Property : Week of February 4

Reading for

• Back on Cox
  The court cites the "rule of reason" to let Cox off. They read an element of scienter into the statute, on the theory that to do otherwise leads to absurd results.

  This is contrary to the "plain meaning rule," of course.

  Remember, our purpose here is to deal with statutory interpretation, not to make some point about prohibition, etc.

  Arguments pro Cox (Rule of Reason):

  • The rule of reason is the principal statutory reason (Kirby). this case will be a great citation for the Rule of Reason.
  • Policy drives everything in the law, not technicality. This is why we have courts interpreting the statutes, incidentally. This is an exercise in reason, not an exercise in English, otherwise we wouldn't need courts. The opposite of the Rule of Reason (the Plain Meaning Rule) doesn't just defy policy in this case, but there's no plain meaning here. "Possess" in dictionaries often gets defined as including an element of understanding. So maybe the Plain Meaning is proper, and the majority's ruling isn't a distortion of the statute after all. All the words in all the statutes are ambiguous at least a little: the meaning is never plain, so let's get on with the policy analysis, not just robotically seek out the first definition in the dictionary.
  • Even if the meaning is plain, though, some courts can deviate (c.f. Cardozo), because the policy is so overwhelming. There's always some judge who doesn't follow the plain meaning. So we still wouldn't know "what the statute means:" plain meaning and legal precedent arguments are sort of quicksand. If the rule doesn't apply across the board, then why worry about it at all?
  • Often times, one gets the sense that the court is stating plain meaning. How likely is it that the court really cares what Justinian, e.g., says? Perhaps they are merely looking for a source for masking their policy grounds. Basically, they are going to announce a policy finding without having to say what the policy is (and thereby expose themselves to criticism). So the Plain Meaning Rule is sort of like precedent: it's a way that courts pretend to be bound, but it actually functions as an escape hatch for courts to do what they want. But it would be better if rules were articulated so that we could debate them, so the Plain Meaning Rule should be kicked out.
  • And besides, legislatures want courts to apply common sense in interpreting what they wrote. (Common sense is a synonym for policy, by the way)
  • Things other than the Rule of Reason which work in favor of Cox:
    • Llewellyn #2: This statute is in derrogation of the common law (i.e., it's not a Real Crime to possess alcohol). When a statute derrogates from the common law, the basic principles should continue on, and the statute should be narrowly construed (i.e., so as to require scienter).
    • Llewellyn #6: Statutes relating to the same subject should be construed together. Nearly all crimes require mens rea. When we look at other statutes, we see a mental element. We should not deviate from this pattern.
    • Mermen ? : criminal statutes are construed narrowly against the state.
    • Mermen ? : any statute that raises Constitutional debate should be construed in such a way as to minimize the fuel for debate. Oregon's interpretation of the statute comes too close to violating Constitutional protections, so Cox's interpretation should govern.
  • A couple others. The word "possess" includes "knowingly possess." This is the finding of Hannah v. Peel. That's distinguishable, of course, but it supports Cox. Likewise, there are very few exceptions to the requirement of mens rea in criminal law (and the exceptions are hotly debated). Finally, Oregon's citation of the 58,000 Cigars case needs to be dealt with: it's not a criminal case for one thing, plus the captain was roaring drunk (which is a dereliction of his duty, which is not here in Cox), plus the captain is supposed to have control over what's in the ship (whereas a porter doesn't get to say what goes in the luggage).
  • Strict liability causes fear of the state (rightly!). This isn't a crime that a cautious person could be sure of avoiding.
  • And now the Oregon side of the case:
    • The Plain Meaning Rule. Why is this so often cited? Precedent, for one thing. We're supposed to be bound by precedent. Why do we want this? Because we want to be able to read a statute and know what it means. When we read statutes, we should avoid getting pulled into a big policy debate-- we need to be able to know what a statute means, rather than have to wait for a court to announce it. We should look to the legislature to write meaningful laws that tell us what they want. If we're not going to do that, what is the point of having a legislature? Judges aren't supposed to make laws. Lawmakers are. #12 from Llewellyn is the Plain Meaning Rule.
    • Also #6: statutes in pari materia should be construed together. It's not like this is the only strict liability statute (e.g. statutory rape). Why should we ignore the possibility that this is one, given that the legislature has made others?
    • Oregon has plenty of precedent to cite. Shaw for example, the fishermen didn't know whether there were fish in the traps when they began, but they were found liable. Likewise some of the precedent cited in Hannah v. Peel: the ring is yours even if it's in the bottom of your pond and you didn't know about it.
    • We want certainty in the law, so we shouldn't go inserting ambiguity. "Knowledge," which we want to put into the law, is really just a degree of belief. How much must you "know" something? How reasonable must a belief be? What about this "reasonably suspect" phrase in the concurring opinion? Deviate from certitute in statutory interpretation, and you sink into the quicksand.
    • We can rely on executive dispensation (i.e., gubernatorial pardon) to take care of any undue hardships. It's not just the governor, though. The prosecutor has the option not to prosecute. The judge, also, has some discretion (i.e., sentencing). And the jury can decline to convict. All of these are reasons not to worry about the system running amok and jailing all porters.
    • Prohibition's goal is to eliminate alcohol. If we don't go after the porter, we can't go after Al Capone later. How are you going to get the big people, if you don't have leverage over the little people to make them identify the real smugglers? Now, note that this puts the porter at risk of sanctions way worse than court-imposed ones. Finger Capone, and all manner of bad things might happen to you.
    • Also, there's policy. A majority of the voters strongly support prohibition (at that time). We can say, in retrospect that it can't work in a free society. Heh... it CAN work in a non-free society (c.f., Afghanistan). We undermine democracy, though, if we ignore the will of the people.
    • Consider the cost to society of alcohol: health issues, damage to property, crimes againt people, non-productivity, etc. More than 50% of crimes in the US are committed by people under the influence of alcohol. Add in drugs, and you get close to 90%. Why is life expectancy for men in Russia in the 50s?
    • The tail wagging the dog here is really attitudes towards prohibition, even though it's not actually mentioned. The art of being a good lawyer is the art of weaving policy into precedent and other forms of persuasion.
• Llewellyn's article on statutory interpretation does for statutes pretty much what he did for precedent in the earlier article. It's all just invitations to debate.
• "We all know what the sydnicate is, we just can't prove it."
• Zech v. Accola
  What options are available to courts when they confront a stupid statute, and what do they do?

  So Zech is super-honest, but a quarrel breaks out anyhow. "We want the money" is not a compelling argument. But maybe the defendants can assert that the money was intentionally donated. The court says that won't fly.

  They don't make the argument that Zech's turning in the money was a gift, and therefore irrevocable. But a gift requires intention to give (not just handing something to someone for safekeeping).

  So they hire a lawyer, who spots the fact that she did not tell the town clerk, get an appraisal done, get the appraisal filed in the official record, post signs, etc. So she was scrupulously and foolishly honest, but not legally honest. :) So the money is supposed to be given half to the town and half to whomever turned you in. Worse still, if the true owner turns up after you've given the money to the town and the charity, you owe them the value of the property: i.e., you *lose* money.

  So this is a dumb statute. It penalizes people for being honest. The red tape that's involved will often exceed the value of the property. What is the difference between the "most public" place and just a "public" place (both phrases are used, so there must be a difference)? What does it mean to get cash appraised? Who is the town clerk, if you don't happen to live in a town? Plus, in all cases, the town will take 50% of the money! This actively incents people not to turn stuff in. Plus, it pays informants! An awful statute.

  OK, so what do we do with a foolish statute? The lawyer was pretty smart to find this.

  Fortunately Zech's lawyer is also smart: he re-frames the issue by appling Llewellyn #2, and saying this is a treasure-trove, not found property.

5 February

• Again with statutory interpreation and Zech
  So "treasure trove" isn't lost per se: it is deliberately hidden, and then forgotten about. Like pirate gold buried on the beach.

  So why might a court favor Ms. Zech? See Hanna: rewarding honesty, encouraging people to find stuff, etc.

  What other arguments might there be? Quizvictim says that the statute is "unfair." What does that mean? "Not fair." Excellent argument. This is a word without a meaning: it just means that the result seems bad to us. Saying "Zech should win because the statute is unfair" is just a restatement of "Zech should win."

  What should we do if we confront a poorly-drafted statute? You could revise it, but you'd be pretty busy if you wanted to fix all problems (most revisions are formal, not substantive). Generally it's up to the courts to figure out what to do. The court can say it's senseless to apply the statute, and decline to apply it.

  The Rule of Reason tells us that this statute wasn't meant to be followed completely 100% literally-- you should just follow the intention of the statute. Does the statute cover "found property" (this would include treasure trove) or "lost property" (which would not)? If a statute includes terms that conflict between the title and the body of the statute, we follow the body. So you could argue that treasure trove is not lost property. It's a little artificial, but Llewellyn #15 says that technical terms will be interpreted using their technical meaning.

  So "treasure trove" is a long-established concept. The court actually cites the WI Constitution. Might as well bring out the big guns. The citation is of a passage that says "just because we're a new state doesn't mean we're wholly without laws." The received law of WI is still in force, unless explicitly overridden by statute. This statute limits and derrogates the common law (Llewellyn #2), so it should be construed strictly. And treasure trove is part of the received law of WI. Also, the plain meaning of "lost property," when we take the legal understanding of treasure trove, is that it's not lost. So. Zech should win.

  Note statutes are trying to protect the true owner, up to a point. But if it's treasure trove, the true owner is pretty much gone.

  OK, what about arguments against Zech?

  For most of us, "lost" would include treasure trove. That's the plain meaning of "lost" (though, as discussed above, not the plain meaning of "treasure trove").

  Also South Staffordshire Water: Zech is a worker for the Ladies Aid Society, so the found property should belong to the employer.

  If this is a foolish statute, appeal to the legislature-- don't ask that the court rewrite policy.

• Chung Fook v. White
  A classic Plain Meaning case: the statute says something that is plainly absurd (extending rights to naturalized citizens not granted to native citizens). Will a court apply the law literally or not?

  Appeal to congress, bub. We're here to carry out the law, not apply common sense.

  But is the Plain Meaning Rule being applied, when a court says it is? Well, maybe this is the court saying that they don't want more Chinese in the US (i.e., a policy result that wouldn't stand scrutiny today, but had support at the time).

• The Zambian cases:
  While Prof. Church was in Zambia, the legislature passed a dumb statute (anti-rustling). It's overkill-- it doesn't address only organized/mass-rustling. The penalty for stealing a single baby pig is set equal to that for keeping a human slave. Way too extreme. Maybe that would be OK for mass theft, but all of a sudden the courts are faced with having to deal with many uncontemplated situations.

  Lubinda: plain meaning-- the penalty is harsh, but it is what it is.

  Sialubi and Mulinga: the court fiddles with the facts (didn't really prove that the animal wasn't just borrowed; never proved that the animal was alive when taken).

  Results are all over the map: three people do the same thing. One gets 7 years. One gets 1 year. One gets off free. Where's the precision here?

  This is one of the dangers-- when a statute is plain in its meaning but foolish in its policy, there's no way to predict how courts will react. A court has lots of options when confronted with statutes. It can ignore a statute (lawyers can't do this, but courts can), but this is rare. It can fiddle with the facts. It can fiddle with procedure (i.e., back to square 1, we'll see you in 10 years when this comes back up); we don't have examples of this in our materials, but it does happen. Another option is to find ambiguity in the statute (this can be pretty easy), and therefore argue that the plain meaning rule is irrellevant. If you can't find it in the statute, find it in the legislative history. Scalia disfavors this: he thinks legislators seed the record because they know there will be litigation and they want to provide ammo to their side.

  If necessary, the rule of reason can be used for attack. Or if you really want to sledgehammer it, rule that it's unconstitutional. And of course there's always the option of just acquiescing, and applying the statute. This happens all the time, although the results don't make it into law school course materials. So if you are up against a bad statute, maybe you're better of not litigating.

  Statutory interpretation is a good arena for policy debate.

• For the next few weeks, vocabulary lessons are part of the agenda: we need some new technical terms if we're going to do Property law. There's some substantive content as well: we need to know how to make a will and a gift, etc. And along the way, we'll also be taking a sort of abstract look at the role played by rules of law (i.e., the hornbook); how powerful are they in reaching a decision? The answer: rules are very powerful, but ambiguous.
• Five categories of transferring property at death. They all have the intention of transferring property when the owner dies. In all cases, the donor must intend the transfer. And in all the cases we see, the donor does intend:
  1. Gift: can be given now, or later. This requires:
     • Intent: you have to intend to make a gift. If there's doubt here, then there's no gift. We protect true owners
     • Delivery: defining this will be an issue.
     • Acceptance: this is axiomatic. If the recipient doesn't want the gift, they won't be in court contesting it.
  2. Will: don't give anything now, but have it happen later. Revocable up until death.
     • Intent: Of course
     • A writing
     • A signature
     • Two witnesses (in WI), 3 in some other states; and they need to sign a thing that says they were witnesses.
     • Acceptance: this is axiomatic. Once again.
  3. Trust: create a transfer this way
     • Intent: Of course
     • A trustee (but this could be you)
     • A subject: the thing to be given
     • An object: the beneficiary
     • Terms and declaration
  4. Contract: we are experts
     • Offer
     • Acceptance
     • Consideration (not required in many civil law systems; maybe we should be nervous about whether it's a big deal or easy to define). Look how eloquent Corbin waxes at the end of his article on p. 49: why isn't this more simple? He's Mr. Contract himself, the author of the most influential hornbook ever written. So much for certainty...
  5. Co-tenancy: just create the other person as an owner (of the whole property at the same time, with approximately equal rights of use)
     • Intent
     • Acceptance
     • One of two things:
       • Tenancy in common: ownership in common (of personal property, real property, etc.). Equal access to, and use of property while all are alive. After the death of one tenant-in- common, the share of the deceased remains in the deceased's estate (i.e., can be willed to someone else).
       • Joint tenancy: just the same, except at the death of one tenant, the interest of the deceased passes to the surviving tenant(s). Anything that says "or survivor" is joint tenancy. Obscure additional requirement: the four unities! The whole point and origin of the "four unities" is lost to the sands of time-- some old English thing-- and we don't know what they mean.
         • Time: the two joint tenants have to take their interest at the same time (i.e., can't create joint tenancy after the fact)
         • Title: title to the property must be identical between the holders
         • Possession: both parties must have access to the thing
         • Interest: yeah.
• Note that with 5 options for transferring property, it's hard to know, sometimes, which you're dealing with. And if you call something a gift, have you painted yourself in a corner?
• Breitenbach v. Schoen
  The certificates here are sort of CDs or something. Anna Marie wants to assign them to herself, her son Peter, or the survivor.

  The "or survivor" language is synonymous with co-tenancy.

  She tries to accomplish this goal by writing a note to this effect on the back of the shares. That's with the first four certificates, which were purchased earlier.

  Now she buys five more, and declares this wish at the time of purchase.

  All the certificates are kept in the son-in-law's lockbox (in his house, which is on her premises... we don't know who owns what in this case).

  Breitenbach (another child) contests the joint tenancy, and wants the certificates to be part of the estate (so she can get 1/3). She attacks on the basis of the Four Unities! And Shcoen is missing three of them, according to the court.

  Whenever a court says "manifestly," they really mean "I can't explain this."

  Hilariously, the court rules that this is an undelivered gift, actually (making all the "four unities" reasoning mere dictum).

6 February: Canceled due to snow

7 February

• Note that any one of the five formal modes of transfer could have applied to Breitenbach's case. This will be true for most of the cases we see in this area. But the forms of each are different, so it matters what you call things.
• She may have thought she was creating joint tenancy, but the first four certificates fail because of the mysterious four unities. She had different access to the lock box than he did, for example, etc.

  In cases along these lines, when WI has acted with common-law rigidity, they sometimes will try to soften the law so that peoples' wishes can just be effectuated. For example, they've abolished the unities of time and title.

  So anyway, you'd think that the other five certificates would be OK, because there's no unities problem. But if you create co-tenancy without consideration, you need to meet the gift formality. And there was no delivery here. So Peter takes nothing-- it's all just part of her estate and her will (or intestacy) controls.

  This can't be a will, itself, because there were no signing witnesses, etc.

  Tenancy in common is easier to create than joint tenancy. You don't need the four unities, and you don't need specific language.

  Note that you could call this a contract, but this is not attempted. Why is consideration required in a contract, by the way? Why would a person not be bound by their word? This is like the four unities: nobody really knows the deal with it. But note that "peppercorn" consideration, an end- run on the consideration requirement (by giving a peppercorn), seems to be sufficient at least some of the time. Now, the first words on the backs of those first certificates are "for value received." Sounds like a recitation of consideration.

  Lawyers are notaries public in WI, and you can get a seal! Yay!

  But anyway, consideration is supposed to be for FUTURE services, not past services.

  Could this be a unilateral contract? Or a third-party beneficiary contract? (i.e., the contract is between Mrs. Schoen and the savings institute, and payment to the third party-- Peter-- is just one of the terms of the contract) That's plenty legitimate.

  Back with the program. It can't be a gift because there was no delivery. What does "delivery" mean? It means "gift." It means "completed transfer." We need to find something that got given. Just like the four unities, if we can't say why we require delivery, we can't really say what we're looking for here. The delivery is required so that the donee knows that he's been given something. Also, the donor has clear indication-- caution-- that the gift is really real. And the rest of us need to know, too.

  We do this to protect ownership. Ownership is the backbone of the economic system. We want to make sure that property is disposed of as owners wish. That's why the form. That's why delivery came to be required.

  But we have those things in this case: we have no doubt that she wanted to transfer the property to Peter, Peter knew about it and believed it was his, and the rest of us knew too. So a peppercorn (i.e., whatever we can find) will do: this is merely a technical formality. If delivery is what stands in the way, we should have the vision to find some. She gave physical property (not to Peter, but to Reno). She took deliberate physical steps (going down to the bank to sign the certificates). Peter could argue that Reno is his agent, so he did have possession.

  So at least some courts will find that delivery is not required for the creation of joint tenancy: it's an empty ceremony. You can also substitute a deed for delivery. Would Schoen's writing of "under my hand and seal" count?

  So why is the WI court so petty here? Are there reasons for what they did?

  Well, the other siblings didn't know the status of the certificates. Maybe we don't want to promote secret favoritism relationships within families. Counter-argument: huh? if an owner wants to secretly dispose of property, that's OK-- it might not be what we'd like to see in a normal happy family, but there you have it.

  Also, though, Mrs. Schoen's creditors (and tax collectors) need to know who owns the certificates: otherwise they might extend credit, or overtax, based on the mistaken belief that their assets are still hers.

  Plus, having an actual physical transfer of some sort is a good simple thing, like in Pierson v. Post: we like easily evaluated conditions.

  And, after all, the hornbook says you need delivery. If we abandon the conventions that everyone knows, we introduce uncertainty. If we fudge with the definition of delivery, we undermine that clarity.

  Maybe, lurking in the background, is the notion that we want the siblings to be equal. We like egalitarian "fair" things.

  There is the possibility that Peter is scheming with Mrs. Schoen. Maybe he is hovering around, trying to cut other siblings out of their inheritance.

• Breitenback stands for formality above everything (just like Pierson stood for physicality above everything).
• In re Staver's Estate: overrules Breitenbach (just 11 years later). British courts don't overrule one another-- they distinguish cases from one another, which amounts to the same thing, but they don't overrule the way US courts do. A joint bank account is sort of a poor person's will: it's the way a lot of people (couples) transfer money at death. There's no need to go through probate, etc., and proving ownership is often easy. There may be a rat lurking behind this case as well: why does the executor want this in the estate? So creditors can get at it. Delivery is not required with a joint account: says the court, says the legislature, and also they trot out the third-pary beneficiary standard.
• So Breitenback is dead, as far as its specific holding. But it still works insofar as saying "formalities mean formalities."
• In re Roosevelt's Will: show us a formality, and we'll show you a way around it. An inter vivos gift: I will give you my pen, effective when I die. The gift is made now. A testimentary gift is made via an instrument like a will. causa mortis - an inter vivos gift that is revocable because it is based on the mistaken belief that the donor is about to die (i.e., made upon deathbead, but then the giver doesn't die). A "gift in contemplation of death" is an inter vivos gift, but it's one that the tax collector decided was made in order to avoid taxes: tax on estates is (or at least was) higher than tax on gifts. For some reason, instead of just making the taxes on gifts and estates the same, they say that if a gift is made within 3 years of death (regardless of the kind of death-- like, e.g., meteor strike), it gets taxed as though it is part of the estate. So the main advantage of giving away property is eradicated. Still, people think about it, and they sometimes try to systematically give away their property as death approaches.

  Anyway, FDR gave his papers to the FDR Library (a contributor/federally funded foundation). This was the first presidential library, and every president since FDR has done this. They're all controversial, because not everyone likes the president, and doesn't see why they need a heroic monument of this sort.

  So Roosevelt declares the gift as loudly and formally as possible, and actually signs a joint resolution (essentially a law) to this effect. There's no doubt about intention, but there is a doubt about delivery, because he died in office. He knew he was going to die in office, incidentally-- towards the end of his life he was only functioning a couple of hours per day. As a result, some papers did not get delivered. And then his estate wants them (the executor).

  Why does the executor not just let it go to the library? The executor has a fiduciary duty to the beneficiaries of the estate, and can be sued for being generous to non-beneficiaries. So it has to go through the court: they don't want to be casual about it, even though they all want the same thing. A colossal waste of money, incidentally, which the estate must lay out.

  Note that presidents get tax deductions for these donations.

  So we could say it was contract, or that the papers were already in the public trust (because they were in the White House which is owned by the people). But these would be sort of insulting to FDR, so instead they gut the notion of delivery.