In this blog post, we will look at various cases to see whether you can claim ownership based on possession alone, based on the difference between the concepts of possession and ownership.
Is the person using an item the owner of that item? Possession refers to the actual control of an item. In contrast, ownership is defined as the right to use, profit from, or dispose of an item. Therefore, the possessor and the owner are not always the same.
Direct possession refers to the state of physically controlling an object, including borrowing or storing it. In contrast, a person who has the right to demand the return of an object from the person who borrowed or stored it can also be considered to have de facto control. This state of having the right to demand return is called indirect possession. Both direct and indirect possession are forms of possession. Possession also serves to publicly announce the owner. Public announcement means informing others of who has what rights to an object. Among objects, most movable property, such as pianos, gold rings, and bags, is publicly announced as owned by the person in possession.
In order for ownership of an object to be transferred, the owner must become the transferor, enter into a valid transfer agreement with the transferee, and publicly announce the transfer of ownership. The transfer of ownership of movable property whose ownership is publicly disclosed through possession is publicly disclosed through the transfer of possession. There are two cases in which ownership is transferred through indirect possession and the transfer of ownership is publicly disclosed: “revision of possession” and “transfer of right of return.” For example, if A agrees to transfer ownership of a piano to B but agrees to let B borrow it for three days, B has the right to demand that A return the piano after three days. In this case, the transferor retains direct possession, but the transferee is deemed to have taken possession, which is called a change of possession. On the other hand, suppose that C entrusts a bag he owns to D and has the right to demand its return, but then enters into a contract with E to transfer ownership of the bag to E. If C notifies D that the owner of the bag has changed and asks D to return the bag to E, D’s right to demand the return of the bag in C’s possession is transferred from C to E. This case is called transfer of the right to demand return.
Even if the transferor is not the owner, can the transferee acquire ownership when he receives the transfer of possession? In the case of movable property that is publicly known to be in possession, if the transferee exercised sufficient care but did not know that the transferor was not the owner, and entered into a valid contract with the transferor and made a public announcement of the transfer of possession, the transferee acquires ownership. This is called “acquisition in good faith.” However, acquisition in good faith cannot be achieved through transfer of possession by indirect possession. When the transferee acquires ownership through acquisition in good faith, the original owner loses ownership even if they do not want to.
This difference between possession and ownership can lead to various legal disputes. Problems become even more complicated when the ownership of goods is unclear in commercial transactions. For example, if a company lends machinery to another company, and the ownership of the machinery is transferred several times in the meantime, it is important to determine who the actual owner is. In this case, each company can assert its rights through possession and ownership disclosure. Therefore, in order to prevent legal disputes, it is important to clearly understand the concepts of possession and ownership and to document and record them.
On the other hand, items that must be disclosed through registration, which is a public record managed by the state, are not subject to acquisition in good faith. Movable property such as automobiles and aircraft, which are designated by law as subject to registration, are publicly disclosed through registration, while real estate such as land and buildings are publicly disclosed through registration. If acquisition in good faith is permitted for such high-value property, it would result in the deprivation of ownership against the will of the original owner. This is undesirable as it focuses only on transaction security and neglects the protection of the rights of the original owner.
On the other hand, in everyday life, the concepts of possession and ownership are closely related to trust between individuals, in addition to legal issues. For example, if you lend money to a friend and receive a watch as collateral, the possessor of the watch is the friend who borrowed the money, but the owner is still the person who lent the money. In this case, the person who borrowed the money has the right to retrieve the watch, and this relationship between possession and ownership is based on mutual trust.
In conclusion, possession and ownership are important concepts in terms of rights and use of property. To avoid legal disputes, it is important to clearly understand the difference between the two and seek legal advice when necessary. It is also important to understand these concepts well in everyday life and maintain relationships based on trust.
