Property Law

Right to Possess Use Exclude Others Sale or Gift (Alienate)

1. Occupancy Theory holds that whatever a person takes, should be that person’s property. 2. John Locke’s Labor Theory holds that the fruits of labor belong to the laborer, and no one else.
Pursuit alone of the wild animal on common property is insufficient to give ownership.

Title to a wild animal is acquired when a hunter apprehends the beast in accordance with custom.

Cases in which possession of multiple people is at play (ie A cuts down B’s trees and builds flowerboxes, or C paints with her paint but D’s canvas.)

Landowner has constructive possession of the wild animals that are on said land. Constructive possession: Is not exact ownership. It is a constructed reality. Part of the reason for constructive possession is to keep other people off one’s land.

Ownership of gas and oil, as a natural resource that migrates to different land naturally or unnaturally, has been compared to wild animal ownership in court. This means that it is judged by the “capture” of the resources. If a landowner drills into his own land and taps into your gas, it becomes his, not yours.

Many states in America adopted a reasonable use policy, making wasteful use of water unlawful, but still essentially using a rule of capture. Today, groundwater is commonly governed by legislative and administrative programs.

Allocate according to the first in time rule, aka prior appropriation. The person who first captures the water and puts it to good use has a right superior to later appropriators.

Once a second person starts using water, the first can't increase use to the disadvantage of the second.

They use riparian principles: the owner of land along a water source has a right to use the water, subject to the rights of other riparians. Reasonable uses, even if they do interfere with flow, sometimes are permitted. Household use is always considered reasonable. Irrigation: some states say it is unreasonable, some have more complicated rules.

The old concept. A distribution of property that can’t be changed in a way that makes some people better off without making others worse off.
If an owner is willing to sell at a price a buyer is willing to pay, the former distribution is inefficient because both will be better off after the transaction.

Exists whenever a person makes a decision about how to use resources without taking full account the effects that would result from a particular activity, for example, because they fall on others. They are external to that person. Externalities are, in essence, a function of transaction costs, and they encourage but do not require misuse of resources.

As long as making deals is free, the more efficient user always ends up with the goods.

If effects are in the interest of others and they would offer compensation for the owner to use his land accordingly, transaction costs can be prohibitive if they add up to more than the initial benefit. If they are too high, resources are likely to be misused.

Smoke Stacks: private property does not solve the problem of pollution. Sometimes there are externalities that you cannot internalize. That is when the government needs to step in to regulate maximum numbers of pollution. There is no way to strike a deal between those that suffer these externalities.

Right exercised by all members of the community (ie rights to till and hunt land or to a city sidewalk.)

The community recognizes the right of the owner to exclude others from exercising the owners’ private rights.