Important Points: Property

Property can be categorised between heritable and moveable; corporeal and incorporeal and fungible and non-fungible.

Heritable property is property which was traditionally immoveable and therefore only passed by succession (nowadays is used mostly to describe property which is not moveable). Moveable property is any property which can be moved.

Corporeal property is property which can be seen and touched (physical property). Incorporeal property exists solely in the form of legal rights (copyright, intellectual property etc).

Fungible property is property which has no unique value and can be easily replaced (examples given are grain and coin). Non-fungible property has a unique value (examples include pets and jewellery).

Basic Concepts in Property Law: Ownership and Lesser Interests

Real rights (ius in re) are rights in property which can be enforced against the world at large. The owner of property generally has a real right and can protect his ownership against challenge by anybody. In some cases it is necessary to perform a specific act to acquire real rights.

A personal right (ius ad rem) is simply a right of action against another person. The obligation may be created by agreement (contract) or by the operation of law (as in delict). Personal rights are often visible where there is an agreement to sell, but no sale has actually taken place.

Ownership is the most extensive property interest and gives the owner “the right of using and disposing of a subject as our own, except where restricted by law or paction” (Erskine). These can be imposed by statute (TV licensing or shotguns) or common law (nuisance for example).

Property owners can retain ownership while parting with some of the rights which make up ownership.

Possession is different from ownership. Two elements make up possession; a mental element, the intention to possess an object and make use of it as an owner and an actual physical control over an object.

The control element may be direct, where the subject is in the hands of the possessor or indirect, ie a house rented to a tenant or an employer lending his tools to an employee.

Possession of heritable property can mature into ownership over time. Ownership of moveables is presumed.

Owners can always recover property from a possessor. Custody is a lesser right than possession. It describes the situation where an

individual has a limited right or control of property, but no intention to possess it as an owner. They have no rights to retention (Barnton Hotel Co v Cook).

Common Property Common property describes the situation where an item of property is owned by a

number of individuals. Each co-owner has a share of ownership, not a right to a

particular part of property. Co-proprietors can dispose of their share of the property without reference to the other owners.

Each co-owner has a right of veto re the management of the property. The only exceptions are repairs or reconstruction which are de minimis (Rafique v Amin). Co-proprietors may seek interdict to prevent interference by other co-proprietors which are contrary to his interests (Baileys Exrs v Upper Crathies Fishing Ltd).

Co-proprietors have an absolute right at common law to order division and sale of common property, unless they have contractually barred themselves from doing so (Morrison v Kirk)

Common interest arises where there are separate properties separately owned, but are close enough that what one person does on their property can affect another on theirs.

Proprietors can prevent something to do with common interest by seeking interdict (Donald and Sons v Esslemont and Macintosh), as long as these concerns are not trivial (McCallum v Gunn).

Protection/Vindication of Rights

Restitution applies in any case where the owner did not intend to part with ownership of the object. Most commonly, this covers case of theft. Good faith possession is no defence against ownership.

Restitution is straightforward when the property is still in the hands of the third party against whom the action was brought. However;

1. Where the person sued has parted with the property in good faith, then they are only entitled to recompense (a personal right) for any profit made by the defender from the sale

2. Where the defender parted from the property in bad faith, the pursuers are entitled to seek compensation for the full value of the property, while maintaing a real right to the property (Fauls v Townsend – although mention that in IBC v Ferguson, Shaw & Sons, the judge said that the circumstances were very special and should be regarded as restricted to their own particular facts).

o Sale of Goods Act 1979, s25: good faith third party purchasers are protected where the sellers are actually buyers in possession.

Corporeal Moveables: Original Acquisition of Ownership

Occupatio involves the taking of something which is not owned with the intention of becoming its owner. Things which are not owned, and open to acquisition through occupation are referred to as res nullius.

Where wild animals are confined, they become the property of the person confining them, and anyone removing them is guilty of theft (Anderson v Valentine).

The degree of confinement need to retain ownership varies with different objects (eg pebbles which merely need to be retained on the owner’s land to homing pigeons which require no confinement at all).

Accession takes place when one object becomes attached to/combined with/produced by another.

Applies to the offspring of animals etc Specificatio applies when something new is manufactured out of materials in

whole or in part belonging to the manufacturer; there must be some form of irreversible transformation, rather than merely the building of different components into a whole, a la childrens building bricks. Specificatio was not applied in the case of McDonald v Provan of Scotland St, where two cars were cut in half and the front of one welded to the back end of another.

Where the materials used do not all belong to the manufacturer, any agreement between the two parties will regulate ownership of the manufactured property, and if there is no agreement the property will be owned by the manufacturer, subject to an obligation to compensate the owner of any raw materials which he did not own for their value (IBC v Ferguson, Shaw & Sons).

Commixtio and confusio apply when there has been a mixing of properties belonging to different owners. Commixtio is the mixing of solids, whereas confusio applies to the mixing of liquids.

The rules which apply in these situations are:o Where things are mixed casually and can be separated easily and

practicably, ownership remains with the original owners.o Where they cannot be practically separated the resulting mixture is the

common property of the owners to the extent of their contribution to the mixture.

o When the consequence of mixing is something new and distinct, the rules are displaced by those of specificatio.

Lost or Abandoned Property

Lost property does not become available for acquisition by anyone who finds it – at common law, such property continues in the ownership of the prior owner, with the crown taking ownership either temporarily or permanently where he/she does not come forward to claim the property.

On abandonment of property the owner loses ownership and ownership is transferred to the crown.

Buried treasure belongs to the crown (Lord Advocate v Aberdeen University) Appropriation of lost property by the finder amounts to theft (Mackenzie v

Maclean). Lost and abandoned property is now largely regulated by statute (Civic

Government (Scotland) Act 1982, EPA 1990 and Dogs Act 1906).

Incorporeal Moveables

Incorporeal property has no physical existence and consists solely of legal rights. Examples include the right to compensation for personal injury, right to aliment etc.

Certain types of right are not transferable; these are rights which are personal to the individual enjoying them (alimentary rights of financial support to children and various benefits etc). Conditional rights, for example to beneficiary under a will can be transferred even though they may never come to fruition.

Person making the transfer is known as the cedent, the person whose favour it is being made is the assignee.

The person who the rights are in favour of is the creditor, the person who the rights are enforceable against is the debtor.

At common law (Carter v Macintosh) no special form of words are needed to indicate a transfer. Any assignation should be in writing (Brownlee v Robb)

To be effective an assignation must be delivered to the assignee, however this only confers a personal right on the assignee. In order to obtain a real right, delivery must be intimated to the debtor.

Essential Cases

Common Property/Common Interest1. Baileys v Upper Crathies Fishing; right to seek interdict to prevent acts contrary

to interests2. Rafique v Amin; right to conduct minor repairs without consultation3. Deans v Woolfson; right to conduct essential or necessary repairs4. Morrison v Kirk; right to divison and sale being absolute unless contractually

barred5. Donald and Sons v Esslemont and Macintosh; pursuer being able to prevent

something which is not in his common interest6. McCallum v Gunn; actions based on common interest must not be trivial

Restitution etc1. Armour v Thyssen; retentions of title clauses are permitted2. GMBH v Terex; where there is no specification restitution can be sought3. IBC v Ferguson, Shaw and Sons; where there is specification the manufacturer

becomes the new owner4. Faulds v Townsend; bad faith third party purchasers can be sued for full value of

property.5. McLeod v Kerr; good faith purchasers are protected when the original transfer is

voidable but had not yet been voided

Original Acquisition of Ownership1. Anderson v Valentine; where animals are confined they become the legal property

of the confiner and can be stolen.2. Wilson v Dykes; res nullius cannot be stolen3. McDonald v Provan of Scotland St; specification did not apply where there was

bad faith on the part of the manufacturer and if the process is easily reversible no specification has taken place

4. Miller; state of mind is irrelevant for specification

Lost or Abandoned Property1. Stair; abandoned property becomes the property, temporarily or permanently of

the crown2. Lord Advocate v Aberdeen Uni; buried treasure belongs to the crown as nobody

has any good claims over it.3. Lawson v Heatly; appropriation of lost propert amounts to theft.4. Mackenzie v Maclean; exceptions to above rule5. Civic Government Act (Scotland) 1982; largely regulates the disposal of lost

property6. Dogs Act 1906; as above, but for dogs

Delivery1. Liquidator of West Lothian Oil v Mair; handing over of keys is actual delivery2. Anderson v McCall; constructive delivery (where transferee is notified of change

in ownership)

Incorporeal Moveables:1. Carter v Mcintosh; no special form of words are required for assignation2. Scottish Widows Fund v Buist; assignee has no better right than cedent3. Scottish Equitable Life Insurance v Buist; insurance companies may be barred

from refusing to pay out if they continued to accept premiums despite knowing the policy was voidable