!

PROPERTY
LAW

ATTY. ERWIN L.TIAMSON

SATURDAY CLASS
8:00 AM TO 12:00 PM
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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.
Entitlement to resources
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.

Theories on Property
First

Possession
Labor
Personhood
Utilitarian
Democracy

First possession is the root of title - Carol Rose

FIRST POSSESSION

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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

First Possession
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 owners

(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

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

LABOR THEORY

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Labor Theory
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?

A right to personhood property should be given priority

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

PERSONHOOD

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Personhood
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
continuing 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.

Property rights is recognized in order to maximize the

overall happiness of society

UTILITARIAN

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Utilitarian
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 privatelyowned land rights.

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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 persons 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

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

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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.

Property and Democracy

The

best ways to destroy a democratic

s y s t e m i s t o e n s u re t h a t t h e
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

Cass 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 outcomes.

Property and Democracy

Cass 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
protection of expectations that are
preconditions for investment and initiative,
from both international and domestic sources.

Property as an Institution

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.

Property as an Institution
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

Property as an Institution
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

Property as an Institution
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

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).

PROPERTY AS LAW

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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
The right of use and
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.
Simple exclusion strategy Gatekeepers 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 owners 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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Bundle of Rights
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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Exclusion to Governance
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
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
Ownership

Access

Management

Private

Private

By Owner

Private

Common

Group

Public

State

State

State

Open Access

No One

Uncontrolled

None

By Joint-Owners By Joint-Owners

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Ownership - over rights and

things
Jus Fruendi - right to the
fruits

Right to Enjoy
(Jus Untendi)
Arts. 428, 437, 438,
440

Jus Abutendi - right to

consume

Jus Possidendi - right to

possess

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

Self-help: actual or
threatened, unlawful
physical invation or
usurpation
Right to Fence without
detriments to
constituted servitudes

Right to Dispose!
Art. 428

People vs. Goya (1965)

Warehouse - must be
couple with an attack on
the person

Villafuerte vs. Court

of Appeals (2005)
- lease expired,
property enclosed by
fence; violates
procedure
People vs. Narvaez (1983)
- incomplete defense of
property; attack is
disproportionate

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Republic
vs. Court of
Ownership
over
rights
and
Appeals (160 SCRA 228)
Art. 437 !
things Surface and
Jose dela Rosa land

Extent

Ownership on Land

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

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

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
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Ownership - over rights and things

Accion Publiciana - lapse
of 1 year
RIGHT OF
VINDICATION

Accion Interdictal forcible entry and unlawful

detainer

Replevin

Article 428 (right of

action par. 2)

Art. 432 (damages/
interference)

Accion Reinvidicatoria ownership; claim of title

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

Right to Use

Art. 487. Anyone of the

co-owners may bring an
action in ejectment.
-Trespass, interference,
prevents persons
outside the coownership from using
the property

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)

Right to Transfer
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.

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Limitations on Ownership
Police Power !
(Art. 436)

Mere regulation or
restriction;
No taking;
No recovery;
Basis is General
Welfare

Eminent Domain!
(Art. 435)

Taxation

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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Limitations on Ownership
Injurious Use

(Art. 431)

Interference with the

use of others
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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Limitations on Ownership
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)

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

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

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
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