Theories of ownership and comparison with possession

Possession and ownership are rights accruing on property, but ownership in essence is a greater right than possession. Possession is only an objective realisation of ownership.

This article is particular to INDIA.

Introduction

Ownership is a legal concept that refers to the legal right of an individual or entity to possess, use, control, and dispose of certain property or assets. It is a foundational concept in legal theory, as well as a key aspect of property law, contract law, and tort law.

Ownership is a complex legal concept that dates back to ancient Roman law. Initially, the distinction between ownership and possession was not recognized in legal systems. It was only with the advancement of civilization that the two were considered as separate concepts.

In Roman law, ownership and possession were respectively termed as ‘dominium’ and ‘possessio’, with ‘dominium’ denoting absolute right to a thing, while ‘possessio’ only implied physical control over it. The English law also initially gave importance to possession over ownership, but gradually developed the concept of ownership as an absolute right through the law of possession.

The term ‘ownership’ was first distinguished from possession in English law in 1583. The idea of ownership as a comprehensive right was useful for determining the ‘better right’ by proving prior possession.

The concept of ownership is often distinguished from possession, which refers to physical control over property. While possession is an important aspect of ownership, legal ownership is a broader concept that includes the right to use, control, and dispose of property. The concept of ownership is said to evolve after the concept of possession with the development of economic and social structure of the society. Ownership is not just having a physical control over the property but is a blend of several other rights in it such as:

1. The right to enjoy the property.
2. The right to exclude other people from using that property.
3. The right to dispose of the property.
4. The right to manage the property, etc.
5. The right to the income generated out of the property.¹

Ownership is also subject to various legal limitations and restrictions. For example, the state may have the power to seize or expropriate property for public use or to regulate the use of property for the public good. Additionally, certain types of property, such as intellectual property, may be subject to different legal rules and regulations.

The concept of ownership is closely linked to the broader legal system, as it is used to define and regulate the relationships between individuals, communities, and the state. It is also a complex and evolving concept, with legal scholars and practitioners continually examining and redefining the scope and limitations of ownership in response to changing social, economic, and technological circumstances.

¹ A.M Honore , Ownership;The Nature of Property and Value of Justice, Page 370-375, JSTOR.

Development of the idea of ownership

The idea of ownership was developed with the growth of civilization. Ages ago when people were wandering from place to place, they didn’t settle anywhere. They didn’t have an idea of ownership.

The idea of ownership began when people had planted trees and started to build homes for themselves. Metamorphosis from pastoral to agricultural economy helped in the development of the idea of ownership. People started to believe in “mine and thine”.

Therefore the whole credit of the development of ownership goes to the development of the civilization. During the nomadic era, people did not reside at any given place; therefore there was no sense of ownership in them.

However, with the evolution of agriculture in the society, the idea of ownership began to bud. People began to cultivate, grow their crops on lands and therefore the feeling of that property being their own started to arise. At that time, people did not differentiate between the concepts of possession and ownership. It was believed that the one who has a physical control over the land is the one who owns that land.

However, with the advent of modern civilization, this distinction between possession and ownership became clear. This distinction is believed to have been first understood by the Roman law.²

Meaning and definition

The term “ownership” literally means to have or hold a thing. The Black’s Law Dictionary defines ownership as “the bundle of rights allowing one to use, enjoy and manage the property, including the right to convey it to others”. In the legal sense, the term “ownership” means right over a thing to the exclusion of all others persons, implying non- interference by others in the exercise of his right and the same must be distinguished from a mere holding a thing in one’s possession.³

Following are some of the definitions of ownership:-

1. According to Hibbert ownership includes within it four kinds of rights-
   • Right to use of a thing;
   • Right to exclude others from using the things;
   • Disposing of the things; and
   • Right to destroy it.

Austin defines ownership as “a right indefinite in point of user, unrestricted in point of disposition and unlimited in point of duration”. His definition thus implies three attributes viz.:-

1. Indefinite user
2. Unrestricted disposition

² Galles GM “civilizationandprivate property” (FEE, January 12, 2018), www.fee.org , accessed April 24, 2023.

³ Ritish Raj, ownershipinIndiancontext, here/.

3. Unlimited duration

• According to Holland, “ownership is a plenary control over an object”, that is to say “the right to a thing which is complete in itself and exclusive of all others.”

• Pollock says “ownership is the entirety of the powers of the use and disposal allowed by law”. This definition highlights the importance of the owner’s freedom to use and dispose of their property as they see fit. It also implies that the owner has a certain level of autonomy over their property and that the law should generally respect this autonomy. Pollock’s definition is often cited as a clear and straightforward explanation of the concept of ownership.

• Karl Marx, a German philosopher and jurist, defined ownership in terms of ‘class struggle’, arguing that “ownership was a means of oppressing the working class and maintaining the power of the capitalist class over the means of production”.⁴

Characteristics of ownership

1. Right to possess: Possession means physical control over a thing or an object. To constitute ownership the owner must be entitled to the possession of the property.

2. Right to use and enjoy: The owner of the property has a right to use and enjoy the property he owns subject to certain restrictions / regulations by law/state. These are liberties. The right to manage it for example: the right to decide how it shall be used and the right to income from it. These are in fact liberties; the owner has liberties to use the thing. I. he is under no duty not to use it in contract with other who is under duty not to use it or interfere with it.

3. Right to Consume, destroy (liberties) or alienate: It means right to dispose off or gift or Mortgage or lease etc. The right of owner over property is absolute, which includes the right of alienation. The right to consume and to destroy is straightforward liberties.

4. Perpetual right / Indeterminate Duration: The owner of the property has perpetual right or the right for unlimited period over the property. Those who are not owners may be entitled to possess or use the thing but the period for which they are so entitled is a limited duration.

But in case of Ownership, it is of an indeterminate duration. Thus the interest of Bailee or lessee comes to an end when the period of bailment or lease is over. But the owner’s interest is perpetual and does not terminate even in owner’s death, because in that case the property will go to his legal hairs.

5. Actual right: The right of owner over the property is heritable. It passes to the legal hairs after his death.

Ownership has a residuary character: It is possible that an owner has parted or given away so many rights in respect of the things he owned. Still he continues to be the owner of the things in view of the residuary character of ownership. For example if and owner gives the lease of his property to A and easement to B, his Ownership of the land is now consists of Residual right. For example rights which remain when the lesser rights have been taken away.

⁴ Unknown author, Breathe Business: Karl Marx on Ownership.

Theories of ownership

Analysis of Austin’s view:-

According to Austin, ownership is a right over a determinate thing, indefinite in point of the user, unrestricted in point of disposition, and unlimited in point of duration.

Austin while defining ownership has focused on the three main attributes of ownership, namely, indefinite user, unrestricted disposition and unlimited duration.

The term ‘ownership’ is used with reference to ‘things’ which may be corporeal things, i.e., physical objects are incorporeal things such as goodwill, patents, copyright etc. Incorporeal things embrace all claims.⁵

• Indefinite User
• Unrestricted Disposition
• Unlimited Duration

Indefinite Use

It means that the owner of a thing is free to use or even misuse the thing in the manner he likes. The use of the word ‘‘indefinite” has some restrictions. The owner can be restricted by agreements or by operation of law, such as:-

• The owner of a thing cannot be allowed to use the thing in a manner which is injurious to others. This is expressed by the maxim, “sic utere tuo, ut alie-num non laedas” which means “so use your property as not to injure your neighbours’’
• The ownership may be subject to encumbrance in favour of others in which case the power of the user of the owner is curtailed by the rights of the encumbrance.
• The state officials have a right to enter the owner’s premises in pursuance of a warrant issued by a court or for any lawful purpose.

Unrestricted Disposition

The right of disposition implies the right of alteration, destruction or alienation of property. According to Austin an owner of a tiling has unrestricted right to dispose it off in a way he likes. Thus, he regards the right of alienation as a necessary incident of ownership. Again, the use of the word ‘‘indefinite” has some restrictions. The owner can be restricted by agreements or by operation of law, such as:-

• The owner of a thing cannot be allowed to dispose off thing in a manner which is injurious to others. This is expressed by the maxim, “so use your property as not to injure your neighbour’s.
• The ownership may be subject to encumbrance in favour of others in which case the power of the disposition of the owner is curtailed by the rights of the encumbrance.
• Legal restrictions may hamper the unrestricted disposition of the property.
• An owner of the property is not allowed to dispose of the same with a view to defect or delay his creditors.
• There are certain disabilities imposed on infants and lunatics with regard to the disposal of property.

Mitakshara school of Hindu law does not allow alienation of ancestral immovable property without the consent of the coparceners except for legal necessity. In Germany, a division of small farms beyond a particular limit is not permissible.

Unlimited Duration

According to Austin the time of ownership is unlimited in point of duration. The right shall exist so long as the owner and the thing exists. It is a perpetual interest which shall devolve upon the heirs of the owner after his death, but the right shall not be extinguished.

The abolition of Zamindari system India, the abolition of privy purses, nationalization of Bank, etc. are some examples of the fact that the ownership can be cut short by the state for a public purpose and its duration is not unlimited.

Criticism to Austin’s Definition

• It is pointed out that ownership is not a right but a bundle of rights. It is the aggregate of the sum-total of the rights of user and enjoyment. Even if some of the rights are removed and given to another person, the person in whom vests the residue is still the owner. The owner of a piece of land may mortgage or leases the same to another person. Although he has transferred a right, he is still the owner.
• Ownership is not merely a right but also a relationship between the right owned and the person owning it.
• The idea of the right of the indefinite user is also attached with some restrictions as discussed above. Many limitations can be put upon that user.
• The idea of unlimited duration is also attached with some restrictions as discussed above.
• Again, to say that an owner has an unrestricted right of disposition is not correct. His right of disposition of the property can be curtailed by the State. For instance, Article 31 (2) of the Constitution of India⁶ contained a provision that the State can take away the property of any person for public purpose.

Therefore, ownership can be cut short by the state for a public purpose and thus Austinian definition of ownership has been criticised by many writers. They argue that it is fallacious to think that ownership is a single right, in fact it is a bundle of rights including right of user and enjoyment.

⁶ Amended by the Constitution Forty-fourth (Amendment) Act, 1978

Analysis of Salmond’s view

According to Salmond, ownership denotes a relation between a person and the right vested in him. That which a man owns in all cases a right. It consists of complex of rights, all of which are rights in rem, being good against the entire world, and not merely against some persons.

Thus according to Salmond, ownership vests in the complex of rights which he exercises to the exclusive of all others and ownership is a relationship between a person and any right that is vested in him.

In Salmond’s view, ownership exhibits the following incidents;—

I. An owner shall have a right to possess the thing which he owns. He may, however, not be necessarily in actual possession of it.

II. He has normally the right to use and enjoy the thing owned.

III. The owner has a right to consume, destroy or alienate the thing.

IV. Ownership has the characteristic of being indeterminate in duration.

V. Owner has a residuary character. For instance, if a land-owner gives a lease of his property to A, an easement to B and a right of profit to C then his ownership shall consist of the residual rights.⁷

Criticism;-

• Duguit has criticised Salmond’s definition of ownership and asserted that what a person really owns is a ‘thing’ and not a right. It is, however, submitted that Salmond comprehends ownership in a wider sense to include both corporeal and incorporeal rights. Thus a man may own a copyright or a right of way. In this sense, he owns a right and not merely the material objects.
• Cook has characterized Salmond’s definition of ownership as an ‘unnecessary confusion’.
• Glanville Williams has observed that the definition of ownership as given by Salmond suggests that from the point of time, the concept of ownership of right must be prior to that ownership of material objects, but historically it appears just the reverse of it.⁸

⁷ Salmond : jurisprudencence (7th Ed) p. 277

⁸ V D Mahajan, jurisprudence and legal theory(6^th edn)

Holland’s view

Holland defines ownership as ‘a plenary control over an object’. According to Holland, an owner has three rights on the object owned. They are;

• Possession, it denotes control over material object and can be lost by lease or mortgage.
• Enjoyment, it implies the right of owner, however, limited by the rights of state.
• Disposition, it implies right of alteration, destruction or alienation of property.

He says that the right of possession is ‘inherent of ownership’. However, it may be separated as in case of a mortgage or letting out. According to him, the right of enjoyment means the “right of use and of acquiring the fruits, or in the increase of the thing – The right is limited only by the rights of the state or of other individuals.’’ The power of disposition means not only the power of alienation but it includes the power of alteration and destruction of the property.

Thus we can say that, he followed the concept of Austin and believed that ownership means to have a complete and unrestricted right over any property. He stated that, possession, enjoyment and disposition rights over any property are the main aspects of the right of ownership.

The Marxist theory of ownership⁹

This theory draws attention to the evil role ownership has played. It begins with individual working with its own tools and raw materials. Later, the profit accumulated through trading, manufactured products elevates owner to position to provide the tools and raw materials, and get other people to provide the labour.

The manufactured products, however, remain in his ownership, not in that of the labourer, and the owner continues to trade it as his own property. It is the concept of ownership that enables the exploitation of workers. Ownership of the means of production-tools and raw materials- became a source of power over persons for private profit.

This promoted inequality, because using the power of dismissal and threat of unemployment and consequent starvation, the employer was able to dictate unfair terms of service. The owners of the means of production became industrial commanders wielding enormous powers that strike at the fundamentals of society.

⁹ Rishi Jha, ownershipanditsincidents here .

Karl Renner’s view

Karl Renner (from Austria), following the Marxist analysis. The main point of his thesis is that in capitalist society, the formal legal concepts do not correspond to the real economic content of the society. And he took ‘ownership’ as an example of it. He further explained that in medieval times, ownership consisted of relation between man and thing.

After industrial revolution ownership has become a relation between a man and capital. In modern times, the ownership of capital virtually means the power over men, etc. although in legal theory ownership is still taken as to be a relationship between a person and thing

Thus, he expressed the view that law should take account of the increasingly public character of ownership of property by investing it with the characteristics of public law. Two concepts of ownership a public and a private have to be recognised. Ownership of the means of production should be public, that is nationalised, and only ownership of consumer goods should be opened to private individuals. The distinction lies not in the nature of ownership, but in the things capable of being owned.¹⁰

Thus, we can say that Professor Renner, has traced the gradual evolution of ownership in its social perspective. He pointed out that in early stages of development of society the owners of industries had to themselves collect tools, raw materials and labour resources to run the industry and they earned huge profits by the sale of their products. When they amassed sufficient wealth, they could afford to hire labour and run the industry by providing tools and raw material to them.

The industrialist was still the sole owner of the goods so produced and had complete ownership of the profits earned by the industry. Thus the ownership of means of production becomes the source and symbol of power and social status which the industrialists enjoyed on the strength of the labour working under them.

This eventually led to the development of management – labour relationship in the field of industries. The power of the employers to sack and change the service conditions of workers arbitrarily exhibited their influence in the society as a dominant class.

However, in course of time, the labour movement raised voice against the exploitative tendencies of indutrialists and capitalists as a result of which public ownership gained primacy over private ownership. The policy of nationalization of industries adopted by progressive socialist countries is directed towards the fulfillment of this objective¹¹.

¹⁰ B.N.Tripathi, Jurisprudence (legal theory) 19^th ed., Pg. 339-340.

¹¹ Paranjape, N.V, Studies in jurisprudence and Legal Theory, Central Law agency, ed.2013 Pg. no. 426.

What is possession?

Possession signifies custody, or physical control. It is the most typical form in which claims are made. It is a factual control over something, and Salmond defines it as a fact that creates a relationship between a man and the thing he possesses.

In Roman law, possession indicates ownership, i.e. it is an evidence to show ownership, and long possession of a certain property converts into ownership. Therefore, possession is the first stage of ownership.

But it may not always be true. Possession only entails ongoing exercise and enjoyment, and the person possessing the property may not necessarily be the owner of that property. In order to hold something within one’s possession, it is necessary to have physical connection with that thing, and to disallow anyone else to have possession of that thing.

According to Savigny; possession consists of two elements: corpus possession and animus domini. Corpus possession means physical control over a property, and immediate physical power to prevent others from acquiring or possessing that property.

Animus domini means the intention to hold some property in possession. Without the intention to hold property in possession, there can be no possession in reality, i.e. without animus domini, there cannot be corpus possession. Because the intention to possess property exists, the person exercises physical control over that property.

Salmond: stated that possession is of two kinds: possession-in-fact and possession-in-law. Possession in fact indicates actual, physical possession of property, even though that person may not be the owner of that property, whereas possession-in-law indicates that possession of the property by someone is recognised and protected by law.

Comparison between ownership and possession

The difference between ownership and possession are:

1. Possession and ownership are rights accruing on property, but ownership in essence is a greater right than possession. Ownership exists even though a person may not be in direct physical contact with his property, but since he has a better title on that property than anyone else, the property best belongs to him, even if it is in the possession of someone else.

Possession is only an objective realisation of ownership¹²; a claim being exercised on the property. In this way, it can be said that possession comes from ownership, but ownership does not come from possession.

It is true that possession is an evidence to claim ownership, but in many cases, a person may hold property under a false or fraudulent title, which needs to be ascertained. For example, a house given on rent is in possession of the tenant, but the actual owner of the house is the landlord, and the landlord has a better title on the property than the tenant.

2. When a person is in possession of property, he has an exclusive right on that property and can exclude others from exercising the same or similar rights on that property. However, these rights can be exercised by a person if he is the owner of that property, and the property is not owned by the possessor, since ownership is absolute and unconditional, whereas possession is conditional.

3. Ownership not only provides possessory rights, such as the right to use the property, but also proprietary rights, such as the right to dispose of property or to transfer it to another person.

Possession, however, does not grant proprietary rights, but only possessory rights. As a result, the transfer of property when it is owned is more difficult than transfer of property when it is merely in possession.

4. Possession is the external evidence of ownership. The possessor of a thing is presumed to be the owner of it and may put all other claimants to prove their title. Long possession is a source of ownership.

When possession is held adversely to the true owner for a period prescribed by the law (generally 12 years), the true owner’s right is extinguished and a title is created in the adverse possessor as he acquires it by right of prescription due to lapse of the specified time.

5. Bringing out distinction between possession and ownership Salmond pointed out that a person is said to be the owner of a thing when his claim receives the recognition and protection from the law of the State, but possession may be exercised and realised even without such recognition or protection from the law. Thus ownership has the guarantee of law but possession has some measure of security and value from the facts, without any possibility of support from law.

6. According to Dr. Sethna, the relationship between ownership and possession is same as that of body with soul. Just as existence of body is necessary for the realisation of soul, likewise possession is necessary and useful for the expression of the ownership because it (possession) is external and formal.

Ownership	Possession
1) Ownership involves the absolute rights and legitimate claim to an object. It means to own the object by the owner.	1) Possession is more the physical control of an object. The possessor has a better claim to the title of the object than anyone, except the owner himself.
2) Ownership is the right of the owner against the world indefinite in point of the user, unrestricted in point of disposition or destroying and unlimited in point of duration over a thing	2) As per the definitions, it is the continuous exercise of a claim to exclusively possess and use the object/thing.
3) Ownership itself gives the owner the right to possession.	3) However, it does not indicate the right to ownership.
4) The transfer of ownership is a technical and long process and involves conveyance	4) Transfer of possession is fairly easier and less technical.

5) Ownership is essentially a bundle of rights, all rights in rem.

5) It is not a right, just a prima facie evidence of ownership

Conclusion

Right to ownership has been guaranteed under the Article 300(a) of the Constitution of India. This right of ownership is subjected to various legal provisions and statutes. Ownership as a legal concept denotes a legal relation between a person who is called the owner of the right, and a thing over which he can exercise certain rights. The right of ownership is the most complete and supreme right that can be exercised over anything.

As we spoke about the evolution of ownership and ownership in various texts, we can conclude that ownership took place as a reason for civilization. People started to believe that they needed something to be owned for various reasons such as social status, assets etc.

Ownership was first seen in the Roman law, later it was accepted by all others. Many jurists argued on the concept of ownership but somewhere down the line the definition or the concept still stays ambiguous.

It is important to remember that ownership is not merely a bundle of rights, liberties and powers. It is also carries with it corresponding burdens in the nature of duties, liabilities and disabilities which prescribe and regulates how an owner should utilize his property for the benefit of other individuals or society.

Property owned by a person is liable to execution for the debts incurred by him. The liability to pay property tax, wealth tax, etc, is also imposed in the social interest. When control legislation imposes a restriction on the way in which one may use his property.

The typical individualist approach to ownership is reflected in the definition of Austin, which we have analysed earlier. However, gradually the emphasis began to shift from the individual to society-from ownership as a fundamental right of property to the wants of people and one’s duty towards others. It came to be recognised that limitation are integral to the concept of property and not an exception to an otherwise unlimited right.

Bibliography

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About the Authors

Jatan Singh and Aman Bhan Pachauri are 4th year student of Department of law, Aligarh Muslim University, Aligarh, Uttar Pradesh, India.