23 November 2020 Written by  DANIEL W/GEBRIEL & MELKAMU BELACHEW

Theories of Property Rights

 

 

The theory that property exists as a natural right has had long and widespread acceptance. Many of the legal philosophers of Germany were expositors of this theory. As they expressed it the personal right of man, as determined by nature, is to possess a sphere of action sufficient to supply him with the means of support. This physical sphere should, therefore, be guaranteed to everyone, conditioned, however, upon his cultivating it by his own labor. Thus all should labor and all should also have wherewith to labor. The right to possession is a direct right, inalienable, antecedent to all law, and instituted for the general good. This theory is one application of the approach that all activity of the human race is the planned product of divine wisdom or of some unavoidable and immutable nature of things.

 

Laveleye in the twenty-seventh chapter of his book on Primitive Property (1878) gives the following exposition and refutation of four of the theories advanced concerning the origin of property.

 

Occupation Theory

''Roman jurists and most modern ones have considered occupancy of things without an owner as the principal title conferring property. Quod enim nullius est id, ratione naturali, occupanti conceditur, says the Digest. This theory can be easily maintained, so long as it only has to do with movables which can be actually seized and detained, like game taken in the chase, or goods found; but it encounters insurmountable difficulties when we attempt to apply it to the soil. In the first place, history shows that the earth is never regarded by men as res nullius. The hunting ground of hunting tribes, or the pastures of pastoral nations, are always recognized as the collective domain of the tribe; and this collective possession continues, even after agriculture has begun to fertilize the soil. Unoccupied land has therefore never been regarded as without an owner. Everywhere, in former times as in our own, it was considered as belonging to the commune or the State, so that there was no room, in former times any more than in our own, for acquisition by occupancy.

''Most of the partisans of this theory do allow a sort of primitive community, communion bororum primaeva. But they add, that in order to obtain individual ownership of things which they took possession of, all men tacitly agreed to renounce, each for himself, this undivided right over the common domain. If it is the historic origin of property, that they seek to explain in this way, history knows of no such agreement. If it is meant as a theoretical and logical origin, in this case they lapse into the theory of contract, which we shall examine further on.

''M. Thiers, in his work De la Propriete, borrows the idea of Cicero, who, comparing the world to a theatre, asserts that every one makes the place he occupies his own: Theatrum cum commune sit, recte tamen dici potest ejus eum locum quem quisque occupavit. The example goes against the theory which he is endeavouring to establish; for, in the first place, the spectator is only in possession of his place, and his possession merely gives him a temporary right and not the perpetual ownership; and, secondly, he occupies but one place. Hence no one could at best make his own more than the portion of the soil which he actually retains and can cultivate. M. Renouard, in his excellent work, Du Droit industriel, recognizes this: 'Of strict natural right, the occupation of land present serious difficulty in execution. It only gives a right over the soil actually held in possession.' Without this limit, in fact, a single man might, by some manifest sign of his intention, occupy a whole province.

''Occupation is a fact resulting from chance or force. There are three of us on an island large enough to support us all, if we have each an equal part; if, by superior activity, I occupy two-thirds of it, is one of the others to die of hunger, or else become my slave? In this case the instinct of justice has always commanded an equal partition. Hence we do conceive of a right of acquisition, anterior and superior to the simple fact of apprehension, which it is called upon to limit and regulate ...

 

Labour Theory

''The second theory of property would make labour its basis, This is the one adopted by economists, because, since Adam Smith, they have attributed to labour the production of wealth. Locke was the first to expound this system clearly, in his Second Treatise on Civil Government, Briefly, this is a summary of what he says on the subject:-

''God gave the soil to mankind at large, but as no one enjoys either the soil or that which it produces unless he be owner, individuals must be allowed the use, to the exclusion of all others.

''Everyone has an exclusive right over his own person. The labour of his body and the work of his hands therefore are likewise his property. No one can have a greater right than he to that which he has acquired, especially if there remains a sufficiency of similar objects for others. My labour, withdrawing objects from the state of community makes them mine. But the right of acquisition must be limited by reason and equity. 'If one exceeds the bounds of moderation and takes more than he has need of, he undoubtedly takes what belongs to others.'

''The limit indicated by Locke is, for moveable things, the amount which we may take without allowing them to spoil. For land, the limit is the amount which we can cultivate ourselves, and the condition that there be left as much for others as they require. 'The measure of property,' he says, 'nature has well set by the extent of man's labour and the conveniences of life; no man's labour could subdue, or appropriate all; nor could his enjoyment consume more than a small part; so that it was impossible for any man, this way, to encroach upon the right of another, or acquire to himself a property, to the prejudice of his neighbor, who would still have room for as good and as large a possession. This measure, we see, confines every man's possession to a very moderate proportion, and such as he might appropriate to himself, without injury to anybody.'

''So according to Locke the great principle is this: 'Every one ought to have as much property as is necessary for his support.'

''The necessity of private property results 'from the conditions of human life, which require labour and some material on which it may be exercised.'

''As Locke admits, on the one hand an equality of right in all men, and on the other hand the necessity for every man to have a certain portion of material, on which to live by his labour, it follows that he recognizes a natural right of property in every one.

''This theory is certainly more plausible than that of occupation. As M. Roder very justly remarks in his work, Die Grundzuge des Naturrechts, § 79, labour establishes between man and the objects which he has transformed a far closer connexion than mere occupation, whether symbolical or even actual. Labour creates value; accordingly it seems just that he who has given birth to it, should also enjoy it. Moreover, as no one can legitimately retain more than that which he can cultivate, there is a limit which prevents usurpation. But no legislation ever allowed that labour or specification was alone a sufficient title to establish property. He who is not already owner of the land or the material transformed, acquires nothing by his labour but a right to compensation or to remove the buildings and plantations set upon another man's land. Kant had already remarked that the cultivation of the soil was not sufficient to confer the ownership. 'If labour alone,' says M. Renouard (Du Droit industriel, p. 269), 'conferred a legitimate ownership, logic would demand that so much of the material produced, as exceeds the remuneration of such labour, should be regarded as not duly acquired.'

''Nay more: according to this theory the owner would manifestly have no right to full value of land let to a tenant. The tenant would become co-proprietor in proportion as the land was improved by his labour; and, at the end of a certain number of years, the proprietor would entirely lose all right of ownership. In any case, he could never raise the rent; for to do so, would be to appropriate the profits of another's labour, which would obviously be robbery.

''If labour were the only legitimate source of property, it would follow that a society, in which so many labourers live in poverty and so many idlers in opulence, is contrary to all right and a violation of the true foundation of property.

''The theory so impudently adopted by most economists, and even by M. Thiers in his book, De la Proprie'te', would therefore be a condemnation of all our modern organization. Jurists have violently opposed the theory. The summary of their objections may be found in M. Warnkoenig's work, Doctrina juris philosophica, p. 121, and in the Naturrecht of Ahrens. If labour is the source of property, why should the Institutes and the Code civil have said nothing of it? It may be said that labour ought to be the source of all property, but this principle would be condemnatory of the existing organization of society.

Social Contract

''In order to explain why men abandoned the primitive community, it has been asserted to have been in consequence of a convention, and thus property would be the product of a contract. This theory has even less to sustain it than the preceding.

''In the first place, when we seek to derive a right from a fact, we are bound to establish the reality of that fact, otherwise the right has no foundation. Now, if we go back to the historic origin of property, we find no trace of such a contract. Moreover, this convention, which we should to seek in the night of past ages, cannot bind existing generations, and consequently cannot serve as the basis of property at the present time. Convention cannot create a general right, for it itself has no value, except so far as it is conformable to justice. If property is legitimate and necessary, it must be maintained; but a decision taken by our remote ancestors will not entitle it to respect.

''Kant holds that specification creates a provisional ownership, which only becomes final by the consent of all the members of the society. Kant does not maintain that this consent was a historic fact: he speaks of it as a juristic necessity, or a fact the justice of which commands respect. But the moment we introduce the idea of justice, we are demanding of the general principles of law the sanction of human institutions, and to what purpose is it then to invoke a convention which has never occurred? It is enough to show that property is conformable to right.

''Without having recourse to abstract notions of justice or to the obscurities of historic origins, many writers of very different shades have maintained that property is the creature of law.

'' 'Banish governments,' says Bossuet, 'and the earth and all its fruits are as much the common property of all mankind as the air and the light. According to this primitive natural right, no one has an exclusive right to anything, but everything is a prey for all. In a regulated government, no individual may occupy anything. ... Hence arises the right of property, and, generally speaking, every right must spring from public authority.'

''Montesquieu uses nearly the same language as Bossuet: 'As men have renounced their natural independence to live under political laws, they have also renounced the natural community of goods to live under civil laws. The former laws give them liberty, the latter property.'

''Mirabeau said, in the tribune of the Constituent Assembly, 'Private property is goods acquired by virtue of the law. The law alone constitutes property, because the public will alone can effect the renunciation of all and give a common title, a guarantee for individual enjoyment.' Tronchet, one of the jurists who contributed most to the formation of the Code civil, also said: 'It is only the establishment of society and conventional laws that are the true source of the right of property.' Touillier, in his commentary on the Droit civil francais, admits the same principle. 'Property,' according, to Robespierre, 'is the right of every citizen to enjoy the portion of goods guaranteed to him by law.' In his Treatise on Legislation, Bentham says: 'For the enjoyment of that which I regard as mine, I can only count on the promises of the law which guarantees it to me. Property and the law were born together, and will perish together. Before law, there was no property; banish law, and all property ceases.' Destutt de Tracy expresses the same opinion; and more recently, M. Laboulaye in his Histoire de la propri'et'e en Occident, formulates it with great exactness: 'Detention of the soil is a fact for which force alone can compel respect, until society takes up the cause of the holder. The laws not only protect property, they give birth to it. ... The right of property is not natural but social.' It is certain, in fact, as M. Maynz remarks, that 'the three legislations (Roman, German and Slavonic) which now divide Europe, derive from the State exclusively the absolute power over goods which we designate by the word property or ownership.'

''If Mr. Laboulaye and other authors of his opinion only intended to speak of a state of fact, they are right. If I have gathered fruits or occupied a spot of land, my right hand at first, and subsequently the power of the state, guarantee me the enjoyment thereof. But what is it that my strong hand or the power of the state ought to guarantee to me? What are the proper limits of mine and thine? is the question we have to determine. The law creates property, we are told; but what is this law, and who establishes it? The right of property has assumed the most diverse forms: which one must the legislator sanction in the cause of justice and the general interest?

''To frame a law regulating property, we must necessarily know what this right of property should be. Hence the notion of property must precede the law which regulates it.

''Formerly the master was recognized as owner of his slave; was this legitimate property, and did the law, which sanctioned it, create a true right? No: things are just or unjust, institutions are good or bad, before a law declares them as such, exactly as two and two make four even before the fact be formulated. The relations of things do not depend on human will. Men may make good laws and bad laws, sanction right or violate it, right exists none the less. Unless every law is maintained to be just, we must allow that law does not create right. On the contrary, it is because we have an idea of justice superior to laws and conventions, that we can assert these laws or conventions to be just or unjust.''

Utilitarian

''A relatively modern theory takes the position that property arose because of its utility. 'Who would care to save and renounce immediate enjoyment, if he could not reckon on further enjoyment? 'Landed property,' said Mill, 'if legitimate, must rest on some other justification than the right of the labourer to what he has created by his labour. The land is not of man's creation; and for a person to appropriate to himself a mere gift of nature not made to him in particular, but which belonged as much to all others until he took possession of it, is prima facie an injustice to all the rest. ... The private appropriation of land has been deemed to be beneficial to those who do not, as well as to those who do, obtain a share. And in what manner beneficial? Let us take particular note of this. Beneficial, because the strongest interest which the community and the human race have in the land is that it should yield the largest amount of food, and other necessary or useful things required by the community. Now though the land itself is not the work of human beings, its produce is; and to obtain enough of that produce somebody must exert much labour, and in order that this labour may be supported, must expend a considerable amount of the savings of previous labours. Now we have been taught by experience that the great majority of mankind will work much harder, and make much greater pecuniary sacrifices, for themselves and their immediate descendants than for the public. In order, therefore to give the greatest encouragement to production, it has been thought right that individuals should have an exclusive property in land, so that they may have the most possible to gain by making the land as productive as they can, and may be in no danger of being hindered from doing so by the interference of any one else. This is the reason usually assigned for allowing the land to be private property, and it is the best reason that can be given.' ''

 

If property originated in considerations of general utility, it is quite understandable that its incidents from time to time should deserve constant reexamination as to their continued conformity to new wants and the new circumstances of a changing society.

 

Whether this pragmatic theory of the origin of property is true or untrue is not too important for our purposes. It is important, however, to believe, and to act as if we believed, that private property must find its justification solely in its social contribution.

 

Anti Property Argument

Marx is not the only one to have warned of problems in private property rights (at least as defined and awarded in western societies). Henry Gorge, Plato, Pierre-Joseph Proudhon, Jean Jacques Rousseau, and many early Christian philosophers also cautioned of property. Private property, it has been argued, inevitably creates a growing inequality of wealth which is morally unjustifiable and leads to social instability. Private property, it also has been urged, undermines good moral character. Recent scholars have argued that what some see as the advantages of private property can be disadvantages to others. In response to the argument that private property increases “the psychic good of certainty,” for example some argue that “to enhance certainty for one person is to impair certainty for another.” These arguments have led some to reject private property entirely and others to urge limitations on property rights.

 

Land: Significance and Ownership

1.4.1 General concept

As we mentioned earlier, land is a surface of the earth that includes the fixtures on it such as buildings, fence, tree plants, and improvement to the land etc. Land provides the foundation for the social and economic activities of people. It is both a tangible physical commodity and a source of wealth. Because land is essential to life and society, it is important to many disciplines, including law, economics, sociology, and geography. Each of these disciplines may employ some what different concept of real property.

 

Within the vast domain of law, issues such as the ownership and the use of land are considered. In economics, land is regarded as one of the four agents of production, along with labour, capital, and entrepreneurial coordination. Land provides many of the natural elements that contribute to a nation’s wealth. Sociology focuses in the dual nature of land as resource to be shared by all people; and as a commodity that can be owned, traded, and used by individuals. Geography focuses on describing the physical elements of land and the activities of the people who use it.

 

Lawyers, economists, sociologists, and geographers have a common understanding of the attributes of land:

  • Each parcel of land is unique in its location and composition

  • Land is physically immobile

  • Land is durable

  • The supply of land is finite

  • Land is useful to people

 

The scope of right to land

 

Cujus est solum, ejus est usque ad coelum

He who is proprietor of land is proprietor also of every thing on it. All buildings, all natural fruits, and everything above as well as below the surface, belong to the owner of the land. This Latin maxim was also reaffirmed by the English judge Lord Coke when he said cujus est solum ejus est usque ad coelum ad inferno, the owner of the surface of the real estate has property rights in the air above the surface and in soil below. Hence using this medieval time concept of land some writers give definitions such as the following:

 

 Land…includes not only the ground, or soil, but everything that is attached to the earth, whether by course of nature, as are trees and herbage, or by the hands of man, as are houses and other buildings. It includes not only the surface of the earth but every thing under it and over it. Thus in legal theory, the surface of the earth is just a part of an inverted pyramid having its tip, at the center of the earth, extending outward through the surface at the boundary lines of the tract, and continuing on upward to the heavens.

 

The ancient dictum of Lord Coke, which gave the owner of the surface the rights ad coelum (literally, to heavens), was utterly long before the development of air travel. Change in technology and travel have raised a number of legal questions concerning the scope of real estate ownership, rendering the ancient concept of unrestricted ownership to the heavens depths unduly simplistic. Modern society limited this right for different reasons that not only in relation to aviations but also for the reason that the state wants to control natural resources below the ground.

 

Different Forms Ownership of Land

Conventionally speaking, the ownership of land may be classified generally in to three major and two minor categories: private, communal and public on the one hand, and joint and community ownership on the other. In the following a brief discussion is made about the nature of such ownership rights.

 

Private Ownership

This is the kind of land totally owned by private individuals. It belongs absolutely to an individual and as such the law provides an absolute protection against any intervention on such right by any other party. In principle individuals have an absolute right of use, exclusion, and disposition of their property. However, in reality private ownership right is not an absolute one for the state and the public using the law may limit such right. Private ownership of land is well known and developed concept and system in most countries. The Ethiopian Civil Code under article 1205 describes private ownership as the widest right man can exercise over his property. Today only few countries, most of which were part of the former USSR socialist republic and other former socialist and communist countries, including Ethiopia, prohibited private ownership of land. The present Ethiopian constitution basically prohibits the private ownership of land. According to the FDRE constitution Article 40(3) the right to ownership of rural and urban land as well as of all natural resources is exclusively vested in the state and the people.

 

Communal Ownership

Communal ownership of land refers to such property of land commonly owned by a community of a certain village or locality. In most cases common grazing lands, water wells, irrigation lands or river systems, common use forestry and mountains, fishing lakes etc are categorized under this system. There are many such kinds of arrangements in many part of the world. The village or the community need to have some regulation to control the use of the common property. In some systems the state intervenes to make laws and regulations for the community. In Ethiopia, although such kind of system is envisaged in more general way in the constitution, Federal and regional land laws provide specific rules for the protection of community land such as grazing and irrigation lands. In reality there are many cases of irrigation and grazing lands commonly owned by villagers or particular people of the village.

 

Proclamation 456/2006, a proclamation that is provided for the Rural Land Administration and Land Use, defines “communal holding” under article 2(12) as "communal holding" means rural land which is given by the government to local residents for common grazing, forestry and other social services.

 

State/Public Ownership

This type of property constitutes all lands which are not owned by individual person/s or the community. In most countries, mountains, public highways, public halls, parks, trans-boundary Rivers and forest lands, lakes etc are owned and administered by the state. It must be noted that in western countries lakes, mountains and forestland can be owned by private people. The common similarity all countries show on the other hand is that public highways and trans-boundary Rivers are owned by the state. In Ethiopia, as stated above the state and the people together own these properties, and it seems the public in general or the state itself are also prohibited the absolute power of disposition of land in Ethiopia, sale.

 

The Federal Land Administration and Land Use Proclamation identifies under article 2(13) “forestlands, wild life protected areas, state farms, mining lands, lakes, rivers and other rural lands,” as state holding lands.

 

The civil code under articles 1444 and following tries to identity the kinds of real properties classified as state or public domain or properties. Although it is no more relevant for the current system of law, it may help students to understand the kind of real properties which can be owned by the state elsewhere.

 

Art. 1445. - Public domain. - 1. Principle.

Property belonging to the State or other administrative bodies shall be deemed to form part of the public domain where:

(a) it is directly placed or left at the disposal of the public; or

(b) it is destined to a public service and is, by its nature or by reason of adjustments, principally or exclusively adapted to the particular purpose of the public service concerned.

Art. 1446. - 2. Immovables.

The following property, if owned by the State or other administrative bodies, shall be deemed to form part of the public domain:

(a) roads and streets, canals and railways; and

(b) seashores, port installations and lighthouse; and

(c) buildings specially adapted for public services such as fortifications and churches.

 

 

Joint Ownership

In some systems it is a type of ownership of land by two or more persons in which each owns undivided interest in the whole. This kind of system, based on the kind of rules adopted by each and every country, may include starting from simple joint ownership of plot of land by two people up to ownership rights of hundreds of people in condominiums. In Ethiopia, the principle of joint ownership right is governed by the civil code or other land related recent laws as the case may be. Under the civil code (articles 1257 ff.) it is stated that joint ownership right may be determined by agreement of the parties. In the absence of such agreement the law presumes equal right to the thing. The right can also be freely exchanged, subject to the limitation of pre-emption, however. As a special case, a joint wall of two real properties is considered as a joint property in the code. In condominium or other such related buildings, common walls, roofs, parking lots, stairs and corridors are jointly owned and administered by the users of the building or their association.

 

 Common Ownership

Property owned in common by husband and wife each having an undivided one-half interest by reason of their marital status. Common property in the FDRE Family law is the category of property within the marriage other than private property of one of the spouses. The nature of common property is that it can not be divisible and each of the spouses has equal right to the whole property. Hence the law demands joint consent and agreement for the sale, exchange, mortgage or donation of common property. In today’s Ethiopia husband and wife commonly possesses urban and rural land. Especially in rural areas, during divorce the farm land is being equally divided between the man and the woman.

 

Additional Reading

 

The concept of ownership is basically understood in the continental system as an absolute one while in the USA it is conceived as bundle of rights. In the following additional reading attached to elaborate more. Students are advised to read the whole article.

John Henry Merryman

Ownership and Estate (variations on Theme by Lawson)

48 Tul. L. Rev. 916, 918, 924-25, 927-28 (1974)

 

…Productive comparative study of the land law in civil and common law jurisdictions is difficult-perhaps impossible-without some understanding of a fundamental difference that can be summarized by saying that the former is a law of ownership and the latter is one of estate. While it is probably true that a few lawyers in either system know that there is a difference and that it is important, few have gone much beyond this general impression. In this essay, I attempt to provide something more substantial by discussing the differences between ownership and estate in the two systems and, more specifically, in the land law of Italy and that of a more or less typical common law jurisdiction in the United States. Italian property law is not exactly like that of any other civil law nation, but it probably comes as close to a "typical" civil law property system as any other and closer than most. Much of what is said here is accordingly applicable to the land law in other West European nations and throughout Latin America.

 

…Ownership is, as concepts go, a very powerful one, and those who employ it pay its price. The land law of Italy and other civil law nations, based firmly on Roman law, is a law of individual ownership. It is part of the tyranny of the concept of ownership that it strongly resists fragmentation. To say that I own a thing is to imply that you do not, for if it is yours how can it be mine?' Such thinking thus tends to eliminate all intermediate possibilities between ownership and non-ownership. Consequently, when it becomes desirable to equate power over land with more than one person it seems preferable to do so by a device which, at least apparently, avoids dividing ownership. In every transaction ownership must be transferred in toto or not at all.

 

This, although simplified, gives some of the flavor of ownership in the Italian land law. Although its non-legal composition may vary from time to time with social and economic change, legal ownership remains exclusive, single, and indivisible. Only one person can own the same thing at the same time. But, since the requirements of society are such that power over land must frequently be divided between individuals, it becomes necessary to rationalize the dictates of theory and the requirements of practice.

 

The inconsistency between ownership and fragmentation can, of course, be exaggerated. Even in the civil law, land can be "owned" simultaneously by two or more persons in comune, a form of co-ownership much like our tenancy in common. But a functional division between beneficial and security title, or between legal and equitable title, or a temporal division into present and future estates, simply does not exist. Ownership is, in theory, indivisible in function and time.

 

The contrast with English theory is remarkable. In England, ownership resided in the king, and the distribution and retention of lands throughout the kingdom was carried out according to the theory of tenure. Those who actually occupied and used the great mass of English land were not owners of it but holders of derivative rights from the king or from the king’s tenants, and hence English land was concerned not with ownership and the rights and duties of owners but with tenure and the rights and duties of tenants. The concept of ownership simply did not come to into play.

 

This basic difference between Romanic ownership and the Anglo-American "estate" or "interest" in land can be illustrated by a simple metaphor. Romanic ownership can be thought of as a box, with the word "ownership" written on it. Whoever has the box is the "owner." In the case of complete, unencumbered ownership, the box contains certain rights, including that of use and occupancy, that to the fruits or income, and the power of alienation. The owner can, however, open the box and remove one or more such rights and transfer them to others. But, as long as he keeps the box, he still has the ownership, even if the box is empty. The contrast with the Anglo-American law of property is simple. There is no box. There are merely various sets of legal interests. One who has the fee simple absolute has the largest possible bundle of such sets of legal interests. When he conveys one or more of them to another person, a part of his bundle is gone.

 

This basic difference has several possible theoretical consequences. First, tenure seems to be a more flexible concept than ownership. Consequently, it might be expected that the number and variety of institutionalized interests in land will be greater in tenure than in an ownership property system. In short, improvisation is likely to be inhibited by the theory of ownership and encouraged by that of tenure.

 

The much greater variety of permissible future interests (vested and contingent remainders, executor interests, powers of appointment, reversions, rights of entry, possibilities of reverter) in the common law than in the civil law (where they really do not exist) supports this prediction. It is further supported by the existence of the trust and the concept of separate legal and equitable interests and by the distinction between security interests and beneficial interests in and, both found in the common law but not in the civil law.

 

Last modified on Monday, 23 November 2020 19:27