#5296 - Relativity Of Title - Personal Property Law

Relativity of Title

There are different rules in relation to title in respect of corporeal and incorporeal chattels

Corporeal chattels

Distinction between possession in fact and possession in law

Factual possession means that a person has exclusive control of a chattel and intends to exercise that exclusive control. Legal possession is an interest in the property, independent of ownership or a right to possess, which gives a legal right to protect and enforce factual possession.

An owner has ownership rights and the best right to possession.

A person who has exclusive control over a chattel has legal possession and an incidental right to possess. Legal possession enables the person to protect their exclusive control and factual possession.

A person who is a bare custodian may physically have the chattel, but they do not have exclusive control and so there is not factual possession and so there is not legal possession.

If a thief steals from a bare custodian then the custodian is not able to sue to regain possession. It is the person who had legal possession that has a right to possess enforceable against the thief.

Pollock and Wright explain legal possession as a protected state of affairs.

The right to possess is a concept which will depend on whom a person is and whom they are asserting rights against.

The owner does not have always have legal possession despite having the best right to possess. Legal possession is the right to protect existing factual possession.

Pollock and Wright summarise possession as meaning that there is prima facie evidence of ownership enforceable against a mere wrongdoer interfering with possession.

A person who finds a jewel and takes it into his possession has gained legal possession, and so this can protect his factual possession against interference by anybody except the true owner (Armor v. Delamirie)

Fox says that Armor v. Delamirie means that whenever a party has a stronger right to possess they have relative title and can protect that through an action for conversion.

Fox says that Pollock and Wright simply explain the right to possess as incidental to ownership to tidy up the law. The strongest relative right to possess is all that is important. Fox believes that Pollock and Wright mean that legal possession is evidence of title to possess against third parties who cannot prove better title.

A bailee has exclusive control and intention to exercise that control. They have legal possession and so can sue for damage to goods to which they have legal possession even though there is definitely another owner and the bailee does not lose anything as a result of the damage (The Winkfield)

Costello

A car thief was acquitted but the police retained the stoledn car they had seized so the thief was able to sue in conversion. Although there was authority for the police to seize the car initially, it was no longer valid authority after the equittal. From that point the retention of the car was illegal.

This is not a violation of the rule against claiming on the basis of an illegal act. That only applied if the claimant has to plead their illegal action to make the claim. Here the claim existed because of the unlawful retention.

Establishing factual possession for chattels is judged on the situation; to what extent does the person have exclusive control and an ability to exclude others.

Establishing possession by finding

Possession can be established by finding (Armor v. Delamirie)

The finder must take the property into his factual possession. It is not sufficient to merely discover the property.

To take the property into his factual possession the finder must commit the tort of conversion against the true owner. If the finder is taking reasonable steps to find the true owner this has not happened. Only when the finder ceases to seek the true owner will he take the property into his actual possession and commit the tort of conversion. At this point the limitation period starts to run, giving 6 years for the true owner to claim or his title will be extinguished (Limitation Act 1980 s.3)

If a chattel is found in or attached to land in the possession of a third party then the chattel is deemed to be in the actual possession of that party (South Staffs Water)

South Staffs Water means that a possessor of land is able to possess chattels without knowing. However that is probably sensible on a policy basis: don’t want random people coming in and digging up my garden, interfering with land hoping to find things.

If the finder takes property despite it being in the legal possession of the possessor of land then the possessor of land will have good title against the finder until 6 years have passed from the date of conversion (LA 1980 s.3(2))

But the South Staffs Water rule does not apply to property found on the land or in a building. It applies only to property in the land or attached to the land.

Parker v. British Airways

A bracelet was found by Parker in the BA lounge. This was taken and handed in on the condition that it be returned if the true owner was not found. Parker had taken actual possession, and the fact that it was found in a building operated by BA did not give them possession as they were not exercising sufficient control.

Although cleaners had to hand in all property found, this did not matter in respect of Parker. There would have been effective control, and so BA would have had actual possession, against the cleaners. But not against Parker. There must be manifest control of the object. This existed in respect of the cleaners but not Parker.

Parker v. British Airways said that in a park, an extremely strong degree of control would be required for a possessor of the park to possess objects left in the park. The opposite would be true of a vault.

When land is owned by a landlord not in possession then the landlord has no claim in possession to anything found on premised being leased as he did not have possession of the land when possession was created. There could only be a claim if the property was there prior to the grant of the lease, when he did have possession (Hannah v. Peel)

Treasure trove

There is an exception for treasure trove. For the purposes of treasure, precious metal means gold or silver. The crown has a right of ownership to found treasure.

Treasure is any object which is at least 300 years old when found and which EITHER is not a coin but has metallic content at least 10% of which is precious metal OR it is one of at least two coins in the same find which have 10% precious metal OR it is one of 10 or more coins in the same find (Treasure Act 1996 s.1(1)(a))

Treasure includes any object found as part of a find which includes an object independently classed as treasure (Treasure Act 1996 s.1(1)(d))

The Treasure Act 1996 got rid of the need to prove intention to return, and includes property which may have been abandoned. This removed some of the ridiculous arguments on the point (an example of these is British Museum)

Relativity of possessory title in detail

The original rationale behind relativity of title was that the common law is not concerned with the question of ultimate ownership and merely wanted to resolve the dispute before it.

This is sensible, because the decisions of the court are only binding between the two parties and cannot bind third parties. It would also be much more difficult, time consuming and expensive for the claimant to prove that he was the original owner. Also it protects the state of settled possession: just because somebody is not a legal owner should not mean anybody can take possession from them (anti-anarchy). There is also a presumption against the wrongdoer, this is a circular definition but Fox believes it is practically useful.

At common law it was possible to plead...