The persistence of system in property law.

• Author: Smith, Henry E.
• Position: The Constraint of Legal Doctrine

According to conventional wisdom, property has disintegrated. Property law has undergone many changes since the heyday of Legal Realism, and many of these changes were both inspired by Realism and went under the banner of the Realists' "bundle-of-rights" conception of property. However, many of the features of property law most denigrated by the Legal Realists and their successors have proved surprisingly resilient. These "doctrinal" features include the notion of property as a thing, the importance of possessory rights, and the greater degree of formalism in property than in contract law. In this Article, I argue that there is a common cause to the Realists' criticism of these features and their endurance in the face of that criticism: all of these features of property are manifestations of property law's basic architecture as a system. Because of the inherent complexity of relations--especially those that are less personalized--in private law, a system for providing a first cut at managing these relations presents problems of information costs that are unique to property. These costs, usually left out of realist analysis, are hard to ignore entirely and push property law to treat private interactions in a more modular fashion than the realist bundle-of-rights picture would lead one to expect. Moreover, the underappreciated flexibility and robustness of a modular architecture allows property law to absorb--at some cost--a great deal of change without alteration of its basic nature. I apply this analysis to Realist and post-Realist approaches to asset definition, trespass and nuisance, and the standardization of property forms. The greatest engine for change from Legal Realism in certain areas of property may he simple ignorance of the complexities of earlier law.

INTRODUCTION I. System and Its Discontents in Legal Realism II. The Persistence of System III. Nonsystemic Changes in Doctrine IV. Pseudo Changes in Doctrine V. The Partial Flattening of Property Law Conclusion Introduction

Nowhere was the realist attack on formalism and classical legal thought more vehement than in the area of property. And in keeping with the idea that "we are all Realists now," (1) it would appear that property law underwent a great deal of change starting in the Legal Realist era. From the revolution in landlord-tenant law to a greater willingness to make exceptions to a landowner's right to exclude to the rise of new forms of contractual property, the conventional wisdom is that Realism indeed had a profound impact on property. In the process, the Realists' preferred picture of property--the bundle of rights--became the reigning dogma and provided justification for the change. If any cluster of rights, privileges, immunities, duties, liabilities, and so on could be characterized as property, then there was no good reason why the bundle of sticks, reflecting the best of current thinking, should not be immediately and continuously implemented in the law. The Realists' skepticism of doctrine, and in particular their hostility to property baselines, has apparently made a great deal of headway. On the conventional view, property is not merely a bundle of rights, but it has even fragmented to the 1 point that there is nothing holding it together other than the state of current policy judgments or prevailing political winds.

This picture is too tidy in its untidiness. While the changes set in motion by the Realists are real, they have not come close to abolishing doctrine or fragmenting property out of existence. To the contrary, those aspects of property that the Realists saw as the greatest challenge to their program have been the most resilient, in practice if not in theory. Property is still largely a law of things. (2) It provides for in rem rights that show a high degree of formalism and standardization. (3) This Article will argue that what the most stable parts of property share is their relatively tight integration with the basic system of property--a system that property law requires because of the problems it solves.

Property law coordinates activities and resolves conflict between members of society over external resources. To do this, it must manage the potentially intractable complexity of these interactions. Property law must also provide a system that channels information where it is needed and cuts it off where it is not worthwhile. Property divides the world of horizontal interactions into modules, largely surrounding the legal thing, which allow intensive activity inside boundaries and stereotyped interactions between modules; think of how many activities owners are privileged to take within a parcel, which are of no legal relevance to dutyholders. Legal things are not the same as actual things, and the legal things can correspond to intangible things. (4)

Fundamental to property is the spectrum running from in rem to in personam. (5) Some aspects of property--like the basic possessory rights protected by trespass and the priority of the true owner's rights over others' claims--are in rem, in that they avail against others generally. Other aspects of property are more narrowly tailored, falling toward the in personam end of the spectrum, including nuisance and lateral support between neighbors, covenants, and landlord-tenant.

This Article will argue that the changes rooted in Realism are concentrated on the more in personam-like aspects of property and at the edges of the system--and, by the same token, that the overall architecture of property has been surprisingly resilient. Or perhaps it is not so surprising; the Article will also argue that the persistence of the system or architecture in property law is no accident but follows from the function it serves. The "essential role" of property is to manage complex interactions of persons at large over resources, and the severe informational demands of this problem make some such system almost inevitable. (6)

There is an irony in this. The Realists' slogan was that an increasingly complex society required less formal and more contextual law in many areas, including property. (7) Although new problems did require many new solutions, the "complexity" of modern society did not remove the need for a modular system. Rather, in some ways, it increased the need to manage the greater complexity of interactions through that very system.

This Article will begin in Part I by setting out the nature of the system in property law and the Realists' apparent attack on it. Part II will show that some of the most systematic aspects of property have proven quite resilient through the present. By contrast, Part III will show that those aspects of property that are less embedded in the architecture--either because they are in personam or can be characterized as exceptions--have been subject to the most realist-inspired change. Part IV addresses the class of changes that are more apparent than real, including the "modern" view of trespass and the scope of rights extending above and below parcels, as well as the supposed significance of intangibles for the notion of property as a law of things. These themes are drawn together in a Conclusion.

1. SYSTEM AND ITS DISCONTENTS IN LEGAL REALISM

   The Realists themselves took aim at certain aspects of property, centering on the role of things, formalism, and the notion of an in rem right. Their objections had roots in earlier sociological and progressive jurisprudence but were carried much further, apparently winning the day. In this Part, I identify what the Realists found objectionable in property law before turning to what their legacy really turned out to be.

   The Realists' attack on property law was of a piece with their rejection of earlier formalism in "classical legal thought." While the Realists' characterization of the earlier era can and has been questioned,8 it is especially problematic in the area of property. The most famous legacy of realist nominalism in property law is the bundle of rights, which eventually was accepted as conventional wisdom. (9) The bundle of rights is a useful analytic device in that it helps to clarify the implications of a set of legal entitlements. But it is often taken as much more--as a theory of property. In an earlier article, I noted that in keeping with the Realists' professed love for shallow fact-oriented concepts (or facts themselves), the bundle of rights is like the extension of a concept--what in the world falls under it. (10) But there are multiple ways ("intensions") of getting to this extension. One can pick out a set of facts in many different ways, and enumeration is often not the cheapest or most useful method of doing so. Thus, while fee simple to Blackacre may involve all sorts of rights (e.g., to exclude people from entering but not from viewing, to demand lateral support from a neighbor, and to alienate), privileges of use (e.g., to build, to till, and to park), duties (e.g., to shovel snow from adjacent sidewalks),

   and liabilities (e.g., to eminent domain), some of these sets of relations are open-ended privileges of use in general, subject to limits from others' rights. Their open-endedness precludes enumeration of the sticks in the "bundle" accompanying the fee simple to Blackacre.

   Moreover, the realist bundle of rights was built on Hohfeld's scheme of legal relations,11 which itself can be understood in various ways. It is no doubt a useful analytical device, but taken as a "theory" of the structure of legal relations, it is incomplete, as Hohfeld may well have known: he died before being able to supplement his reductive theory with a theory of composite or aggregates of relations. (12)

   Likewise, the Realists' vision of property was characterized by a Hohfeldian skepticism of the in rem aspect of property. In one famous formulation, Walton Hamilton and Irene Till declared that property is nothing more than "a euphonious collocation of letters which serves as a general...