Why Restrain Alienation?

Abstract

In her informative article, Inalienability and the Theory of Property Rights,' Susan Rose-Ackerman raises anew one persistent question that has worked itself into the fabric of our general law: Why should there be any restraints on the alienation of property? As stated the question is an extremely broad one. The right of alienation, as part of the bundle of property rights, is set in opposition to the rights of possession and use. The types of property to which it can extend are real and personal, tangible and intangible. Each type of property may be alienated in a number of different ways, such as by sale, hire, mortgage, lease, bail, or pledge. These various forms of alienation in turn may be restrained in many ways. The restraints may be whole or partial; they may be by common law rule or by public regulation; alienation may be subject to an absolute prohibition, or it may be exercisable only upon the payment of money. As the possible range of restraints on alienation is very broad, it is important to order the inquiry so as to exhibit its essential features. This Article first seeks to explain why the right of alienation is a normal incident of private ownership. Thereafter it seeks to examine the principled reasons for limiting the right. These justifications in turn fall into two main groups. The first set is concerned with the practical control of externalities. These may take the form of aggression against third parties, the overexploitation of the common pool, or the exploitation of infants and insane persons. Alternatively, restraints on alienation may be used to redress some asserted distributional weakness within the present allocation of rights. My central thesis is that the first justification is sound, but that the second is not. The proper office for restraints on alienation is to provide indirect control over external harms when direct means of control are ineffective to the task. In working through this analysis I start from the assumption that the core function of the law is to protect all persons and their property against the force and fraud of another. There is no doubt in my view that this simple view of entitlements between persons lies at the heart of most of our legal system, both as it developed at common law, and as it has come to be modified by statute. It is simply inconceivable to ac-

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 87 citations exist upstream.