Ownership

Suppose you own a flat. You let it to a tenant, who lives in it. You mortgage it to a bank, which can sell it if you default. The municipality taxes it, the planning law stops you adding a floor, and your neighbour has an easement to run a drain under it. You neither occupy it nor control it fully. Are you still its owner? Yes: when the lease ends, the mortgage is repaid and the easement lapses, everything comes back to you, and nobody else has a better claim. Ownership is what is left over when every lesser interest has been carved out. This note explains how jurists have defined that residue, the incidents it contains, its kinds, how it is acquired, and how Indian law shapes it.

Figure: Ownership pictured as a bundle of sticks, each stick one of the standard incidents identified by Honoré; lesser interests take some sticks for a time and the residuary owner gets them back

1. The Meaning of Ownership

Ownership is the relation of a person to the fullest interest in a thing that the legal system recognises. In ordinary speech we say we own things: a car, a house. Salmond insisted that this is a figure of speech. Ownership is a relation between a person and a right: 'Ownership, in its most comprehensive signification, denotes the relation between a person and any right that is vested in him.' To own a car is to own the right of ownership in the car; to own a debt or a patent is to own a right with no material object at all. Salmond calls the first corporeal ownership and the second incorporeal ownership.

2. Austin and Holland

Austin's definition has three marks. The owner may use the thing in any way (indefinite user), may dispose of it as he pleases (unrestricted disposition) and holds it for ever, passing it to his heirs (unlimited duration). The definition describes the Roman ideal of dominium. Its weakness is that no modern owner fits it. User is restricted by nuisance law, planning and environmental law; disposition is restricted by rules against perpetuities, by land ceiling and tenancy laws; and duration may be cut short by acquisition. Austin chose the word indefinite, not unlimited, for this reason: the owner's user cannot be listed in advance, but it is whatever is left after the restrictions imposed by law.

Holland's plenary control is a shorter version of the same idea: full control, subject to the law. Both are useful for describing absolute ownership, but neither explains how ownership survives when most of its content has been handed to others, as with the flat in the introduction. For that we need the idea of residuary ownership and the analysis into incidents.

3. Honoré's Incidents and the Bundle of Rights

A.M. Honoré, in his essay 'Ownership' in Oxford Essays in Jurisprudence (1961), asked what ownership means in mature legal systems and listed its standard incidents. No single incident is necessary; ownership is the combination. Where the incidents are split among several persons, the owner is usually the one who holds the residue.

The image of ownership as a bundle of rights or bundle of sticks, which the figure uses, is associated mainly with Hohfeld, who broke every right in rem into many separate relations with each person bound, with Honoré's incidents, and with the American legal realists, who used the image to show that property could be taken apart and regulated stick by stick. It is not Salmond's metaphor: Salmond analysed ownership as a relation between a person and a right. The image is useful, but critics warn that it hides what holds the bundle together, namely the owner's residuary control. (The figure shows all eleven of Honoré's incidents.)

4. The Characteristics of Ownership

5. The Kinds of Ownership

Two further points complete the picture. In English land law, strictly, no subject owns land: all land is held of the Crown, and the subject owns an estate in it, the fee simple absolute in possession being the largest and the nearest to absolute ownership. And in every system the State keeps the power of eminent domain, the power to acquire private property for a public purpose. In India that power is exercised under laws such as the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013, subject to Art. 300A. Even absolute ownership is therefore held subject to the State's superior power of acquisition.

Joint tenancy and tenancy in common

Co-ownership takes two forms. Joint tenants hold the whole together, with the four unities of possession, interest, title and time, and with the right of survivorship (jus accrescendi): when one dies, his interest passes to the survivors, not to his heirs, until the last survivor owns the whole. Tenants in common each hold a distinct but undivided share; there is no survivorship, and each share passes to the holder's heirs or legatees. Under Mitakshara law the coparcenary resembled joint tenancy, with interest by birth and survivorship; since the 2005 amendment to s.6 of the Hindu Succession Act, a coparcener's interest passes by testamentary or intestate succession rather than survivorship.

6. Ownership, Encumbrances and Possession

Ownership must be distinguished from the lesser rights over the same thing. A right over one's own thing is a right in re propria; a right over a thing owned by another is a right in re aliena, or an encumbrance (Note 28). The four chief encumbrances are the lease, the servitude (such as an easement of way), the security (mortgage, pledge, lien) and the trust. Each takes some incidents from the owner for a time or a purpose; none is ownership, because none carries the residue. When the encumbrance ends, the owner's right expands again to its full extent, like a compressed spring.

Ownership must also be distinguished from possession (Note 30). Ownership is a right, the best title; possession is the continuing exercise of a claim to exclusive use. They usually coincide but may separate: a thief possesses without owning; an owner who has let his house owns it but has only mediate possession. Possession is evidence of ownership and may, through adverse possession, become it.

7. The Acquisition of Ownership

Salmond distinguishes original from derivative acquisition. Original acquisition creates a new title, independent of any previous owner, and has three forms. Absolute acquisition is of a thing that had no owner (res nullius), such as a wild bird caught or a fish taken from the sea (occupatio). Extinctive acquisition is where the acquirer's title arises by extinguishing another's, as in prescription and adverse possession, where the true owner's title is extinguished under s.27 of the Limitation Act. Accessory acquisition is where one's ownership extends to a new thing because it is joined to what one already owns, such as the young of one's animals, the fruits of one's trees, or land added by alluvion. Derivative acquisition is from a previous owner, by his act (sale, gift, exchange, will) or by operation of law (intestate succession, insolvency). It is by far the commonest mode, and the acquirer normally takes no better title than his predecessor had: nemo dat quod non habet.

8. Ownership in Indian Law

Indian law adds features not found in the English texts. The Hindu joint family and coparcenary, the conversion of women's limited estates into full ownership, the State's ownership of minerals, and the constitutional protection of property all turn on the concept of ownership.

9. Evaluation

Austin and Holland describe the ideal of absolute ownership; Salmond explains its logical form (a relation to a right); Honoré shows what it contains; and the residuary idea explains why it survives heavy encumbrance. Modern writers add that ownership is always socially limited, an idea Duguit expressed by calling property a social function (Note 32) and that the Indian Constitution reflects in Arts. 39(b) and 300A. The bundle image is a good teaching tool, provided you remember that the owner is the one who holds the residue.

10. Frequently Asked Questions

Q. Why is ownership called residuary?
A. Because when lesser interests such as a lease, mortgage or easement are carved out of it, the owner keeps whatever remains, and when those interests end, the rights return to him. The owner is the person entitled to the residue.

Q. What is the difference between joint tenancy and tenancy in common?
A. Joint tenants hold the whole together with the right of survivorship, so the last survivor takes all. Tenants in common hold undivided shares without survivorship, and each share passes to the holder's heirs.

Q. Is a Hindu woman's property her absolute property?
A. Yes, under s.14(1) of the Hindu Succession Act 1956, property possessed by a female Hindu is held as full owner. Tulasamma (1977) held that this includes property received in lieu of a pre-existing right to maintenance; s.14(2) applies only where an instrument creates a new, restricted estate.

See also: Note 28 (encumbrances and kinds of rights), Note 30 (possession), Note 32 (property), Note 36 (title), Note 76 (rights in rem v in personam).