mortgagees

The two principle types of security interests are

mortgages and secured transactions

the debtors under a mortgage

mortgagors

In a ____________________________, the bailee is under a duty to use "reasonable care" in taking care of the object in possession, but if an Act of God destroys or damages the object, the bailee is not likely liable to the bailor

mutual benefit bailment

At common law owners of land had this to get from their land to the nearest public road

natural easement (easement by necessity)

means that an adjoining landowner cannot do anything that would cause the land on your side to collapse

negative easement

Zoning ordinances allow uses of land that existed prior to the passage of the ordinances. Such uses are called

nonconforming uses

two basic legal frame works for property

one which the state makes all the decisions (ex. communism) and the property system

things that have been mislaid goes to

owner of the premises it was mislaid on

When an owner transfers ownership, the owner is said to

pass title

In a mutual benefit bailment, the bailor must

pay the bailee

As soon as the security interest attaches it is effective against the debtor, but to be effective against third parties, such as other creditors and people to whom the collateral may be sold and transferred, the secured party must

perfect the security interest

arises when a security interest has attached and the creditor has taken all proper steps required by Article 9

perfection

applies to movable resources, those things that people do not annex to the land.

personal property

An artisan's lien is

possessory

meaning that generally the lien has priority only as long as the creditor keeps possession of the collateral.

possessory

the life estate is a

present interest

Any unreasonable use of one's property so as to cause substantial interference with the enjoyment or use of another's land establishes a common law

private nuisance

protects private persons and allows them to exclude others, including in most instances the state from interfering with resources that are acquired without force, theft or fraud

private property

we just call "property"- is a system of law under which the state recognizes and enforces an individual's rights to acquire, possess, use, and transfer scare resources

private property

three main uses of property

private, public and common

the right to exclude

property

the state does not plan what people should have nor does it acquire and redistribute resources to them rather people determine how resources are distributed through voluntary exchange, usually for money that they will use to acquire other resources they need or want. The role of the state is to recognize legally when people have exclusive property rights in scarce resources and to allow them to enforce their rights through legal institutions like courts

property system

If the confusion occurs by honest mistake or agreement, the owners of the originally separate goods now own

proportional share

There are two types of nuisance

public and private

is one arising from some use of land that causes inconvenience or damage to the public. These claims may be brought only by a public official, not private individuals, unless the latter have suffers some special damage to their property as a result of the public nuisance

public nuisance

refers to the states right under various circumstances to exclude people from state monuments, buildings, equipment, land and other public resources

public property

makes no guarantees other than that the grantor surrenders all claim against the land.

quitclaim deed

two basic legal devisions of property

real and personal

applies ownership to land and interests in land such as mining rights or leases

real property law

If the land goes to someone other than the grantor upon their death, that person has a

remainder interest

joint tenants (but not tenants in common) can have the

right of survivorship

means that if one of the joint tenants dies, the remaining tenant becomes the sole owner of the entire resource

right of survivorship

perpetuities limits all exercise of property over resources to a duration of "lives in being plus twenty-one years" The rule prevents an owner from controlling resources through many future generations by setting up trust arrangements under which trustees are legally required to carry out the wishes of the owner for an extended duration. As it is, a trust may not extend the control of an owner beyond twenty-one years of the death of someone who is alive at the time of the owner's death

rule against perpetuities

Should the owner of an adjacent property be permitted to drill and extract fluids and gases that flow from underneath another's property? yes because of the

rule of capture

is that the first person to reduce previously unowned things to possession becomes the owner

rule of first possession

must be in writing, signed by the debtor, and contain a reasonable description of the collateral

security agreement

in a bailment for the ______________________, the bailee owes a very high duty of care, one that is greater than merely what is reasonable

sole benefit of the bailee

In a bailment for the __________________________, the bailee owes only a slight duty of care while the object is in the bailee's possession

sole benefit of the bailor

specifies that certain legal claims against the land, like mortgages exist but guarantees that no other claims exist

special warranty deed

In a property-based legal system resources can be highly divisible. Importantly they are divisible both in

specific type and by time

Perhaps the most common way to destroy a claim of adverse possession is to

sue for trespass.

The law divides personal property into

tangible and intangible resources

the property interest is undivided, but the tenets in common can own different shares of the resource (2/3 and 1/3)

tenancy in common

when someone has abandoned what they own,

the first person to reduce it to possession owns it.

In English common law, as famously articulated by Lord Coke more than 300 years ago, ownership in land was understood to extend from

the heavens and back down to the center of the earth

Ownership is frequently referred to by the term

title

right to use land but do not own it

usufruct

promises the grantee (usually the buyer) that the grantor (seller) has food ownership and the full power to convey it

warranty deed

the possessor must not have the owner's permission to be on the land, for example on a lease

wrongful

our only president that has filed a patent (balloons on the side of a boat to help escape sand bars)

Abraham Lincoln

the possessor must physically occupy the land. However, the building of a fence around the land or construction of a building on it constitutes as physical occupation

Actual and exclusive

gives you ownership of land (and it only applies to land) under state statue when the possession is open and notorious, actual and exclusive, continuous, wrongful and for a prescribed period of time

Adverse possession

The owner of real property also possesses the air above the land to the extent that the owner can occupy or use it in connection with the land

Air rights

is the principle set of laws controlling security interests in objects of personal property.

Article 9 of the Uniform Commercial Code

When Barry Bond's hit his record-setting 73rd home run ball into the stands of Pacbell park ownership of the ball was abandoned. But who had the right of property in the record setting ball- Alex Popov who initially appeared to catch it before a wild crowd of fans knocked him to the ground or Patrick Hayashi who saw the ball rolling free and stuck it in his pocket. With the facts unclear, Judge McCarthy ruled that it was fairest to divide the ownership of the ball and that it should be sold and the proceeds divided equally between the parties

Barry Bond's Home-run Ball