Allocation

Contact: Jeremy Sheff

 We may well conclude that certain types of resources should be subject to private ownership, and we may further conclude that such ownership ought to entail particular rights of owners. But this would not be sufficient to establish a system of property rights. We would still need to decide which things are owned by whom. Certainly, if one of the rights of owners is the right to alienate, then once something is legitimately owned by someone, that person can transfer rightful ownership to someone else. (We will study how such transfers can come about later in this book—indeed we will find that some transfers can confer the rights of ownership on a transferee even where the transferor’s rights are not so clear-cut. We will also see that there are ways for things owned by one person to become owned by another person other than by voluntary transfer.) 

But even assuming a current owner could trace their rights of ownership back through a series of successive voluntary transfers from rightful owners—a chain of title, as we will come to call it—the first link in that chain must be something other than a transfer from a prior rightful owner. What could this something be? How do things go from being unowned to being owned? Why might we recognize some rules for such initial allocations of resources over the available alternatives? 

In this chapter, we will examine the most common justification for protecting someone’s rights of ownership: possession. The common law holds that initial ownership of a heretofore unowned thing goes to the first to possess that thing—that first in time is first in right. But as we will see, this rule is not as straightforward as it may seem. To begin with, reasonable people may differ as to what constitutes “possession,” or what it means to be “first.” Our first few cases illustrating this problem deal with first possession of chattels (sometimes called “personal property” or “personality”—basically any ownable thing that isn’t land or attached to land).