Comparative_Property_Law

(b) Numerus Clausus of Absolute Rights

Given the erga omnes effect of absolute rights, the civil law has set certain limits concerning the number and content of these rights. This is the socalled numerus clausus doctrine which is at the heart of civilian property law systems. It has various aspects. Most importantly, the number and content of absolute rights are limited by mandatory law. Absolute rights are, for example, ownership, mortgage (hypothec), pledge, servitude, usufruct, superficies,27 emphyteusis,28 or intellectual property rights,

such as copyright. What is meant by ‘ownership’, ‘mortgage’, and so on is defined either by statute (ie a code or a so-called ‘special statute’) or by case law. This is what is called in German scholarship the Typenzwang and Typenfixierung of absolute rights. However, the numerus clausus doctrine does not mean that the parties do not have any freedom at all to determine the content of absolute rights, nor does it imply that the list is

closed indefinitely. Let me first make a few remarks about the nature of the closed list and about freedom of contract in civilian property law systems.

Although very important, the numerus clausus doctrine appears to function more as a frame of reference than as a stern guardian of civilian property law. According to a leading French case, the articles in the French Code civil on ownership do not have an absolute character.29 The Cour de cassation has stated that ‘ni ces articles [ie the articles on ownership], ni aucune autre loi, nʼexcluent les diverses modifications et décompositions dont

le droit ordinaire de propriété est susceptible’. The Court concluded that certain feudal rights, governed by the customary law of Normandy, had remained valid after the enactment of the Code civil. Also in German law, the numerus clausus doctrine is not as absolute as it appears. Under German law the buyer under a retention of title clause is given a kind of property right with regard to the object bought, although ownership only passes after full payment of the purchase price. In spite of all doctrinal difficulties which resulted from the acceptance of such a new property right, German courts felt that the practical needs had to prevail. The right thus created (a socalled Anwartschaftsrecht, or expectation right) is now a well-established part of German property law, contested only by a few academic lawyers. How German courts have struggled with the recognition of such a right in the light of the numerus clausus doctrine becomes clear when one reads

the definition of this right as being a ‘wesensgleiches Minus’ compared to ownership. This means that an Anwartschaftsrecht is less than ownership but still, essentially, the same.30 Such a right comes very close to the beneficial ownership given by English Equity to the buyer of a piece of land.31

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Even where the numerus clausus principle is adhered to strictly, parties are still given some freedom to shape their property relations. An example demonstrating that freedom of contract does, at least to some extent, exist in civilian property law is the right of emphyteusis as it can be found under Dutch law (a long lease of land, used in particular by local communities

to control the use of land) and the right of servitude. Under Dutch law it is general practice that the right of emphyteusis is specified by including in the deed of establishment a set of general conditions, describing and limiting the use of the property which is to be burdened.32 If the conditions do not violate the ‘nature’ of the right, their content becomes part of the real right and, therefore, binds third parties. This leaves the parties to the original deed of establishment a considerable—contractual—freedom to give ‘real’ effect to these conditions. Another example is servitudes. The degree of freedom that exists with regard to the creation of a servitude differs from country to country. In the Netherlands the concept is fairly open as long as no positive duty, that is, a duty to act, is created.33 If such a positive duty

is included in the deed creating the servitude, the provision only has inter partes effect and does not of itself bind third parties. A third party can only be bound if the provision is included in the deed of transfer of ownership to such a third party. The seller then imposes the duties contractually upon the buyer. Such provisions are known under the name of ‘chain’ or ‘perpetual’ clauses. Generally, it can be said that property law systems are very hesitant concerning the acceptance of positive duties having erga omnes effect. Burdens to do something can only be accepted by a legal system, as is frequently argued, if they are voluntary. Since the French Revolution freedom has become a basic human right; feudal burdens have been abolished, not least because they usually contain positive duties.

The parties' freedom to shape a property right depends upon the nature of the property right as defined by the legal system. In the case of ownership the nature of the right limits the freedom of the parties to a large extent, but not completely. Sometimes parties to a transfer of ownership can limit the effect of such a transfer. Although a transfer of ownership generally implies that the entire right as it existed before the transfer will pass, in some legal systems the parties to such a transfer are free to limit its effect

by stating explicitly for which purpose the transfer takes place. Thus, German law accepts that the transfer of ownership may be limited in its effects by the promise of the new owner that his right of ownership will only serve to secure a claim he has against the former owner.34 This is the transfer of ownership for security purposes. In such a case, the new owner is not as free as he would have been had the transfer been made without such a security

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purpose. This kind of transfer has an effect which resembles that of the creation of a common law trust, as the new (legal) owner has to take into account the interests of the former (now economic) owner. What is created is a ‘civil law trust’, such as the Treuhand under German law and the fiducie under future French law. Here one can see a basic thought pattern of the civil law shimmering through the technical rules: as a matter of principle the former owner has only a personal contractual right, rather than a real

property right, against the new owner that the new owner will use his right of ownership for the purpose agreed upon. Otherwise, we would be faced with a fragmentation of the right of ownership. It is, however, a basic tenet of the civilian systems that ownership is unitary. It is not seen as a bundle of rights which can be divided over several persons.35 Apart from that, accepting fragmented ownership would infringe the numerus clausus of absolute rights. Granting ownership rights to several people would effectively mean that new real rights could be created, and this is exactly what the numerus clausus doctrine wants to avoid.36

A final aspect of the numerus clausus doctrine that can only be touched upon here is the way in which a civilian system looks upon real rights other than ownership. These so-called limited real rights, as their name implies, limit the right of ownership and take away certain rights from the owner. In the civilian tradition two approaches can be found. A legal system may look upon a limited real right as a démembrement of ownership. Certain ownership rights are given to the person with the limited real right, such as a mortgagee. The very moment the limited real right vanishes, the owner regains his full position. This is the ‘elastic’ concept of ownership. A limited real right restricts the right of ownership ‘from the inside’. The limited real

right plus what remains of the ownership right amount to full ownership. On the other hand, a legal system may consider a limited real right as entailing limited powers, as compared to ownership, without, however, carving away any rights from the owner. Ownership and limited real rights are then seen as strictly separate rights. According to this approach the owner accepts that certain of his ownership rights can no longer be used, to the extent, and for the period, that a limited real right has been created. The right of ownership and limited real rights then cumulate ‘externally’. This difference in view can have consequences in situations where one person obtains various property rights. In the external-cumulative approach, it is easier, for example, for a person to be mortgagor and mortgagee at one and the same time, as is possible in the case of the German Eigentümergrundschuld. In the internal-cumulative approach the first reaction will be that at the very moment when a limited real right passes to the owner, the latter regains

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all his rights with the result that the limited real right will vanish.37 In that approach an Eigentümergrundschuld is a contradictio in terminis.

(c) Is the Civil Law as Dogmatic as it Seems?

It appears from the above that the civil law, though scholastic and dogmatic in its structure, also shows flexibility and openness. The civil law has been shaped by the doctrinal analysis and reinterpretation of Roman law by

later writers who examined Roman legal texts from the perspective of their own times. Taking Roman law as their starting-point, they attempted to create an overall framework from which the existing reality could be explained in a coherent and systematic way. Hence the idea that it was a ‘system of the contemporary Roman law’ that had to be developed.38 The influence of this school of thought differed from country to country, and it also sometimes differed within a country. It will be apparent from the above that this doctrinal nature of the civil law does not necessarily imply that civil lawyers would be rigid in their legal thinking and would exclude from their analysis social reality and the need to develop existing concepts to establish new categories. Reference can be made to the writings of Wouter

Snijders, one of the leading Dutch civil lawyers responsible for the drafting of the new Dutch Civil Code in its final stages. In these writings Snijders reacts to criticism from Dutch legal practitioners and academics who regarded

the property law provisions of the new Civil Code as being too strict and constituting an expression of legal thinking predating European and global economic integration. Snijders, in response, took the view that the text of the Civil Code should be approached in a flexible and not overly legalistic way, and that it should be taken as a source of reference and analogy. A civil code does not aim to stop further legal development but attempts to channel it in a rational, constructive, and consistent way. Snijders advocated these ideas particularly when he presented his views on problems concerning property law, such as the acceptance of new objects of property law.39 According to this approach, therefore, a civil code is an interpretative framework, open also to solutions from other legal systems, that is not meant to limit, but to guide future developments.

2. Common Law

(a) Feudal Remnants: The Concepts of Tenure and Estate

In some respects the common law is still rooted in the feudal system as it developed in England after its conquest by William the Conqueror in 1066.

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Most importantly, however, the feudal system lives on through the use of feudal terminology. In other words, the survivial of the feudal system is largely a matter of form. Examples of feudal terminology are the concepts of ‘tenure’ and ‘estate’.

The term ‘tenure’ expresses that a person holds (French: ‘tenire’) rights from the Crown or from a lord. The King or Queen is in the feudal system the Lord Paramount. This can still be seen in section 79(1) of the (English) Land Registration Act 2002, which reads: ‘Her Majesty may grant an estate in fee simple absolute in possession out of demesne land to Herself.’40 What

‘demesne land’ is can be found in section 132(1). It ‘means land belonging to Her Majesty in right of the Crown which is not held for an estate in fee simple absolute in possession’. In other words, the Crown is the sole holder of rights with regard to that particular piece of (demesne) land. Most land, however, is not held solely by the Crown. In fact, with regard to most land the Crown only has a nominal right and the idea of the Queen as the Lord Paramount is more an historical notion than legal reality. The rights of other persons holding land are called estates. The concept of estate denotes the length of time of a particular entitlement with regard to land. A right can be, as in the case of a freehold estate, of unlimited duration. In the case of a leasehold estate, the entitlement is limited in time.41 The leasehold estate was not immediately developed under the feudal system, but was later fitted into the existing feudal land categories.

Nowadays, the feudal system, as it existed in the centuries after the Norman Conquest, of course no longer exists. It has developed, and it has been reinterpreted in a way that, drawing an analogy with the application of Roman legal concepts on the continent, may be said to constitute a ‘system of contemporary feudal law’. Modern land law has been disconnected very largely from the original feudal system. It can, therefore, be no cause of surprise that the English Law Commission has started a project aimed at modernizing land law and doing away with long-gone feudal notions.42

Scotland has gone even further and abolished the feudal system altogether from 28 November 2004. To understand the changes in Scots law it should be realized that, unlike English law, the Scottish legal system was influenced, to a considerable degree, by Roman law. It is a mixed legal system in which two legal traditions (civil law and common law) have grown together. When, under the influence of Roman legal thinking, the feudal rights had to be categorized, a distinction was made, as in Continental Europe, between

the property right of the lord (superior) who conferred feudal rights upon

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someone, and the property right of the person to whom these rights were conferred (vassal). The latter person de facto used the land, but had to acknowledge the superior rights of the lord. This is why the vassal was said to have the dominium utile and the lord the dominium directum. In this way a doctrine of duplex dominium was created. The purpose of this doctrine was to maintain a unitary concept of ownership (dominium) as it was thought to have been applied by the Roman lawyers, while at the same time adapting it to the existing legal reality. The Abolition of Feudal Tenure etc (Scotland) Act, after abolishing the feudal system in Section 1, provides in Section 2(1) that an ‘estate of dominium utile of land shall … cease to exist as a feudal estate but shall forthwith become the ownership of the land’.43 This is not unlike what can be found in the Décret relatif à lʼabolition des priviléges of 4 August 1789, article 1, first sentence: ‘LʼAssemblée nationale détruit entièrement le régime feudal’.

In the light of the abolition of the feudal system on the European Continent as a result of the French Revolution, and in Scotland only a short time ago, it is remarkable to see that feudalism is still alive and well on the Channel Islands. The property law of Jersey and Guernsey is not only rooted in the ancient customs of the Duchy of Normandy—the same customs that were accepted as existing law in the above-mentioned Caquelard case—but these

customs are even applied to this very day.44 This means that the existence of feudalism as such does not prevent the law from developing into a modern legal system, particularly, if it is kept in mind that the Channel Islands are well-known centres of financial services.

(b) Personal Rights versus Real Rights

The distinction between personal (eg contractual) rights and real (property) rights is also known to the common law. At the same time, however, it must not be forgotten that the concept of absolute right in the civilian sense of that term does not exist in the common law, even with regard to that part of property law that was not directly affected by the feudal system, that is movables. What matters is the effect of a right vis-à-vis a third party. Such effect can be ‘against the world’, and then its effect resembles an absolute right in the civilian sense. But it can also be more limited in the sense that it is only effective against one or more specific (groups of) third parties. This is what is meant by the relative strength of title with regard to movables. What matters in that case is, who in legal proceedings has the better right.

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(C) Common Law and Equity

A specific aspect of the common law, not directly related to the feudal system, is the existence of a duplex ordo: common law and Equity.45 That there is no direct relation between the existence of a feudal system and this duplex ordo can be seen when studying the feudal system, as it

existed on the European Continent before it was abolished as a result of the French Revolution. In the Continental feudal systems the English distinction between ‘old’ common law and ‘new’ Equity is absent. A consequence of the parallel existence of these two subsystems is that a person can have

a property entitlement according to one of them, but not according to the other. A prime example is the trust. The trustee (manager of a fund) has a property entitlement at common law. The beneficiary, in turn, has a property entitlement in Equity. The position of the common law ‘owner’ (the trustee) is stronger than the position of the equitable ‘owner’ (the trust beneficiary).

The survival of thought patterns emanating from the feudal system and the existence of a duplex ordo of common law and Equity have led to what may be called a relational approach to property law. A civil lawyer is inclined to expect a clear-cut answer to the question whether a person is an owner or not. The answer is either yes or no, given the unitary concept of ownership. For a common lawyer it is not that simple. A common lawyer will want to know whether the question is asked according to common law or Equity. Furthermore, with regard to land law, a common lawyer will use the concepts of tenure and estate, and not the civil law concept of absolute rights.

3. Common Elements: Transparency Requirements, Transfer Systems

Because of the erga omnes effect of property rights, third parties must be aware of such rights. In order to provide a sufficient degree of transparency it must, first of all, be clear with regard to which object a property right is claimed and, second, that right must be visible to third parties. Visibility can result either from the exercise of factual power (possession) or of registration. These two aspects of the transparency principle are generally known as the principles of specificity and publicity. The transparency principle can be found in both civil law and common law.

Also in both civil law and common law the same types of transfer systems can be found. These are systems to regulate the creation, transfer, and termination of real rights. Two distinctions can be made, first, with regard to the property effect of a contract, and second, with regard to the property

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effect of rescission or annulment of the agreement that has led to a transfer. Concerning the former the consensual system and the traditio system

are distinguished. I will take the property effects of a contract of sale as an example. Under the consensual system a contract of sale results in an immediate transfer of ownership, either merely between seller and buyer or, depending upon the type of object, also against (certain or all) third

parties. This system is applied, inter alia, in France. Under the traditio system a contract of sale does not have any property effect. An act of delivery is necessary for the transfer of ownership, although in some legal systems a contract of sale concerning an immovable can be provisionally registered

at the land registry for the protection of the buyer against, for example, the insolvency of the seller. The traditio system and its strict separation between contract and property can be found, among other jurisdictions, in Austria and Germany. The second distinction concerns the property effect of a defect with regard to the underlying agreement. Again two systems can be distinguished, the causal and the abstract system. Under the causal system a defect in the underlying agreement means that there is no longer

a justification for the transfer and that, for this reason, the transfer is invalid. The causal system can be found in Austria. Under an abstract system,

the transfer of ownership is seen as a separate legal act, which is quite independent of the underlying obligatory relationship, and which is thus inherently protecting third parties. When under the abstract system a third party acquires the right of ownership or any other property right from the new owner whose contract of sale with the former owner has been dissolved or annulled, the third party will still get full and secure ownership because he acquires from the owner. The original owner will be able to claim back his object from the recipient. But since he has lost ownership, he cannot rely on the rei vindicatio but merely on the law of unjustified enrichment. In addition, sometimes a claim in tort may lie against the third party. However, in insolvency situations this will not really help the former owner, as these are only personal claims. Property law systems based upon the principle of abstraction, in order to counterbalance the overprotection of third parties, may therefore develop doctrines to annul the transfer as well. This is done in German law through the doctrine of the Fehleridentät: a vitiating factor that invalidates the underlying agreement may be so strong as to also invalidate the so-called ‘real’ agreement, that is, the agreement to transfer and, consequently, the transfer itself. Causal systems, on the other hand, tend to overprotect the original owner and therefore need special provisions to protect third parties in good faith.46

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English law, unlike most civil law systems, does not follow a uniform approach with regard to transfer systems. Thus, the Sale of Goods Act of 1979 follows the consensual system. Transfer of a legal estate in land, however, requires a formal act. Also, it should not be forgotten that Equity may intervene; and the result may therefore be that while no transfer has taken place under the common law, it has taken place in Equity.47

4. An Example of a Static Comparison: The Numerus Clausus Debate in American Legal Literature

In a series of articles American authors have recently started a discussion on whether the common law knows a numerus clausus of absolute rights.48 Their arguments are mostly based upon notions of efficiency and not so much on a legal, or doctrinal, analysis. In defence of a numerus clausus theory they put forward legal policy arguments, such as the need for legal certainty and that it should not be too costly for third parties to obtain information concerning property rights. Too much freedom for the parties, according to this point of view, would lead to an increasing fragmentation of property rights which, in turn, would lead to legal uncertainty and increasing costs of information for third parties. Arguably, in this light, the English Law of Property Act 1925 created a numerus clausus of common law estates

to provide the basis for the introduction of an efficient and cost-effective land registry. The same development can be observed in other common law jurisdictions whose courts have been reluctant to accept new property rights.49

The approach taken in American legal literature adds an interesting policy aspect to the more doctrinally oriented civilian debates on the numerus clausus. What is, however, to be regretted is that the focus is almost exclusively on legal policy aspects. Amercian authors seem to be unaware of the enormous body of civilian literature on the numerus clausus. They do not test their findings against the civilian experience which could have led to a fruitful dialogue between civilian and common law lawyers.

IV. Civil and Common Property Law: A Dynamic Analysis

A dynamic approach to property law in the light of an open-critical comparative analysis can open up our minds and help us to find creative and workable solutions. I will demonstrate this assertion by discussing two questions which are just as pressing in civilian property law systems as they are in the common law. Both questions raise fundamental property law

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issues. Should the law recognize new objects of property law? And should it recognize new types of property rights?

In essence the law of property concerns legal relationships between people with regard to objects, from which rights ensue that may be invoked against more than one person, or a number of specific persons. We have already seen that the rights that may be invoked ‘against the world’ are generally limited. The same can be said about what qualifies as an object of property law. Whatever represents value, it has been argued, can as a matter of principle be an object of property law. Putting an object on the market means that its value can be measured. This implies that the question as

to what constitutes an object of property law is closely connected with the transferability or marketability of such object. However, that does not always have to be the case. Something may be an object of property law in spite

of not being alienable, at least not freely alienable. Examples are res extra commercium and the so-called ‘public property’. Based upon the respect for the dignity of the human person, the human body is not normally regarded as ‘property’ Legal systems try to prevent a commercial trade in organs of the human body. This is an issue that raises difficult legal as well as moral problems. To whom do parts of the human body ‘belong’? In a large number of legal systems special statutory regimes apply. Public property (such as national parks and government buildings) is the object of property law, even though it is under the control of the state and may not be freely alienable. The rules of (acquisitive) prescription may also not be applicable. Public property still represents value, however, as can be seen when such property is privatized. Another example comes from space law. Article II of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, states that outer space ‘is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means’.50

Concerning what can constitute an object of property law new questions constantly keep coming up. Charles Reich asked himself the question whether ‘new property’ (entitlements created by the government) could be recognized, a question also asked outside the United States.51 Who can own, and hence sell and transfer, or pledge, a domain name? Courts, faced with the question whether a domain name should be recognized as a new

‘exclusive right’, not yet recognized as an intellectual property right, have to balance various interests. First of all, there is the need to protect the value which a domain name represents for the person holding the right to use that name. Second, account must be taken of the quasi-monopoly in the hands of

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