Australian Personal Property Law - Assignment Example

PERSONAL PROPERTY LAW The Case Question Giles Manteau was a pioneering scuba diver who had explored and charted the vast underwater caverns and river systems beneath the surface of the New England Tablelands. The Swiss watchmaker Veuve Heure had commissioned a unique diver’s watch designed for underground cave diving. Only one hundred (100) such watches were ever manufactured. Veuve Heure gave the first watch inscribed as “Marque #1” to Giles to coincide with his exploration of the Uralla subterranean river system. Manteau wore the watch during the landmark dive. Several years later Manteau loaned the watch “Marque #1” to the National Diving Museum in Sydney. When the exhibition opened, it was discovered to the horror of Museum staff that the watch had gone missing. Investigations at the time failed to uncover the watch’s whereabouts. Ten years later a prominent Armidale businessperson claims to have located the watch. She says she purchased it from a seller who had advertised the watch for sale in a Sydney newspaper for $2,000.00. Background In Roman law, property was defined as - ius utendi et abutendi re sua, quatenus iuris ratio patitur, meaning, “the right to use and abuse a thing, within the limits of the law.” In a contemporary textbook on property law, it is explicitly stated that when a layman is asked to define “property,” the layman will likely respond that it is something tangible and “owned” by a natural person (or persons), a commercial entity or corporation, or a unit of government. However, from a legal viewpoint, such response is inaccurate for two reasons: (1) it confuses property with the various subjects of property, and (2) it fails to recognize that even the subjects of property may be intangible. For a lawyer, property is not a thing at all, although things are the subject of property. Rather, as Jeremy Bentham asserted, property is a legally protected “expectation….. of being able to draw such or such an advantage from the thing” in question. In another source, it states that “in the strict legal sense, [property is] an aggregate of rights which are guaranteed and protected by the government” and that the term property “includes not only ownership and possession but also the right of use and enjoyment for lawful purposes” (Black’s Law Dictionary). In comparison, Barron's Law Dictionary defines property as “one's exclusive right to possess, use, and dispose of a thing” [ . . . ] “as well as the object, benefit, or prerogative which constitutes the subject matter of that right.” Property law can be classified into personal and real property. Real property deals with rights in rem, or cocnerning land while personal property concerns itself with rights in personam, or regarding chattels. Declared ownership in and of itself is inadequate to represent property in a legal sense. Instead, the idea of property comes up where one can have his/her right to land or chattels respected and enforced by a court of law. Hence, to possess good title (and enforceable rights) on property, one must acquire it lawfully, according to the laws of the jurisdiction in which one seeks enforcement. In common law systems, personal property are also be called chattels. It is distinguished from real property, or real estate. While in the civil law structures, it is usually referred to as movable property or movables, that is, any property that can be conveyed from one location to another. The term is distinguished from immovable property or immovables, like land and buildings. Personal property are classified in different ways, such as money, negotiable instruments, securities, goods, and intangible assets. The distinction between these types of property is significant for several reasons. Usually one’s rights on movables are more satisfied than one's rights on immovables (or real property). The statutes of limitations or prescriptive periods are usually shorter when dealing with personal or movable property. As it is, real property rights are usually enforceable for a much longer period of time and in most jurisdictions real estate and immovables are registered in government-sanctioned land registers. While in some areas, rights (such as a lien or other security interest) can be registered against personal or movable property. Likewise, in the common law, it is possible to place a mortgage upon real property. Such mortgage requires payment or the owner of the mortgage can seek foreclosure. On the other hand, personal property can often be secured with similar kind of device, variously called a chattel mortgage, trust receipt, or security interest. In the United States, Article 9 of the Uniform Commercial Code governs the creation and enforcement of security interests in most (but not all) types of personal property. Many jurisdictions charge a personal property tax, an annual tax on the privilege of owning or possessing personal property within the boundaries of the jurisdiction. Automobile and boat registration fees are a subset of this tax. Most household goods are exempt as long as they are kept or used within the household. In most instances, the tax becomes a problem when the taxing authority discovers that expensive personal property like art is being regularly stored outside of the household. Lost Property Property is considered to have been lost if it is found in a place where the true owner likely did not intend to set it down, and where it is not likely to be found by the true owner. For instance, a golden bracelet found lying on the ground will be considered to have been lost. With common law, the finder of this lost bracelet could claim the right to possess such against any other person in the world except the true owner. This is illustrated in the case of Armory v. Delamirie, 1 Strange 505 (King’s Bench, 1722). It must be noted however that the fundamental policy objectives to these distinctions are to (hopefully) see that the property is returned to its true and original owner, or title owner. In most areas, there are statutes being enacted necessitating that the finder of lost property turn it in to the proper authorities; now, if the true owner does not arrive to claim the property within a certain period of time, the property is given back to the finder as his own. In Britain, many public businesses have a lost property desk, which in the United States would be called a lost and found. There is a litany of often contradicting common law exceptions to the rule that the first finder of lost property has a higher claim of right over any other person in the world except the true and original owner. For instance, as a general exception, trespassers will usually lose superior claim to any lost property they find in the course of their trespassing to the respective landowner. As a corollary to this exception, landowners have superior claim over all finds made within the non-public areas of their property. As an example, if a customer finds lost property in the public area of a store, the customer has superior claim to the lost property over that of the store-owner, but if the customer finds the lost property in the non-public area of that store, such in an area marked Employees Only, the store-owner will have superior claim, as the customer was trespassing when he found it. The status of finders as employees or tenants of the landowner complicates matters, because employees and tenants have legitimate access to non-public areas of a landowner's property that others would not, without trespassing. Employees and tenants, however, still usually lose superior claim over lost property to their employers or landlords, if the property is found within the scope of their employment, or outside the actual leased area, respectively. For example, if the lost property is found by a tenant inside the walls of their leasehold, or by an employee embedded within the soil of an estate owned by their employer, the landowner (as employer or landlord) of the property where it was found usually has a superior claim of right over that of the finder. However, this is not always the case, as a long-term tenant who finds lost property within the leased area of his leasehold may have a superior claim over that of his landlord (especially if the landlord has never been to the property). While employers usually have a superior claim over lost property found by their employees, exceptions to this exist as well, as modern law sometimes grants the employee superior claim if turning over lost property to their employer is not part of their job description (such as if the employee is an interior decorator). Bona Fide Purchaser A basic common-law principle is that an individual cannot pass a better title than she has, and a buyer can acquire no better title than that of the seller. A thief does not have title in stolen goods, so a person who purchases from the thief does not acquire title. A bona fide purchaser is an individual who has bought property for value with no notice of any defects in the seller's title. If a seller indicates to a buyer that she has ownership or the authority to sell a particular item, the seller is prevented from denying such representations if the buyer resells the property to a bona fide purchaser for value without notice of the true owner's rights. At common law, such an estoppel did not apply when an owner brought an item for services or repairs to a dealer in that type of goods and the dealer wrongfully sold the chattel. The bona fide purchaser, however, is protected under such circumstances by the Uniform Commercial Code (UCC). Case Study In this particular case, the following assumptions were that: the watch was delivered to the Museum but was accidentally dropped by a Museum staff member in its loading zone; the person who advertised the watch for sale in the newspaper found the watch in the loading zone Discussion Although this is obviously a case of “lost property,” there are other issues involved in the situation and not just simply the determination of who is the rightful owner of the watch after it was recovered being missing for 10 long years. Based on existing property laws, the Armidale business woman has superior claim to the lost item. She wasn’t the original finder but since the first person who found the item sold it and the Armidale woman “purchased it for value and without notice of fraud,” then the lost item is now hers. As a rule, a good faith purchaser is one who buys without notice of circumstances which would put a person of ordinary prudence on inquiry as to the title, or as to an impediment on the title, of a seller (Phillips, 1997). Usually, one would not be a purchaser in good faith if one had actual notice of a prior inconsistent dealing. A bona fide purchaser then buys believing he or she is entitled to buy and that the seller is entitled to sell. In the case of Armory v. Delamirie, it was ruled that “a finder does not acquire absolute property or ownership in the item but does acquire a right to keep it against all but the true owner or his agent or a person who can assert a right at the time the finder obtained the item (i.e. a prior possessor or finder). Moreover, since this case involved a personal property, it is then governed by the Limitations Act which clearly provides that “an action may be brought for a claim for two years from the date of discovery,” something which Giles didn’t do. As a rule, the law allows a 15-year limit from the day of loss, strictly, when the lost item resurfaced, it was still within the allowable limit (since it was located after 10 years) which correspondingly mean that Giles still could have made a claim. However, there are a few facts that the case is silent about – 1) the unique diver’s watch can be considered a “rare” item since it was manufactured and exclusively designed for underground cave diving; in the case, there was no indication that such “historical” accessory was ever registered or patented, either by the Swiss maker or by Giles himself. If the watch was registered at the Patent office, he could have made the claim and he would still be the rightful and lawful owner even if the item has not been in his possession for ten long years; 2) after the first finder found the watch in the loading zone, it wasn’t clear if he/she made a report to the proper authorities that a lost or misplaced item has been found; it wasn’t also clear if he/she has made every effort to find the owner of the item that has been found. According to the law, the finder “must make a reasonable effort to find the true owner and care for the item in the meantime”; 3) it wasn’t clear how the first finder got to where he/she found the lost item. In the case of Bird vs. Fort Francis (1949, Ontario), the court had three (3) options in classifying or describing how a finder got to the location of the find. One, that the finder was a true finder, meaning, a person who found something, was not trespassing and had an honest intent (i.e. intended to try and find the true owner); two, the finder was a wrongful finder, meaning, a person with no right to take the lost item either because the person was trespassing or because the person did not have intention to try and find the true owner; and three, the finder was again a wrongful finder that can be considered a criminal, this means that theft was the sole intent in taking the item. The National Diving Museum, based on the facts of the case, unfortunately does not have any claim whatsoever to the watch. Yes, it is true that the owner made an overt declaration that he intends to loan the item to the establishment and they in turn accepted the offer and yes it is true that it was “delivered” to the place. However, upon close examination, one can deduce that although a “delivery” has allegedly been made, in reality, the watch never made it to the museum because of the assumption that it got lost on its way. What the museum management has was “responsibility” for the loss since it was presumed that the item was already in their possession and in their territory but they do not have a claim to it. In fact, Giles should have sued the museum for outright negligence. A “loading zone” means that the item has already reached its destination except that it has not been unloaded yet and has not been deposited to its rightful and proper location. Even if they didn’t have knowledge of how it got lost or where specifically it got lost, they should have taken command responsibility to the person who was authorized at that time to pick up and unload the item. However, in the case, they didn’t do anything. The original finder has abrogated its claim of ownership to the item immediately right after the item was sold. Whether this finder took the watch in good faith or with malice is no longer an issue; the watch has been sold and paid for thereby terminating the contract of sale which in turn terminated and stripped him/her of whatever little right he/she has over the item. However, for discussion purposes, the first finder seem behave in bad faith. He/she should have done the following to prove that she/he didn’t act with malice: Turn the property over to the police department of the city where the property was found; if the item was found outside city limits, then the item should have been turned over to the sheriff's department of the county where the property was found; Fill out a written statement describing the item, explaining when and where the item was found, that he or she knows who owns the property/doesn’t know who the owner is, and that he or she has not withheld or disposed of any part of the item. The statement, which is known as an affidavit or declaration, must be signed under penalty of perjury. The law enforcement agency is then obliged to make reasonable attempts to find the owner of the item/property. If the property is not claimed by the owner within 90 days, the property belongs to the finder if its reported value is less than $250. However, if the reported value of the property is $250 or more, the police or sheriff's department must publish a notice of the property once in a newspaper of general circulation. If no one claims, and proves ownership of, the property within seven days after the published notice, and if the finder pays the cost of publishing the notice, the property belongs to the finder. If the law enforcement agency refuses to accept the property, then to avoid being held liable for damages to the property, the finder should handle the property according to the same abandoned property procedure above which the police or sheriff would apply Possible Remedy Trover is a form of lawsuit in common-law countries for recovery of damages for wrongful taking of personal property. Trover belongs to a series of remedies for such wrongful taking, its distinctive feature being recovery only for the value of whatever was taken, not for the recovery of the property itself. Trover damages are measured by the market value of the object (not its replacement cost) plus compensation for deprivation of use and compensation for other losses naturally and proximately caused by the wrongful taking. The aggrieved party can also recover interest that would have been earned by the money value of the object and any expense (except attorney's fees) incurred in attempting to recover the object. If the taker sold the object for more than its market value, the aggrieved party receives that higher price. If the taker has made improvements on the object (e.g. repainted it), the value of such improvements are not deducted from the complainant’s recovery unless the taking was by mistake. References Reed, Smith, Shaw and McCLay. ”Technology Transfers: Intellectual Property Due Diligence”. Seminar Series, December 9, 1999. Rivette, Kevin G. and Kline, David. Rembrandts in the Attic: Unlocking the Hidden Value of Patents. Harvard Press: Boston. 2000. Jesse Dukeminier and James E. Krier, Property, Fifth Edition, Aspen Law & Business (New York, 2002) Jon W. Bruce and James W. Ely, Jr., Cases and Materials on Modern Property Law, West Group (St. Paul, MN, 2003), Heller, M.A., & Eisenberg, R.S. (1998). Can Patents Deter Innovation? The Anticommons in Biomedical Research. Science, 280(1 May 1998), 280, 698-701. Phillips, J “Intellectual Property as Security for Debt Finance ‑ A Time to Advance?” (1997) 6 EIPR 276. Read More