Can rights be owned?
This essay discusses whether right can, or should be owned. It concludes that, for reasons of commercial efficacy and growing importance of incorporeal rights, rights should be capable of being owned. Achieved a first class mark.
Content
Can rights be owned?
LS2008 Property Law By: Anjan Neupane The University of Aberdeen October 2009 Submitted to: Professor CG van der Merwe
1
Roman lawyers’ classified law into different headings, the most important is the distinction between the law of things (res) and the law of obligations (obligatio).1 According to Gaius, things (res) include both res corporales and res incorporales.2 To quote Gaius himself,” Incorporeal things are such as are not tangible, and are those consisting merely of rights...”3 This follows that, things can be owned. If rights are things, then rights can be owned. However, German Law the position is different, “Only corporeal objects are things as defined by law.”4 Following this approach, rights cannot be owned. The aim of this work is to try to reconcile and streamline dogmatic issues with practical problems and investigate which is the best approach to adapt. Whichever scheme we choose it will hurt common speech. Legal concepts are rarely made with common speech in mind. Applying the Gaius approach, it follows that rights can be owned. We frequently speak of owning company shares, government bonds and patent rights, it sounds perfect. In the case of some rights it sounds odd to speak of ownership. Normally we do not say that, we “own” a claim in delict, we “own” a contract or we “own” ownership. The word “have” or “hold” seems more natural. The word “have” can be used as a fundamental legal concept, meaning the relation of a person to a right.5 However, there are many instances where men do harm legal concepts in common speech. Take for example, anti-war activists calling George Bush a murderer, although, in a legal sense his acts may not fit the definition of murder. There is nothing wrong if Germans speak of owning shares although it is not technically possible. The modern day global economic importance has shifted from corporeals towards rights. Possession is no longer necessary to be wealthy, legal protection of a right is sufficient. Bill Gates is not richest man in the world because he owns a billion acres of land but because of his shares in Microsoft. In the new world economy research, innovation, patent, intellectual property and stock markets have more importance than car, farmland or rivers. Corporeal DVD is worthless without the incorporeal software. For a common man owning shares in more important and practical than having a problem with owning ownership. The concept of owing right has another limitation depending on the legal system. Supposing that, A contracts with B to sell his car for £100. A has the real right (owns) to the debt, B now
1 2 3 4 5
Nicholas, An Introduction to Roman Law (Oxford, 1975), page 98 Gaius Institutes II, 12 Gaius Institutes II, 13 Article 90 of The German Civil Code (Bürgerliches Gesetzbuch) Gretton “Owning Rights and Things” 1997 Stellenbosch Law Review 176
2
has the real right (owns) of a performance under the contract to handover the car. Now, A disagrees to transfer the car anymore. B has two options, claim for damages or demand specific implement. In Scots law specific implement is a legal right, 6 in English law it is an equitable remedy.7 Real right is a relationship between a person and a thing, right enforceable against the whole world at large (absolute right). The scheme of owning rights does not necessarily apply to England, because if A does not want to transfer the car he can pay damages and get away with it. In England, real right (right is contract, if it can be owned) is not very real (absolute) after all. In Scotland, A can be forced to perform; therefore, the right to force the transfer of the car is an absolute (real) right. Due to the relative absoluteness of a personal right in Scots law, it might not be detrimental to have real right in a personal right. Introducing the concept of patrimony might help us avoid claiming that all contractual rights are my property. Patrimony is the summation of all real rights and personal rights. 8 In German law, law of obligations together with property law forms part of civil law proprietary rights.9 Suppose, you owe a debt of £100,000 to the bank for the mortgage, a friend owes you £1,000 and the value of the house you own is £150,000. Supposing that you are unemployed, the value of your patrimony is £51,000 (£150,000+£1,000-£100,000). Gretton claims that this concept if introduced together with the “have” approach (discussed above) can sharpen the blurred lines between property and obligation.10 I doubt it. It is very hard to describe the situation “I owe a debt to the bank” without the owe-own approach. Saying that “My patrimony is to pay money to the bank and get money from the friend” is a waste of words. This concept can be used during bankruptcy but not while describing property rights. This concept further blurs the distinction between real rights and personal rights, melts it in the same pot. There are a lot of limitations to describing personal rights in terms of real rights. In many instances it is misleading, if overdone, can make simple situations complicated. Classifying rights as things should only be done in one occasion, where there is a dispute on who is the rightful holder of right.11 For example, if A cedes his debt to B, then fraudulent cedes the same debt to C. There is a competition between B and C to who holds the right to the debt. Property law is useful to identify who the owner of the right is. The internal relationship
6 7
Retail Parks Investments Ltd v Royal Bank of Scotland plc (No 2) 1996 S.C. 227 Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 8 Gretton “Owning Rights and Things” 1997 Stellenbosch Law Review 176 9 N Foster, German Law and Legal System (Blackstone, 1993), page 238 10 Gretton “Owning Rights and Things” 1997 Stellenbosch Law Review 176 11 Reid, “Obligations and Property: Exploring the Border” 1997 Acta Juridica 300
3
(between the creditor and the debtor) is governed by the law of obligations while the external relationship (between the person and his right) is governed by the law of property. There is a practical importance of this approach and we can draw a clear boundary drawn between real rights and personal rights. Rights can be owned. It is useful and also logical that there should and can be real rights over personal rights because its usefulness when there is a dispute regarding who is the holder of the right. Alternative concepts of patrimony of a person and the “have-hold” approach also have its own limitations. Whichever approach we take it is bound to neglect common speech to certain extent, owning rights does less violence than other the approach. Due to the reality of new knowledge based global economy it is more relevant to own rights than not.
4
Bibliography Barry Nicholas, An Introduction to Roman Law (Oxford, 1975) FS Cohen, “Transcendental Nonsense and the Functional Approach” 35 Columbia Law Review 809 George G Gretton “Owning Rights and Things” 1997 Stellenbosch Law Review 176 Kenneth GC Reid, The Law of Property in Scotland (Butterworths, 1996) Kenneth GC Reid, “Obligations and Property: Exploring the Border” 1997 Acta Juridica 300 Nigel Foster, German Law and Legal System, (Blackstone, London 1993)
5
LS2008 Property Law By: Anjan Neupane The University of Aberdeen October 2009 Submitted to: Professor CG van der Merwe
1
Roman lawyers’ classified law into different headings, the most important is the distinction between the law of things (res) and the law of obligations (obligatio).1 According to Gaius, things (res) include both res corporales and res incorporales.2 To quote Gaius himself,” Incorporeal things are such as are not tangible, and are those consisting merely of rights...”3 This follows that, things can be owned. If rights are things, then rights can be owned. However, German Law the position is different, “Only corporeal objects are things as defined by law.”4 Following this approach, rights cannot be owned. The aim of this work is to try to reconcile and streamline dogmatic issues with practical problems and investigate which is the best approach to adapt. Whichever scheme we choose it will hurt common speech. Legal concepts are rarely made with common speech in mind. Applying the Gaius approach, it follows that rights can be owned. We frequently speak of owning company shares, government bonds and patent rights, it sounds perfect. In the case of some rights it sounds odd to speak of ownership. Normally we do not say that, we “own” a claim in delict, we “own” a contract or we “own” ownership. The word “have” or “hold” seems more natural. The word “have” can be used as a fundamental legal concept, meaning the relation of a person to a right.5 However, there are many instances where men do harm legal concepts in common speech. Take for example, anti-war activists calling George Bush a murderer, although, in a legal sense his acts may not fit the definition of murder. There is nothing wrong if Germans speak of owning shares although it is not technically possible. The modern day global economic importance has shifted from corporeals towards rights. Possession is no longer necessary to be wealthy, legal protection of a right is sufficient. Bill Gates is not richest man in the world because he owns a billion acres of land but because of his shares in Microsoft. In the new world economy research, innovation, patent, intellectual property and stock markets have more importance than car, farmland or rivers. Corporeal DVD is worthless without the incorporeal software. For a common man owning shares in more important and practical than having a problem with owning ownership. The concept of owing right has another limitation depending on the legal system. Supposing that, A contracts with B to sell his car for £100. A has the real right (owns) to the debt, B now
1 2 3 4 5
Nicholas, An Introduction to Roman Law (Oxford, 1975), page 98 Gaius Institutes II, 12 Gaius Institutes II, 13 Article 90 of The German Civil Code (Bürgerliches Gesetzbuch) Gretton “Owning Rights and Things” 1997 Stellenbosch Law Review 176
2
has the real right (owns) of a performance under the contract to handover the car. Now, A disagrees to transfer the car anymore. B has two options, claim for damages or demand specific implement. In Scots law specific implement is a legal right, 6 in English law it is an equitable remedy.7 Real right is a relationship between a person and a thing, right enforceable against the whole world at large (absolute right). The scheme of owning rights does not necessarily apply to England, because if A does not want to transfer the car he can pay damages and get away with it. In England, real right (right is contract, if it can be owned) is not very real (absolute) after all. In Scotland, A can be forced to perform; therefore, the right to force the transfer of the car is an absolute (real) right. Due to the relative absoluteness of a personal right in Scots law, it might not be detrimental to have real right in a personal right. Introducing the concept of patrimony might help us avoid claiming that all contractual rights are my property. Patrimony is the summation of all real rights and personal rights. 8 In German law, law of obligations together with property law forms part of civil law proprietary rights.9 Suppose, you owe a debt of £100,000 to the bank for the mortgage, a friend owes you £1,000 and the value of the house you own is £150,000. Supposing that you are unemployed, the value of your patrimony is £51,000 (£150,000+£1,000-£100,000). Gretton claims that this concept if introduced together with the “have” approach (discussed above) can sharpen the blurred lines between property and obligation.10 I doubt it. It is very hard to describe the situation “I owe a debt to the bank” without the owe-own approach. Saying that “My patrimony is to pay money to the bank and get money from the friend” is a waste of words. This concept can be used during bankruptcy but not while describing property rights. This concept further blurs the distinction between real rights and personal rights, melts it in the same pot. There are a lot of limitations to describing personal rights in terms of real rights. In many instances it is misleading, if overdone, can make simple situations complicated. Classifying rights as things should only be done in one occasion, where there is a dispute on who is the rightful holder of right.11 For example, if A cedes his debt to B, then fraudulent cedes the same debt to C. There is a competition between B and C to who holds the right to the debt. Property law is useful to identify who the owner of the right is. The internal relationship
6 7
Retail Parks Investments Ltd v Royal Bank of Scotland plc (No 2) 1996 S.C. 227 Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 8 Gretton “Owning Rights and Things” 1997 Stellenbosch Law Review 176 9 N Foster, German Law and Legal System (Blackstone, 1993), page 238 10 Gretton “Owning Rights and Things” 1997 Stellenbosch Law Review 176 11 Reid, “Obligations and Property: Exploring the Border” 1997 Acta Juridica 300
3
(between the creditor and the debtor) is governed by the law of obligations while the external relationship (between the person and his right) is governed by the law of property. There is a practical importance of this approach and we can draw a clear boundary drawn between real rights and personal rights. Rights can be owned. It is useful and also logical that there should and can be real rights over personal rights because its usefulness when there is a dispute regarding who is the holder of the right. Alternative concepts of patrimony of a person and the “have-hold” approach also have its own limitations. Whichever approach we take it is bound to neglect common speech to certain extent, owning rights does less violence than other the approach. Due to the reality of new knowledge based global economy it is more relevant to own rights than not.
4
Bibliography Barry Nicholas, An Introduction to Roman Law (Oxford, 1975) FS Cohen, “Transcendental Nonsense and the Functional Approach” 35 Columbia Law Review 809 George G Gretton “Owning Rights and Things” 1997 Stellenbosch Law Review 176 Kenneth GC Reid, The Law of Property in Scotland (Butterworths, 1996) Kenneth GC Reid, “Obligations and Property: Exploring the Border” 1997 Acta Juridica 300 Nigel Foster, German Law and Legal System, (Blackstone, London 1993)
5
