Aggregate Alienability
Aggregate Alienability
Luke Meier 0
Rory Ryan 0
Recommended Citation
0 This Article is brought to you for free and open access by Villanova University Charles Widger School of Law Digital Repository. It has been accepted for inclusion in Villanova Law Review by an authorized editor of Villanova University Charles Widger School of Law Digital Repository
Meier and Ryan: Aggregate Alienability
LUKE MEIER* AND RORY RYAN**
Tlens by which to understand the complicated law regarding the
valid
HIS Article proposes a new concept—“aggregate alienability”—as a
ity of privately-imposed restraints on the alienability of real property.
Modern scholars have tended to explain this law—which sometimes
invalidates restraints and sometimes upholds and enforces restraints—as simply
a “naked preference.” In those instances in which the restraint is upheld
and enforced, the law is said to prefer the alienation rights of the grantor
(the party imposing the restraint). When the restraint is stricken, the law
is said to prefer the alienation rights of the grantee (the party on whom
the restraint is imposed). This Article rejects the notion that the nuanced
law regarding the validity of restraints on alienability is best explained as
simply a naked preference in favor of some parties over others. Instead,
this Article argues that the rules regarding the validity of restraints on
alienation are actually based on a rough prediction as to how to maximize
property alienability. In some instances, maximum alienability is best
achieved by invalidating the attempted alienability restraint. In other
instances, however (and somewhat counter-intuitively), maximum
alienability is best achieved by upholding and enforcing an alienability restraint. In
either instance, the legal rules about the validity of a particular restraint
are not a preference for either the grantor or the grantee, but an attempt
to maximize efficiency by facilitating the alienation of property.
I. INTRODUCTION
The legal concept of private property is fundamental to the workings
of a capitalist market.1 In a capitalist system, decisions regarding resource
allocation are primarily made at the individual level.2 Government creates
* Professor of Law, Baylor Law School.
** Professor of Law, Baylor Law School.
1. See AYN RAND WITH NATHANIEL BRANDEN, ALAN GREENSPAN & ROBERT
HESSEN, CAPITALISM: THE UNKNOWN IDEAL 19 (New Am. Library 2d ed. 1967)
(“Capitalism is a social system based on the recognition of individual rights, including
property rights, in which all property is privately owned.”); Paul H. Rubin &
Tilman Klumpp, Property Rights and Capitalism, in THE OXFORD HANDBOOK OF
CAPITALISM 204, 204 (Dennis C. Mueller ed., 2012) (“Property rights are a necessary but
not sufficient condition for capitalism.”).
2. See GARY WOLFRAM, A CAPITALIST MANIFESTO: UNDERSTANDING THE MARKET
ECONOMY AND DEFENDING LIBERTY 1 (2012) (“The genius of capitalism is that it
is . . . a fluid system with millions of individual exchanges, resulting in the most
efficient allocation of resources.”); see also MILTON FRIEDMAN, CAPITALISM AND
FREEDOM 15 (1962) (“[A] major source of objection to a free economy is precisely that
it . . . . gives people what they want instead of what a particular group thinks they
ought to want.”); LUDWIG VON MISES, SOCIALISM: AN ECONOMIC AND SOCIOLOGICAL
(1013)
1014
[Vol. 60: p. 1013
and enforces entitlements to “property,” which allows individual users to
decide what to do with “their” property.3 By enforcing private agreements
to trade these rights, resources flow to the party in the best position to do
something beneficial with that resource. This result is in society’s interest
as a whole.4 Indeed, one of the “sticks” in the “bundle of rights”
associated with property is the right to alienate that property according to the
user’s perception of what is in his best interest.5
In order for this flow to the “best” user to occur, the resource must
remain free of legal impediments to transfer. As such, the common law
has generally strived to keep property freely alienable, particularly real
property.6 In some instances, such as with the rule against perpetuities,
common law rules have developed to deal with private decisions that
might indirectly inhibit the transfer of real property.7
The most obvious example of the common law’s effort to keep
property alienable, though, is the set of rules invalidating attempts by
individuANALYSIS 537 (J. Kahane trans., Ludwig von Mises Inst. new ed. 2009) (1951) (“The
issue is always the same: the government or the market. There is no third
solution.”).
3. See Richard A. Epstein, All Quiet on the Eastern Front, 58 U. CHI. L. REV. 555,
560 (1991) (“The first mission of the legal system is to determine an initial set of
property rights from which subsequent bargains can go forward at reasonably low
cost. . . . The third mission of the law is to facilitate the voluntary exchanges of
property rights—the law of contracts.”).
4. See II (...truncated)