Question/Answer Memo for January 28-31, 2013

The mailbag got a little backed up this week.

1. In discussing the Armory case, you said that if the real true owner later came back and sued Delamirie for the jewel, Delamirie could be made to pay damages a second time. In that case, could Delamirie then go back and sue Armory, or would that be barred by virtue of the first Armory v. Delamirie lawsuit?

Yes, Delamirie could bring an action against Armory in that case. Even though it would be a second lawsuit between the two, it would not involve the exact same issue. In the first lawsuit, Delamirie was not asserting the rights of the true owner. But when Delamirie has to pay damages to the true owner in the True Owner v. Delamirie lawsuit, Delamirie effectively steps into the shoes of the True Owner under the doctrine of equitable subrogation, and that means that Delamirie can effectively assert the rights that True Owner has to the jewel. That means that Delamirie can now go back and recover from Armory, because the rightful owner of the jewel has a better right than the finder. That Delamirie v. Armory lawsuit is not barred by res judiciata because Delamirie is asserting the rights of the true owner vs. Armory (and that was not what was litigated in the first Armory v. Delamirie lawsuit).

In that case, if Delamirie did have to pay damages to the True Owner, and then sued and recovered from Armory, we'd be back to the "right" result — the true owner (and not Armory) would ultimately end up with control over the value of the jewel.

2. We briefly talked about the jus tertii defense in class and the book discusses how in some cases it is applicable.  In class, though, we said that it would not apply to Armory's case, but I don't believe we talked about when the defense could be used.  Is the distinguishing factor whether or not you are suing for replevin or for the value of the property (trover)? From the book, it seems to be that if you are suing for the value of the property, you can assert the jus tertii defense (because of Russell), yet in Armory, the court didn't allow Delamirie to assert the defense.  So when is it allowed to be used — is it just a difference in jurisdiction?

There has been the occasional decision (e.g., Russell v. Hill discussed in the notes) where the court allowed the jus tertii defense in an action for damages.  But the considered view is that those cases are wrongly decided.  Allowing the “later possessor” to assert the jus tertii principle as a defense to payment of damages really just creates an incentive to trespass.  Plus, as we discussed in class, there’s nothing that can be done to avoid the “double liability” problem.  One of the two non-TO possessors has to bear the risk of losing that lawsuit, plus a later lawsuit by the real true owner.  We can’t avoid that risk, we can only decide which of the non-TO possessors has to bear that risk.  The law should better protect the prior possessor, to create the proper respect for boundaries and the signal of ownership that is typically sent by my having possession.

3. Say I am walking across the parking lot and find a $20 bill.  I would assume that this would fall into the lost property category because the owner probably would not have intentionally left money in the middle of a parking lot.  The rule says that I would have to follow the statutory procedures and that if the owner makes no claim after 12 months, then it becomes mine.  So, would I technically have to advertise the money for 12 months before I get to keep it?  and secondly, how is anyone going to prove that it is actually theirs?  I would assume that if I put an ad in the paper that I found $20, many people would claim it was theirs.  Is money just treated differently in these cases then other property is?

First, for the finder to be able to assert a claim to true ownership in any event, the state would need to have a finding statute, and not all states do. But assuming the state does have a finder's statute, you are correct that money presents a practical problem. For a true owner trying to reclaim money, proof of prior possession may be extremely difficult.  I’m unlikely to be able to identify cash that I lost by serial number.  In some cases, I might be able to demonstrate my prior possession by reference to circumstantial evidence (e.g., if the cash was found in a suitcase and I could show by photographs or reliable testimony that I was the prior owner of the suitcase and had placed the money in it), but in other cases it may be practically impossible.

Second, the other way that money is different from other objects is that money is currency. If I find a book, I can't sell the book to you and deliver a clear title to the book; you only get derivative rights. But if I find $20, I can spend that $20 by buying a book, or a meal, or anything else, and I can pass good title to the $20 bill to the seller (because of the negotiability principle we talked about the first week of class). So a finding statute wouldn't be necessary to enable me to pass a good title to the cash.

Of course, If I wasn't actually the true owner of the cash and I spent it, it is possible that I could later be made to reimburse the true owner (after all, my finding it created a bailment, and I have a duty to return the object of the bailment to the true owner), if the true owner could actually establish its prior possession of the money to the satisfaction of the court (again, this may be hard).

4. On the right of celebrity/identity, could I make a video where I tell viewers to adopt a particular type of swing "just like Tiger Woods" or "just like Rory McIlroy"? Would the right of identity mean I couldn't do that without their consent?

If I'm selling a golf video saying "How to Play Golf," in which I'm demonstrating the characteristics of a good swing, there's no problem with my appearing on the video saying "here are the characteristic of a good swing, like Sam Snead used to have or Rory McIlroy has today. You take the club back this way ...." If I do that, I'm not trying to make people think that Rory McIlroy endorses my golf video. I'm just making a factual statement — his swing is one that someone learning the game should try to emulate. He doesn't have a property right in the golf swing!

On the other hand, if my video actually includes video footage of Rory's swing, now I'm using his likeness for commercial purposes, and a viewer could more reasonably think I was using Rory to endorse my video (or that I had his consent). In that case, I think a court would say I would be liable to him if I did that without his consent. Or if I titled the video "Swing Like Rory," I'm using his name for commercial purposes and would be liable to him if I did so without his consent.

5. In the Vanna White case, since there have been other hostesses on Wheel of Fortune (who were also blonde), wouldn't Vanna White just be playing a role?

Hardly anybody remembers that there were two other hostesses of the Wheel of Fortune before Vanna.

This argument was actually part of the reason why the dissenting judge in the Vanna White case blew a gasket; he argued that ruling in Vanna’s favor would effectively give her a property right in being an attractive blonde game show hostess, which was really too generic to justify being characterized as a property right, particularly at the expense of chilling creative expression. 

I have a difficult time with the White case; on the one hand, even if I think Samsung’s advertisement may be somewhat stupid, the court has extended first amendment protection to commercial speech like advertising, and one can argue that creativity in the public sphere (even if profit-motivated) might be diminished if we allow Vanna to threaten to sue anyone who pushes the envelope too far in evoking her persona.  On the other hand, pushing the first amendment argument too hard seems to open up the capacity for a creative advertiser to pretty much eviscerate the celebrity’s identity for endorsement purposes (i.e., why pay Tiger Woods to promote our beverages when we can have cartoon Tiger-Woods-like creature do it for free?).  And while I may think it is bizarre that some people draw a positive associational link with Vanna White, lots of people do, and thus I can appreciate why it serves a useful purpose to allow her to control use of that link for commercial purposes.  It’s a good example of the difficulty in reconciling the tension between conflicting two “fundamental” concepts like property and free speech.

6. Wouldn’t there be a pretty strong economic efficiency argument for allowing people to loan goods without allowing the bailee to convey title?  The argument in class seemed to be that we didn’t want to disrupt the way that people normally act (and like to act) by making them paranoid that they could lose their property.  That makes sense, but doesn’t it also make sense to keep a good (such as a lawnmower) working as much as possible rather than collecting dust due to concerns about the loss of the property?  The more something is out there doing its “job”, the better off we are, right?

Generally, I agree, but there's only so far you can push the "we're better off with it being used" argument. For example, suppose that I ask you to borrow you car so that I can get to work. You don't want to loan it to me because you're angry that I had a loud party last weekend and I haven't apologized. So you say no — even though you aren't going to be using the car at all that day, so it is just going to sit in the driveway. Would society be collectively better off if you allow me to use the car? Perhaps so. But that wouldn't justify allowing me to take it without your consent. Likewise, perhaps the Jacques were being paranoid and unreasonable in not allowing Steenberg to deliver the home across their land. Perhaps, at the micro-level, that wasn't an "efficient" decision. But we don't want to encourage things to be taken without the owner's permission (we don't want the taker substituting its judgment about what's "best" for the owner).

7. I'm confused about the discussion of Benjamin and the majority's statement that the finding statute didn't apply because the money was "mislaid" and not "lost." I also don't really get the idea in Benjamin that "lost" property is property that the owner "unintentionally and involuntarily parts with its possession and does not know where it is." If someone stole something from me, I've unintentionally and involuntarily parted with possession of it, and I don't know where it is, but I don't think we should say that I've lost it. The definition just seems silly.

In understanding the "lost-mislaid" distinction, you need to distinguish between "lost" in the colloquial sense (i.e., "I've lost my glasses and I can't find them") and "lost" as it is being used in the lost-mislaid test being applied in Benjamin. They are not the same thing.

If I find a wallet laying in the street, or in the back of a cab, AT THAT MOMENT it doesn't matter whether it is lost or mislaid (for the purposes of the lost-mislaid test). We just say it was "lost." Because I found it, I acquired a property right in it that is better than anyone other than the true owner or anyone who can establish prior possession of the wallet. If the true owner does figure out that I have it, and tries to reclaim it from me, then the true owner can recover the wallet. That will continue to be true unless the state has a finding statute, I have complied with that statute in all respects, and the applicable period for the true owner to reclaim the wallet under the statute has expired. As between me and the true owner, the "lost-mislaid" test is irrelevant.

The "lost/mislaid/abandoned" test only comes into play if a dispute over the wallet arises between me and the owner of the place where I found the wallet (e.g., the owner of the cab, if I found it in the cab). In this context — in other words, in resolving possessory disputes between these two specific parties — the term "lost" has a more precise meaning that either searches for (or draws an inference about) the true owner's state of mind. So it may be more helpful to think of "lost" in this context as "not mislaid." If I intentionally place something in a particular location and later overlook it and leave it behind, the object is "mislaid." By contrast, if I didn't intentionally place it — e.g., if my keys or my wallet fell out of my pocket while getting into a cab — it would be more likely characterized as "not mislaid" (or, in the language used in the cases, "lost").

Again, in this specific example — the wallet found on the seat of the cab — whether it is "lost" or "mislaid" only matters if we end up with a dispute between me (the finder) and the cab owner. If instead the dispute is between the true owner of the wallet and me, then whether or not the wallet is mislaid is irrelevant; it's just a lost object.

Thus, "lost" as used in the "lost/mislaid/abandoned" test is a rubric that the law has used to try to resolve the respective competing claims of the finder (based on actual physical possession) and the owner of the place where the find occurred (based on constructive possession). If the circumstances suggest that the object was intentionally placed by the true owner in the place where it was found — as in the Benjamin case — a court in a "finder vs. owner of place of finding" dispute is likely to characterize the object as mislaid, and thus to award it to the owner of the place of the finding. In this way, the court uses a "constructive possession" analysis to facilitate its broader policy objective (which is to facilitate the return of lost objects to their true owners). This makes intuitive sense because if I'm confident that the true owner intentionally placed it at the place of the find, the true owner is more likely to realize where it is and retrace his/her steps to the place of the find to reclaim it. By contrast, if the circumstances don't clearly suggest that the object was intentionally placed by the true owner at the place of the find, a court is more likely to characterize the object as lost, and to award it to the finder rather than the owner of the place where the find occurred.

This isn't an entirely satisfactory or self-evident rubric. We're making, at BEST, an educated guess about the true owner's state of mind. Maybe the true owner of the wallet got in the cab with the wallet in his hand, set it down on the backseat of the cab intending to pick it up before getting out of the cab, and then forgot to pick it up when he got out of the cab (perhaps he had already taken the cab fare out of the wallet and was holding it). Or maybe the wallet just fell out of the pocket of the true owner's pants or coat as the true owner was getting out of the cab. There's no way to be sure. The circumstantial evidence of the true owner's state of mind won't always be as compelling as it appears to be in Benjamin. In many cases, the circumstantial evidence of the true owner's state of mind will be inconclusive (e.g., something on the floor could've been inadvertently dropped by the true owner or intentionally placed there).

So I'm not arguing that the lost/mislaid/abandoned rubric makes perfect sense. What I'm saying is that this rubric, for whatever it is worth, is the rubric that American courts have used to resolve disputes between finders and the owners of the place where the object was found. So if you have such a dispute, you have to be aware of not only the meaning "lost" has in that context (i.e., "not mislaid"), but also the underlying policies that would be served by a court's conclusion that something was either "lost" or "mislaid" (or abandoned).

8. In Popov v. Hayashi, could the court have awarded the ball to Popov, but say he "lost" it when he got mugged by the crowd, and then say that Hayashi had found it such that Popov (to get it back) had to pay Hayashi a finding fee?

I guess that if California had a statute legislating a finder's fee, or authorizing the court to establish one, maybe the court could or would have done that. Unfortunately, there's no common law authority for that proposition, and if there was statutory authority for that proposition, the court did not discuss it (perhaps because the lawyers didn't make such an argument). Certainly, if the dispute had arisen in a state with a finding fee like Iowa's, this would have been one way to reconcile Popov's attempt to catch the ball, the wrongful behavior of the crowd, and the relative good faith of Hayashi. The court could have treated Popov as having been in prior possession of the ball (having caught it before he was mugged), which was then lost and subsequently found by Hayashi. But that result couldn't be reached without statutory authority for a finder's fee, AND you'd have to be convinced that Popov caught the ball (which the court wasn't).