Introduction

There are a number of ways in which titles to, and interests in, things can be acquired and lost, apart from by express grant or transfer. Titles and interests can arise by implication of law, for example by estoppel or via a resulting or constructive trust or through the presumed intentions of the parties, as briefly noted in Chapter 8. Also, titles and interests can automatically pass from one person to another by operation of law, for example on death or bankruptcy, again as we saw in Chapter 8. In this chapter, we concentrate on another way in which interests can arise without an express grant, namely, by long user.

An interest in someone else's property can be acquired by prescription, a process which involves using someone else's property in a particular way for a sufficiently long period. The process applies not just to private property rights (notably easements and profits) but also to communal property rights, and public rights such as (but not confined to) public rights of way.

The process of acquiring a right like this by long use has obvious similarities with the process of eliminating a rival title by adverse possession but, as we see below, there are important differences between the two.

The nature and function of security

Nature of security

A security interest is a proprietary interest in an asset owned by someone else, which is held only as security for the payment of a debt or performance of an obligation, in the sense that, as soon as the debt is repaid or the obligation is performed, the security interest ends.

Terminology problems

As we see below, there are four main types of security interest in English law: the mortgage, the charge, the pledge or pawn, and the lien. These are four quite distinct categories and they have different characteristics. The terminology, however, is not always strictly applied. In particular, the terms ‘mortgage’ and ‘charge’ are sometimes used interchangeably, and both are sometimes used as generic terms referring to any type of security interest. To compound the confusion, the only type of legal security interest that can now be created over an interest in land – the ‘charge by way of legal mortgage’ – is a statutorily created hybrid of the first and second categories, borrowing characteristics from both.

Another terminological oddity is that the lay terms used to describe secured transactions give a wholly inaccurate description of the technical nature of the transaction. In lay terms, aspiring property owners ‘get’ a mortgage (a valuable commodity) from a bank or building society (which is in the business of ‘offering’ mortgages to borrowers), and the bank or building society may then allow the owners to ‘keep’ the mortgage when they move house.

What we mean by ‘title’

Like many property law terms, the word ‘title’ is used in a number of different senses. It is often used loosely to refer to someone's right or interest in a thing, but it also has a number of technical meanings. For example, it can be used to refer not to a person's proprietary interest in a thing, but to their entitlement to that interest as against another person. As Professor Goode explains in Commercial Law at pp. 52–4:

This is the sense in which the word ‘title’ will be used here. In this jurisdiction it is particularly important to be able to distinguish a person's entitlement to an interest from the interest itself because our system is primarily concerned with relativity of title rather than with absolute title. In other words, when a person claims to be entitled to a particular interest in a thing, it is usually sufficient for him to prove that his entitlement, or title, to the interest is better than that of the person disputing his claim: it is rarely necessary for him to prove absolute entitlement.

For reasons which will become apparent, it is possible for two or more people to have titles to the same interest in a thing.

Property law tends to be regarded by students as both dull and difficult. The main objective of this book is to demonstrate that it is neither. The book is based on the Property Law seminars we devised and taught in the Faculty of Laws at University College London. Like the seminar course, the book looks at the nature and function of property rights in resources ranging from land to goods and intangibles, and provides a detailed analytical exposition of the content, function and effect of the property rules which regulate our use of these resources, and the fundamental principles which underpin their structure.

We draw on a wide range of materials on property rights in general and our property law system in particular, including core legal source materials on selected topics as well as readings from social science literature, legal theory and economics. Inevitably the coverage is not comprehensive, but we have included notes, questions and suggestions for further reading to provide a starting point for anyone wanting to take matters further. As in any other property law book, we draw on a lot of material from decided cases, but to keep the book at a manageable length we have put most of the edited case extracts we use, together with some other materials, on the associated website, www.cambridge.org/propertylaw/ rather than in the book itself. This has enabled us to use much longer extracts than would otherwise have been feasible, and also to introduce a much wider range of materials.

Introduction

One of the distinctive features of English property law is that it can accommodate a wide range of property interests subsisting in the same thing at the same time, each held by a different person. As we pointed out in Chapter 6, in our system property is not synonymous with ownership. The rights and obligations which Honoré described as the attributes of ‘the full liberal concept of ownership’ need not all be held by the same person at the same time. They may be shared between and distributed among any number of different people in a number of different ways.

However, this fragmentation of ownership is highly systematised. While an owner can by contract give any person a personal right to exercise any of his ownership-type rights and obligations in any way, for any purpose and for any length of time, there are only strictly limited ways in which ownership-type rights can be subdivided and redistributed so as to leave each right holder or group of holders with a distinct property interest, as opposed to merely personal rights against the grantor. This results in a formalised structure of interdependent property interests, which is what we will be examining in this chapter. In Chapter 9, we then look at the gateways to this structure by considering why it is regulated in the way that it is – i.e. why we limit the range of property interests recognised in our system in the way that we do – and when and how the structure can be modified so as to give proprietary status to novel rights, or to novel regroupings of established rights.

Introduction

In Chapter 1 we provisionally described property law as being about the legal relationships we have with each other in respect of things. We now need to clarify and refine this.

Property as a relationship and as a thing

First, a terminological point. The term ‘property’ can be used to describe three different aspects of the relationship between people and things. Consider the statement ‘I have a right enforceable against you in respect of this car’. ‘Property’ can be used as an adjective to describe the nature of the right I have in the car (as in ‘I have a property right in the car, not just a personal right’). Equally, where you and I have a continuing relationship in respect of the car (perhaps I lent it to you, giving rise to the relationship of bailment between us), the term ‘property’ can be used, again as an adjective but this time to explain the nature of the relationship (as in ‘bailment is a property relationship’). Finally, ‘property’ can be used as a noun to denote the thing itself. So, to change the example, if I rent a flat from you, it is terminologically acceptable to say that both you and I have property rights in the flat, and that the lease relationship between us is a property relationship, and that the flat is the property in which each of us has rights.

The use of the term ‘property’ to denote the thing is sometimes frowned upon.

The nature of possession

Introduction

‘Possession’ can be described as the intentional exclusive physical control of a thing. A person who takes physical control of land or goods, with the intention of excluding all others from it or them, acquires possession of it or them as a matter of law. This is the case even if the taking of control was unlawful. So, if a thief steals your book or a squatter moves into your house, possession passes from you to her as a matter of fact and as a matter of law (although it has to be said that the courts have not always been happy to accept this: see section 7.4.1 below). Of course, this unlawful removal of possession from you does not affect your right to possession – you remain entitled to take possession back for yourself (subject to the public order safeguards considered in section 7.4 below) or to ask the court to put you back in possession and/or order appropriate compensation. The fact remains, however, that until you take such a step the taker/squatter is in law in possession.

In Chapter 2, we considered why a legal system might want to adopt such a rule. In this chapter, we look more closely at what amounts to possession, how it fits into the legal taxonomy of property interests, and how it can be acquired, transmitted, lost and regained, as well as at the broader implications of the basic rule that possession confers entitlement.

Introduction: general and specific justifications

In Property Rights: Philosophic Foundations, Lawrence Becker draws a distinction between general justification for property rights (‘why should there ever be any property rights at all?’) and specific justification (‘what sorts of people should own what sorts of things and under what conditions?’).

In general, we consider general justification in this chapter and specific justification in Chapter 4. However, it is not possible to keep the two wholly separate. If you take an economist's view of property, the question of general justification is viewed as a question of the functions that property rights perform. This, however, quickly develops into arguments about what type of property ownership (private, communal or state ownership) best fulfils these functions. This inevitably dictates, to some extent at least, who should have what sorts of interest in what sorts of thing. We deal with both issues in section 3.2 of this chapter.

John Locke approaches the question of general justification from a different angle. In Private Ownership, James Grunebaum points out that property ‘rights’ necessarily entail exclusion, and in Chapter 2 we see that this is what marks limited access communal property and private property off from no-property and open access communal property. If no-property or open access communal property is reduced either to private ownership or to limited access communal property this necessarily results in a curtailment of everyone else's privilege or liberty to use that resource.

The nature of ownership

The basis of ownership

As a working definition we may regard ownership as the ultimate property interest and the means by which we signify the person or persons with primary (but not necessarily exclusive) control of a thing. Such a definition requires us to separate the notions of ownership and property while acknowledging that the terms are often used, somewhat loosely, as synonyms. Property is a broad term which encompasses any interest in a thing whereby the interest holder acquires rights enforceable beyond the original parties to the transaction (or other means) by which the interest was acquired. Thus the term property extends to a range of diverse interests such as easements (such as a right of way over land) and choses in action (such as the benefit of a contract which is normally assignable and may thus be enforced by someone other than a party to the original contract). In contrast, ownership is a particular type of property interest in which the person designated as owner is deemed, in some sense at least, to have the greatest possible interest in the thing. As a subset of property it is consequently concerned with two quite separate sets of relations. The first is the owner's relationship with other people (whether they be non-interest holders or subsidiary interest holders in the thing owned) and the second is the owner's relationship to the thing itself.

Introduction

In Chapter 3 we dealt with the question of whether it is justifiable to have exclusionary property rights at all. If we accept that the answer is yes, it then becomes necessary to consider who should have such rights, which amounts to Lawrence Becker's question of specific justification outlined in section 3.2 above: ‘What sorts of people should own what sorts of things and under what sorts of conditions?’ This is the subject of this chapter.

Just as when considering the general justification for property rights, it is helpful to start with original acquisition. Most legal systems adopt the first occupancy or first taker rule, i.e. that the law will protect the first taker of a thing. In the case of tangible things, this usually means taking physical control of the thing (technically, possession). Intangible things can also be allocated by a first taking rule, however. For example, an inventor of a process gets exclusive rights to exploit it for a limited period by being the first person to patent it. The patent system is essentially a notice filing system, and such systems can also be used to allocate property to the first taker of tangible assets, where the taking of physical control is not feasible, or disproportionately expensive or exclusionary. Mining rights in the developing American West, for example, were sometimes allocated to the first person to file a claim rather than to the first person to enclose the land containing the mine.

Basic definition

To put it at its simplest, property law is about the legally recognised relationships we have with each other in respect of things. We will want to expand and qualify this statement later – what kinds of relationship, what kinds of thing? – but our starting point is an introduction to the moral, political, social and economic context in which property law operates.

Illustrative example

Consider the following hypothetical situation, a variation of facts which actually occurred in California in 1976 and which became the subject of a celebrated decision of the Supreme Court of California, Moore v. Regents of the University of California, 51 Cal 3d 120; 793 P 2d 479 (1990).

John went into hospital to undergo an exploratory operation to aid diagnosis of unexplained stomach pains he had been suffering. During the course of the operation, Dr A removed tissue from John's stomach lining and stored it so that he could carry out further analysis if his initial diagnosis proved to be incorrect. No further analysis proved necessary: Dr A's initial diagnosis was confirmed, John was successfully treated and made a full recovery, and Dr A gave no further thought to the tissue sample.

By chance, however, it became included in material that Dr B was using in research he was carrying out at the hospital. This material included primary cells (i.e. cells taken directly from the body) taken from a number of different patients in the hospital.