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5. Rights
Most states include in their legislation an extended meaning of land (or immovables) covering physical land and things annexed, but also covering estates in land and limited property rights.103 This saves a lot of legislative duplication since, for example, a formality rule established for a contract to sell land applies, without more, to a contract for a mortgage or to create an easement of land. The Draft Common Frame of Reference operates in reverse. The rules are not intended for use in relation to ‘the ownership of, or rights in security over, immovable property.’104 It starts with the tangible thing (immovable property) which is then limited so that the only rights out of the Frame are ownership and security rights. What is signified by the omission of limited proprietary rights,105 apparently unintentionally. They are, it seems in the Frame.
(1) Ownership
Ownership is defined to be the most comprehensive right that a person can have over property; it should confer exclusive rights of use, enjoyment, modification and destruction, the power of disposition and the right of recovery of the property.106 This definition was undoubtedly conceived in the context of movable property and is used as the basis for the rules on the acquisition and loss of ownership of goods.107 Their ephemeral nature and their ability to get lost make multiple layers of ownership unsatisfactory. Land is more complex, with many forms of ownership possible, but only outright ownership falls within the definition. Another problem is the radically different starting positions of the common law
103Law of Property Act 1925 s 205(1)(ix) (‘land’).
104DCFR (n 2) Principles [38], I.-1:101(2)(f). This is subject to further restrictions in later books: rule 101(3).
105DCFR (n 2) Annex (‘limited proprietary right’).
106DCFR (n 2) Annex (‘ownership’), VIII.-1:202.
107DCFR (n 2) VIII.-1:101(1).
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and civilian systems. Civilian systems identify an outright ownership but then allow it to be encumbered with certain large subtractions – emphyteusis, superficie and usufruct - rights that almost negate the core of ownership. Eigentum or propriété constitute ownership but emphyteusis or superficie or usufruct do not on this view; indeed the definition of ownership seems literally to exclude Eigentum or propriété burdened by a usufruct or long real lease. The common law starts from the holding of estates which may be partial ownership of a particular parcel of land, but English law then selects from the range of common law estates the most extensive – the fee simple absolute in possession – as the absolute ownership right, now dignified with a unique legal status.108 The end result of these two journeys is strikingly similar. European ownership equates to the absolute ownership of goods and hence to the English freehold or Commonhold. It seems to exclude leaseholds, however long, and (more arguably) the encumbered freehold.109 Ownership is well understood and the definition needs tweaking to make it correspond to that understanding.
(2) Limited proprietary rights
A security right is a limited property right in an asset which entitles the secured creditor to preferential satisfaction of the secured right from the encumbered asset.110 This seems to deal adequately with the mortgage, the legal charge, the hypothec and the Grundschuld.
Rights other than ownership are defined to be ‘limited proprietary rights’ – a concept which includes security rights, but also rights to use, rights to acquire and trust related rights.111 The land exclusion (ownership and security over land) leaves open the general contract rules and the rules on contractual obligations (respectively Books II and III of the Draft Common
108Law of Property Act 1925 s 1(1)(a).
109A freeholder subject to a mortgage does not have exclusive rights eg of destruction.
110DCFR (n 2) Annex (‘security right in a movable asset’), IX.-1:102(1).
111DCFR (n 2) Annex (‘limited proprietary rights’).
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Frame of Reference), for the other limited rights, namely rights to use, to acquire and trust related rights. This is unintended. It arises because positive provision is made for the ownership of goods (Book VIII) and Security Rights in Goods (Book IX) and the intention was to exclude land from these books, even though land was inherently excluded. What was required was a comprehensive land exclusion covering all rights (or at least all real rights) in land.112
Ownership of land is very often fragmented, all systems being functionally similar despite the conceptual variation covering in England estate theory, in France dismemberment and in Germanic systems as a charge on the ownership of another.113 A life estate is rather like a usufruct, but the point is better made by focusing on the long leasehold. In England it is possible to buy a house freehold, but a flat can in practice only be bought leasehold (given the practical failure of the commonhold scheme). In civilian systems flats are bought in absolute ownership through condominium or copropriété. However, emphyteusis or superficie constitutes ownership subject to a rent, particular systems recognising one or the other or both. These are ownership rights in practice bought, sold, registered and mortgaged in the same way, even if civilian systems adhere to the theory that they are limited rights in the land of another, just like servitudes and usufruct.
Long leases apart there is a major division in approach to short leases, that is to rack rental. English law sees them as one more type of estate. Civilian law sees hire as a single concept, whether it relates to a house or a car, and sees hiring as a matter of obligation rather than partial ownership. Rules are included in the Draft Common Frame of Reference for leases of goods114 with no corresponding book for rentals of homes. How could a single code cover all
112DCFR (n 2) I.1:101(2)(f).
113B Akkermans Principle of Numerus Clausus in European Property Law (Antwerp,
Intersentia, 2008) 116ff, 191ff, 343ff. 114 DCFR (n 2) Book IV.B.
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the security regimes of the EU? Yet it seems that general contract rules could nevertheless apply to determine when a contract for rental has been formed: a rental is a matter of personal obligation within the scope of Books I and III and not an excluded real right in land. Leases require a custom drawn line. Even if sdhort term rack renting is treated as land, there is undeniably an extreme at which a contract is personal nature even if it gives the right to use land – a letting of a hotel room or short term holiday letting. In England the line is drawn between leases and licences by exclusive possession,115 but the line is drawn in different places in different jurisdictions and the line also varies between the various conflicts rules.116
Contracts to use land have to be sifted according got function and a line drawn in each specific context.
(3) Real rights in civilian Europe
Between its original six members, Europe was a civilian club, and so it was logical to structure European law around the basic assumptions of Roman law. Thus the Brussels Convention regime regulating conflicts of jurisdiction over actions117 is posited on the distinction between real and personal actions:
‘A right in personam can only be claimed against a particular person. A right in rem on the other hand is available against the whole world. The most important legal consequence flowing from the nature of a right in rem is that its owner is entitled to
115Street v Mountford [1985] AC 809 HL; Antoniades v Villiers [1990] 1 AC 417 HL.
116Sparkes ELL (n 40) [10]. For example, the Rome I Regulation selects a site-based rule for land contracts which relate to ‘a right in rem in immovable property or a tenancy of immovable property’: (EC) 593/2008, [2008] OJ L177 6, §4[1](f).
117Regulation on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (EC) 44/2001, [2001] OJ L12 1.
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demand that the thing in which it exists be given up by anyone not enjoying a prior right.’ 118
This was drawn from the architecture of civilian civil codes. Property equates to real rights whereas the personal rights reflect obligations – general contract, specifics, delict and unjust enrichment. Europeanisation at its simplest would exclude rights in rem but harmonise and recodify rights in personam, according to the degree of Napoleonic ambition stopping a thte end of contractual obligation or extending to all forms of civil obligation. A clean cut could be made in most civil codes.
In France we find a numerus clausus of real rights including propriété, long lease (superficie and emphyteusis), usufruct, servitudes and security (hypothèque).119 The German numerus similarly embraces Eigentum, long lease (hereditary building right), real servitudes, usufruct, pre-emptions, real charges and security (Hypothec and Grundschuld).120 This shared heritage derives from the centrality of classification by actions to the Roman scheme. Justinian was pre-eminently a compiler, but each of the three main works of the canon, the Corpus Juris, adopted a different order. It is certain that two cannot be right. No logical structure emerges from the Digest, a ‘tessellated pavement of antique and costly, but too often incoherent fragments’121 compiled, as we now know, in an arbitrary fashion.122 Instead the ground-plan
118Schlosser Report [1979] OJ C59 71,120-121, [166]. The report considers the accession of Spain and Portugal to the former Brussels Convention but it reflects a system developed before the accession of the United Kingdom.
119French CC Book 2 Titles II, III, IV, Book 3 Title XVIII; long leases are covered by the construction and rural codes.
120German CC (Bürgerliches Gesetzbuch) Book 3 Sections III-VIII.
121Edward Gibbon Decline and Fall of the Roman Empire Volume the Third ch XLIV, D
Womersley vol 2 (Penguin Books, London, 1995, 978-0-140, 43394-4) 799-801. .
122 A Borkowski & P du Plessis Textbook on Roman Law (Oxford, OUP, 3rd edn, 2005) [2.5.3.5] at 59-60, referring to the mass theory of Bluhme.
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of all civilian codes123 is to be found in the Institutes, a structure borrowed from Gaius124 and made axiomatic by Justinian.125
This work is crafted around the fundamental divide between property enforceable in things and obligations relating to things but enforceable against individuals, that is between, on the one hand, the vindication of ownership and similar actions in rem and, on the other, actions in personam. This division at the top of hierarchy of actions created an equivalent division of the substantive law,126 which was refined into a substantive classification of rights was achieved in the Middle Ages by the post glossators.127 The Napoleonic Code was informed by the real/personal divided though the Third Book on ‘Different Modes of Acquiring Property’ is a pragmatic mixture of property and obligation. Fanatical devotion to the separation of the law of property and the law of obligations, the Trennungsprinzip, was developed by Pandektenrecht, which was then carried forward into the Bürgerliches Gesetzbuch (the German Civil Code). Civil law should be divided into fully independent parts,128 separated rigidly between the personal (obligation, Schuldrecht, particularly contract, Vertrag) and property (Sachenrecht). The abstraction principle separates the obligation to pass title from the actual transfer.
That the real/personal divide has not been adopted by the codifiers remains a notable fact calling for explanation. It seems that the desire to avoid a repetition of the Allgemeiner Teil (the General Part) of the Bürgerliches Gesetzbuch forms a unifying feature across much of
123CP Ilbert Legislative Methods (Oxford, Clarendon, 1901) 15.
124Gaius Institutes Book I [I.8]; WM Gordon & OF Robinson Institutes of Gaius
(Duckworth, London, 1988, 0-71-562505-5) 23.
125Justinian Institutes Book I [II.12]; JB Moyle Institutes of Justinian (Clarendon, Oxford, 5th edn, 1933) 6.
126E Metzger ‘Actions’ ch 6 in E Metzger Companion to Justinian’s Institutes (London, Duckworth, 1998) 217; HF Jolowicz & B Nicholas Historical Introduction to the Study of Roman Law (Cambridge, CUP, 1972) 211, 268-270.
127G Samuel ‘English Private Law in the Context of the Codes’ in M Van Hoeke & F Ost
Harmonisation of European Private Law in Ost (Oxford, Hart, 2000) 50.
128Akkermans Numerus Clausus (n 113) 244.
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Europe129 though it has led to savage attacks on the Draft Common Frame of Reference by sceptical German academics.130 It can only be because the axe would not create a clean cut in civilian law, and would cause horrendous damage to the structure of the common law.
Removal of the personal category would leave an untidy category of property, partly because of the winding and indistinct border between real and personal rights.131 The numerus clausus of property rights often leaves parties unable to achieve their aspirations for forbidden property rights, and forced to stitch together a patchwork of real and personal obligations into a single do-it-yourself property right.132 Like any patchwork the pieces cannot be unstitched; it would be messy to leave the parts governed by different laws. Further the real/personal divide often allows a choice of remedies for a single situation; for example where a landlord seeks to recover land form a tenant at the expiration of the lease, the action being either a contractual action to enforce the obligation to return it or a proprietary vindication.133 The real/personal divide breaks down completely when land subject to a rental is sold, since, illogically, the lease is often treated as quasi-real and so allowed to bind a purchaser;134 the neat conjunction of action, right and proprietary force proves to be illusory.
For all these reasons it would be unsatisfactory to have real and personal obligations affecting land enforced under different legal orders, and the in rem/in personam division has rarely been chosen by European legislators.
129 C Von Bar ‘Launch of the DCFR’ [2008] XIV Juridical International 4, 6; A Vacquer ‘Farewell to Windschied’ (2009) 4 ERPL 487; Whittaker ‘Assessment’ (n 3) 84.
130See above n 13.
131KGC Reid ‘Obligations and Property: Exploring the Border’ (1997) 227 Acta Juridica
225, 233.
132Akkermans Numerus Clausus (n 113) 400-402.
133E Levy West Roman Vulgar Law: Law of Property (Philadelphia, American Philosophical
Society, 1951) 228ff.
134 BGB (n 120) §571.