Priority

Priority in property law can be a complex term to understand in some cases. In essence, the legal concept of priority occurs when different parties claim interest in a property. Typically these claims are inconsistent of each other which may result in disputes, therefore needing the courts to become involved. A court will resolve the dispute by adjudicating all of the priorities of the interests claimed. There are legal rules that need to be followed when deciding on priorities in a legal claim against property.

Brief Historical Background

One historical quote regarding priority in property law is from John Hardy from England. He said ” For the title to be valid, we must incorporate the company or association for the living”. Even though this is a statement from English property law, this statement has been used thoroughly when talking about property law in the United States.

In the early 1790s, there was an influential professor of law and US Supreme Court Justice that studied the philosophical side of American property law. James Wilson believed in two premises, that eventually became the basis of property law. The first premise is that every crime has an injury and the second that an injury involves a violation of a right. These two statements provide a foundation for property law. James Wilson wrote an essay called “On the History of Property” which traced the history of property and the evolution of possession of property. Wilson also discusses the right of property and divides property into three degrees – possession, use, and disposition; possession and use; and possession. Possession is the lowest degree of right and possession, use, and disposition is the highest degree of right.

Precedent Setting Cases

There are a few precedent setting cases in the area of property. One such case is the Dearle versus Hall which took place in 1828 in England.

In this precedent setting case, a beneficial owner of a trust fund first assigned it to party A by way of security and then to party B in an outright way. Party A was not given notice of the assignment to the trustees of the trust fund. When party B made inquiries to the trustees, he did not find out about the assignment to party A, as the trustees were not aware of it.  The rule that came out of this case was how to determine the priority of competing and equitable claims of the same asset. In essence the rule states that where the equities are equal between the two (or more) claimants, the claimant who is first to notify the legal owner of the asset (or the trustees in this case) may have a first priority claim. Many criticisms have arisen over the ruling in Dearle versus Hall however, the concept still stands. It is very much existent in the credit and bankruptcy area of property law.

Defenses

There are not any real defenses in priority rulings in property law. Instead there are rights in property law. Property rights are rights over things that can be enforced against other people. Property rights differ from contractual rights and personal rights even though in some circumstances two kinds of rights may be involved. An instance of intellectual property right are trademark and patent laws, where there is a right of priority (also known as a priority right) which is a time limited right that is set in motion by the first filing of an application for a trademark or patent.