Property

Chapter 1
1(A): Acquisition by Discovery
1(B): Acquisition by Capture
 Roadmap
• First Possession:
– Acquisition by Discovery
• M’Intosh v. Johnson
– Acquisition by Capture
• Pierson v. Post
• Ghen v. Rich
• Popov v. Hayashi
• The Rule of Capture applied to other fugitive resources (natural
resources law)
• The Tragedy of the Commons and Economic Theory of
Property
 Mine

Yours Ours
Johnson v. M’Intosh (1823)
 Johnson v. M’Intosh (1823)

• Title: Legal ownership of property

• Chain of title: As land moves to different owners,
a chain of title is established. Links in the chain
are the transactions (conveyances) by which a
parcel of land moves from owner to owner over
time. (More on this in future coverage of the land
transaction).
Disputed chain of title to same parcel of land

Native “Discovery” by English

American
England
s
Colony/Commonwealth
of Virginia

U.S.

Plaintiff
Defendant
 Johnson v. M’Intosh (1823)
• Decision introduces discovery rule, based on first in
time principle
– Discovery rule: title to newly “discovered” lands lay with
the government whose subjects discovered new
territory
– First in time principle: justification for ownership
• First to do what? Possess?
• Here, it means the first Christian/European nation to
“discover” land, not merely occupy it.
• Possession ≠ Ownership
 Johnson v. M’Intosh (1823)
1. Fear of consequences – Pandora’s box
2. Limited power of the judiciary
3. Locke’s labor theory
4. A belief in European cultural/religious right
 Ownership as a “bundle of sticks”
• Ownership is associated with numerous rights
(and responsibilities) and different people may
hold different rights with respect to the same
property.
• Such as: right to possess, to use, to enjoy, to
sell, to donate, to transfer, to encumber, to
maintain, to abandon, to destroy . . .
Pierson v. Post
 Pierson v. Post
• Rule of Capture: mere pursuit is insufficient
for ownership – it requires certain control (i.e.,
possession or “mortal wounding”)

• Majority vs. Dissent – certainty vs. fairness

 Utilitarianism
• Jeremy Bentham
• Whether an action is right or not is dependent
upon the value of its consequences—whether
it is will cause more pleasure than pain.
• Welfare maximization – people should act to
maximize happiness/welfare.
Ghen v. Rich
 Ghen v. Rich
• Holding: Exception to the rule of capture - Where
certain control is not practical, follow the
customary rule.
• Pros of custom as rule of law?
– Already proven to be workable in community
– Promotes autonomy of community members
– Courts lack expertise that community has
• Cons?
– Fails to account for public interest - rule of custom may
only benefit the community whose custom it is.
– May impose negative externalities on others
 Property in animals
• How to determine who has “first possession” of
the wild (living) animals?
– Wild animals on public property  Pierson*; Ghen*
* Modified by statute under modern law
– Wild animals on private property  Ratione soli:
Owner of land considered to have constructive
possession of wild animals while on their land.
 Ratione soli
Your best opportunity to get a free Alaska moose
Popov v. Hayashi
Natural Resources and the Rule of Capture
• Oil & Gas
• Water
– Surface Water
• East – riparian
• West – prior appropriation
– Groundwater

• How well does the rule of capture fit natural

resources?
– How are natural resources like wild animals?
Unlike wild animals?
 Theories of Property
• What is an externality?
• What is the “tragedy of the commons”?
• What are some of the problems associated with
communal property?
– Transaction costs
– Hold-outs
– Free-riding
– Policing costs
• How do we address the tragedy of the commons?
– Private property
– Governance rules
 Tragedy of the Commons
Two versions:
1. Overconsumption: Taking too much of a good
thing out of communal property (ex –
Hardin’s tragedy of overgrazed pasures)
2. Overuse: Putting too much of a bad thing into
communal property (ex - pollution)