9

The Relativity of Title and Causa Possessionis

Larissa Katz*

It is often said nowadays that to any dispute between those who claim possessory rights in a thing, the common law proposes a clear and simple answer: ‘first in time, stronger in right’.1 Whether the dispute is between a ‘true owner’ and a finder;2 between two finders; between a bailee and a thief; between two thieves; or between any other putative possessors, the same simple rule claims to tell us whose right is superior. This rule is attractive in its simplicity—temporal priority is all that matters when deciding these disputes—but it is also surprising in its disregard for all other possible considerations. Shouldn’t the law care about the type of possessory claims we are concerned with? Doesn’t it matter (for reasons going beyond the temporal priority of his claim) that one party is in possession as the true owner, or only as a thief, etc.? And don’t the prior interactions between the parties matter to the law, as well? For instance, shouldn’t it matter to the law whether or not one party put the other party into possession in the first place? All these considerations seem to have moral salience when considering who should be entitled to possess a thing. It would be odd if the law took no notice of them.

The reason why the ‘first in time, stronger in right’ maxim seems so appealing to many contemporary property lawyers, I argue, is that it is entirely consistent with their understanding of ownership and rights to possess more generally. On the view that currently dominates property law and theory, ownership is simply the right to exclude all others from the owned thing. In this way, it is different only in degree (and not in kind) from other possessory interests.3 For bailees, finders, and even thieves have the right to exclude some others from the things in their possession;

* This chapter was begun while I was an HLA Hart Visiting Fellow in Law & Philosophy, Oxford Centre for Ethics & the Philosophy of Law, Oxford University. I am grateful to CEPL for funding and support. I am grateful too for comments from participants at the Property-Works-in-Progress workshop at Fordham Law School, the Philosophical Foundations of Property Law conference at University College London and the Private Law Theory workshop at the University of Edinburgh. I am especially grateful to Simon Douglas, Robin Hickey, Ben McFarlane, James Penner, Henry Smith, Lionel Smith, and Malcolm Thorburn for their comments. Ted Brook provided excellent research assistance.

1‘Qui prior est tempore, potior est jure’.

2Parker v British Airways Board 1982, 1019.

3See Pollock and Wright 1888, 93 stating that possession gives rise to a ‘right in the nature of property’; McFarlane 2008, 144 arguing that possessors’ rights to exclude are identical to those of owners; Holmes 1872, see n. 7.

ownership pro tem is significant: it preserves the authority of owners by enabling a finder to slot herself into a role that is protective of the office of ownership.

This concept of ownership pro tem does not, however, explain all the variety of rights to possess in the common law. Not all holders of rights to possess are owners pro tem. Someone who mistakenly assumes something is hers and someone who knows it is not but who asserts dominion over it anyway—i.e. a thief—both possess without deference to the authority of the true owner.5 What explains this other variety of right to possess, that of the wrongdoer? In Section 2, I argue that there is a second and distinct normative nexus that exists between a wrongdoer and a later possessor in some contexts.6 The ancient concept of privity explains this normative nexus. Privity is an under-theorized but widely used concept in the private law.7 It describes the relationship that exists where two or more people share the same foundation of right or interest, whether that means they partake of the same office, the same blood, the same transaction,8 or the same right.9 Privity in effect creates a double-blind situation: privies cannot stand outside their relationship to take an external perspective on the rights and obligations that they owe one another. And from the outside looking in, privies rise and fall together with respect to the right or interest that they share, whatever the arrangements are that they have made internal to that relationship.10 Privity explains one very limited kind of right to possess that is available even to wrongdoers: if a wrongdoer in bare possession of a thing puts another in possession of it, then there is a shared foundation to both possessors’

5Someone who mistakenly assumes ownership of someone else’s thing at least commits trespass and is not able to claim the role of a finder, which would account for her taking possession of a thing in a manner consistent with the true owner’s retained rights. See n. 21.

6Of course privity does not exist just in the context of wrongdoers. It is rather that wrongdoers depend on privity for their right to possess.

7See Holmes 1872, 7; Tettenborn 1982. Rastell 1721, Privity: ‘Because of what has passed between these parties, they are called privies in respect of strangers, between whom no such conveyances have been made.’ Privity in estate, privity in deed (reversion to X): Holmes 1872, 46.

8Privity of contract was a late addition. See Palmer 1992, 10–11. Other privities include the privity of tenure, deed, title, estate, possession, and blood. Ballantine 1919 (privity of possession creates continuity of possession by mutual consent. Other privities discussed include: ancestor-heir, lessorlessee, judgment debtor-execution purchaser).

9A form of privity arises where there is a shared foundation of some purely negative normative

position, for instance, where adverse possessors join forces against a true owner through privity of possession. ‘Recent Case Notes’ (1929) 29 Yale Law Journal 795 at 806 (describing privity of possession between adverse possessors); Brown v Gobble 1996; Illinois Steel Co. v Paczocha 1909 (‘It is said that there must be privity between the successive occupants, but this does not at all mean that there must be a privity of title. . . . The privity between successive occupants required for the statute of limitations is privity merely of that physical possession, and is not dependent upon any claim, or attempted transfer, of any other interest or title in the land’). See also Kepley v Scully 1900 (no writing requirement for ‘conveyance’ between AP1 and AP2: really the deed itself is just evidence of privity. It is this privity that enables tacking not the transfer of property rights.). See ‘Notes of Cases’ (1900) Virginia Law Register 490 at 491, ‘the parol transfer by the first to the second possessor of property held adversely, with succession of occupancy, is held, in Illinois Steel Co v Budzisz 1909, to be sufficient to unite the two possessions into one for the purpose of acquiring title by adverse possession.’

10 Beverley’s Case 1603 (issue estoppel extended to your privies); Coke 1628, 1: 71 (estoppel of lessor-lessee); Laverty v Snethen 1877 (privity of bailment means bailee stands on bailor’s title and so any determination of the bailee’s rights vis-à-vis outsider, resolving the question of ownership, is also binding on bailor). Bailor has duty to protect bailee who is sued in relation to title/possession.

claims to possess the thing. The second possessor is estopped from denying the right to possess of the wrongdoer insofar as his own claim to be legitimately in possession of the thing depends on it too. This leaves an earlier possessor, though a wrongdoer, in a position to maintain a right to possess at least inter se.11 Once again, the relative merits of claimants in this kind of a contest attests to the importance of the causa possessionis, the ground on which a person came into possession of a thing.

1.Finders and Ownership Pro Tem

1.1Owners and finders

When the true owner comes out of possession of his property, either by granting a bailment to another or by losing it, it is not difficult to determine who as between the true owner and the bailee or finder, has the superior right to possess it. Of course, it is the true owner, who also happens to have the chronologically prior possessory claim, as well. In a way, then, disputes between true owners and bailees or finders are clear cases where ‘first in time, stronger in right’ consistently generates the right answer to the question of whose possessory right should prevail. But although it consistently generates the right answers here, it does so in a way that is highly misleading. For it suggests that such disputes are just a species of a more general principle of ‘first in time, stronger in right’, where the relevant normative considerations are the same. But, as I shall endeavour to show in this section, they are not. Ownership is a unique position of authority over the thing, and the owner’s position is always different in kind from that of any other possessor.

By declaring someone to be the owner of a thing, a system of property settles the important question of who among us has supreme decision-making authority with respect to that thing (subject of course to public law regulation). And yet, in any system of property, things may get lost, stolen, or otherwise separated from their owner. Is the business of ownership on hold until the thing is back in the hands of the true owner or can the office of ownership function even in the absence of its chief officer? The relativity of title is, on my account, the mechanism by which the common law deputizes someone to stand in for the owner until the owner is found. In a sense, things are never lost; owners are. The thing itself remains in the system of property, within the jurisdiction of the office of ownership. What is missing is the owner, and what is called for is someone to act in her stead.

A person who comes into possession as a ‘finder’ acquires a special position within our system of property, a position I will call ‘ownership pro tem’.12 A finder

11This normative nexus, built on relationships of privity, may exist between a finder/bailor and her bailee. My point is just that this is the only normative nexus on which a true bare possessor, someone who does not own or take possession as a finder, can depend. See e.g. Palmer 2000, 12: ‘If the finder bails the chattel to another, the estoppel which applies at common law between bailor and bailee will prevent the recipient from pleading that the finder is not the owner.’

12Many jurists have struggled to explain the nature of finders, often resorting to ideas of quasibailment to explain their relationship to the true owner while they are in possession of the thing. There are many problems with this analogy of finders to bailees: they are there unilaterally, without any

occupies the office of ownership temporarily while the owner is missing but merely as the steward of the position itself.13 A finder’s right to possess is not identical in kind to an owner’s on this account:14 it is fundamentally a duty-based position, the possibility of which the law preserves through a special right to possess.15 The finder has a basic responsibility to the owner when she undertakes to serve as owner pro tem, and it is arguably the discharge of this responsibility that the law protects against interference by third parties.16

A finder must know her place: she lacks the authority to assert total dominion of a thing that someone else owns.17 She is commissioned to assume the office of ownership only temporarily and indeed only partially, on an emergency basis.18 A finder thus bears many of the burdens of ownership but lacks the full set of beneficial privileges or powers that characterize ownership: she lacks absolute rights to use, sell, consume for her own gain. If she does use the thing, she is liable for any

transfer of rights from the owner, and possess only insofar as they are unable to put the thing back into the hands of the true owner. The concept of ownership pro tem better accounts for the position of finders in relation to an office of ownership. See Palmer 2009, para. 26-001, for further discussion of the problems with treating finders as bailees.

13If finders are able to escape their role as owner pro tem, it is because of statutory interventions that extinguish the right of an owner to sue for wrongful interference. When is there a conversion? Sovern v Yoran 1888 (no ‘right’ if not made a bailee); South Staffordshire Water Co. v Sharman 1896; Hannah v Peel 1945. Note that there is some controversy in the law about whether the finder’s obligations survive the loss of the thing itself. See Fox 2006, 343: ‘special’ property as a rule depends on having the goods in possession. But see discussion in Douglas 2008: confusion in the law on the liability of finders for careless loss.

14Contrast this with the widespread push in the common law since the late 19th century to see owners and finders as holders of the same generic right. Consider e.g. Holmes 1881, 187–8: ‘The common law should go so far as to deal with possession in the same way as title and should hold that when it has once been acquired rights are acquired which should continue to prevail against all the world but one until something has happened sufficient to divest ownership.’ See also The Winkfield 1902, 60: ‘as between bailee and stranger, possession gives title—that is, not a limited interest, but absolute and complete ownership . . . ’.

15Foremost among these are the duties to seek out the true owner, and to take reasonable care of the goods. See Parker v British Airways 1982, per Donaldson LJ, 1017, 1018: ‘a person having a finder’s [“very limited”] rights has an obligation to . . . acquaint the true owner of the finding and present whereabouts of the chattel and to care for it meanwhile’.

16A finder, in the absence of an owner, has a right to sue in conversion as in the absence of the owner she will always have responsibility to steward the position of owner. The common law tradition once clearly linked responsibility to the true owner and the right to sue for interferences with possession in the context of bailments. See e.g. Bacon and Gwillim (1798, 6: 685) in a comment on Armory v Delamirie 1722: ‘Because, as the finder is answerable for the jewel to the person in whom the general property is, he has a special property therein’. There are difficulties with this interpretation, pointed to in Clerk 1891: pointing out that this was not explicitly decided on this basis. See also Blackstone 1765,

2:395; and Rooth v Wilson 1817, and especially Claridge v South Staffordshire Tramway Co. 1892: (consistent with the view that possession is the basis of a generic form of right to possess in the nature of property). This line of reasoning is in disfavour. See The Winkfield 1902 (expressly overturning

Claridge).

17See R v Watts 1953, 7 (evidence of ownership throws burden on finder to show he had come into possession lawfully. Under the Forest Act, marks on logs prima facie evidence of ownership. Not theft in that case because no mens rea: accused reasonably believed they had permission to salvage as had done so for those owners before).

18See R v Thurborn 1849: finders are not guilty of larceny where they have the intention to take just a partial and temporary right.

loss or destruction that results.19 Nor does the finder have one of the most characteristic powers of ownership, the power to create independent property rights in that thing, e.g. liens.20 A finder in effect does nothing more than keep the seat warm for the true owner (which some finders forget, to their great disadvantage, when they assume the position of owner without being in a position to escape the bonds of finding, for instance, by establishing that the thing was abandoned).21 It follows then that the finder must step down where the true owner is located—not because the owner’s right is the earlier right but rather because the finder, as deputy, is not required once someone higher up the chain of command appears. This explains why the finder must yield to whoever has dominion over the thing, even someone who becomes owner after the finder’s own right to possess is acquired.22

Finders and owners are not simply prior and later holders of otherwise identical rights to exclude, with the result that temporal priority does not fully account for their relative merits. The relationship between finders and owners has a hierarchical structure: a finder has a position within the office of ownership, and her special right to possess depends on the authority of that office. The subordinate nature of a finder’s ‘special property’ was clearly expressed in the old common law crime of larceny: a person was guilty of larceny at common law if he appropriated a thing ‘with the intent to take the entire dominion over them, knowing or having a reasonable belief at the time he found the goods the true owner thereof ’.23 The basis on which a person takes possession thus matters to their status in our system of property.24 A person is a finder, with a finder’s right to possess, only if he took possession on that basis. This explains why in the early history of the common law,

19Palmer 2009, para. 26-090: ‘conversion is committed whenever the finder uses the goods for his own benefit, or hires them to a third party, or intercepts and consumes the profits of them, or seriously mishandles them’. See also Palmer 2000: a finder will herself be bound by such rights (in personam).

20A finder cannot create a lien that will be binding on the owner, either in herself or in someone else. Palmer 2009, para. 36-036, citing Pegasus Leasing ltd v Confini 1991 unreported, 13 November 1991, Sup Ct NSW Eq Div. The American case law suggests the same. Apart from statute, a finder who returns lost property is not entitled to a reward unless publicly offered: Automobile Ins. Co. of Hartford Conn. v Kirby 1932. However, when a specific reward is offered, a finder may be held to have a lien against the owner for the amount of the reward: Everman v Hyman 1892. In contrast, there is no situation in which a finder could create binding subordinate rights in another via pledging (pawning) the goods. At common law, a pledgor must either be the owner of the goods at the time of the pledge, or show that he enjoyed the owner’s authority to pledge them: Cole v North Western Bank 1875, 362–3. The unauthorized pledgor commits conversion against the true owner Advanced Industrial Technology Corp Ltd v Bond Street Jewellers Ltd 2006, para. 3.

21A finder may have the power to require that other claimants prove first that they are the true owner (using interpleader). See Clashfern 2008, para. 489.

22Palmer 2009 para. 26-002: a finder’s obligations move with title to the goods as the title shifts from original owner to new owner.

23R v Thurborn 1849. Causa possessionis also matters to the distinction in the common law between mere trespass and conversion: see Foulds v Willoughby 1841 (removal of a horse, with no intention to take dominion of it, is a mere trespass not a conversion). A possessor without a good causa possessionis is especially vulnerable with respect to the true owner—even more so than a finder. Thus, in R v Riley 1853, a man drove his neighbour’s lamb out with his own by mistake and then sold it. As he took possession by mistake—and not as a finder—his initial taking was trespassory.

24This does not mean that a wrongdoer never receives any protection in law against a subsequent possessor: they sometimes do but for reasons to do with relations of privity rather than property.

finders typically called witnesses, generally their neighbours, to attest to the found nature of the goods and so the basis of their possession as finders.25

The concept of ownership pro tem is a feature of a system of property rights organized around ownership as sovereignty. There are examples of its use elsewhere in the common law, to protect the position of owner. For example, the common law anciently held that strangers could set themselves up as essentially a trustee of a dispossessed owner of land by retaking possession of it in the name of and for the use of the true owner.26 The self-proclaimed champion assumed a kind of ownership position through this intervention that was both temporary and partial: the possession was meant to be entirely for the benefit of the owner. Taking position like this in the name of the true owner, even without the permission or the knowledge of the true owner, had the effect of establishing the intervenor as owner pro tem. If the dispossessor brought an action essentially to quiet title, the owner pro tem had at that point to get the backing of the true owner within five years.27 This historical example illustrates the notion of owner pro tem, someone whom the law treats as stewarding office of owner on behalf of the true owner, without the full benefits of that position.

The concept of ownership pro tem, I readily concede, suggests a highly restrictive and perhaps even servile position for finders: a finder does not enjoy the very same right to exclude as an owner would, restricted only by the extent of excludability. Rather, the finder, like a rescuer, takes on a position of voluntary servitude to another for which there is no entitlement to promotion or reward for service.28 A finder’s right to possess is grounded not just in the fact of her possession but in her role in service of the owner. Why then would anyone take this on? That is of course an empirical matter that is outside my account of the structure of the role within our system of property: finders might hope that the true owner never shows up and so that they are able to convert the thing to their own use with impunity; they may count on being able later to show that the thing was abandoned all along. And of course modern finders’ statutes give finders at least a shot at gaining absolute possession of the thing, by extinguishing an owner’s right to recovery after a certain amount of time has passed.29

25Hickey 2010, 10, citing Pollock and Maitland 1898, 175.

26This is described in Coke 1628, s. 258a: ‘If an infant or any man of full age have any right of entrie into any lands any stranger in the name and to the use of the infant or man of full age may enter into the land and this regularly shall vest the lands in them without any commandement, precedent or agreement subsequent.’ The intervenor would have to get assent within five years or lose the right if the disseisor sought to bar the right through levying fines with proclamations in royal courts.

27Coke 1628, s. 258a.

28Many states and territories have implemented statutory rewards for finders. At common law, however, finders are not entitled to rewards. See Palmer 2009, para. 26-094. If a reward has been offered, the finder generally has a contractual right to the reward.

29See e.g. British Columbia’s Unclaimed Property Act SBC 1999, C 48. The act outlines a range of limitations periods based on the value of the lost item. Generally, limitation periods range from 6 years (the limitation period for conversion in some jurisdictions) to a few months in others, when combined with other steps (such as a reasonable search for the true owner, turning the thing over to the police).