Acquisition by Accession

Terms:


Accession:
The acquisition of title of personal property that is attained through the process of putting labor or raw materials into the improvement of the personal property.


Acquisition by accession occurs when one person steals the personal property of someone else and adds labor and/or materials to it. The person who owns the original property is obviously always entitled to recover the value of the original property at the time that it was taken. The question becomes whether or not the original owner can retrieve the modified property, or if the thief (who added the labor and/or materials) gets to keep the modified property, and can simply pay the original owner the value of the stolen property at the time of the theft. 

The rule here is that where a thief takes raw materials from an owner, the owner of the raw material is entitled to the final product created by the thief, unless the thief’s creation has increased the value of the raw material to the extent that it would be unfair to give the final product to the original owner. For example:

Leonardo owns a lumber yard. While wandering through the lumber yard, Michelangelo sees a solid block of wood that he then steals and carves into a statue. The block of wood was worth ten dollars. The statue is appraised at ten thousand dollars. There is no question that Leonardo is entitled to collect ten dollars for the block of wood. However, Leonardo would not be entitled to retrieve the statue or to collect $10,000, because it would be an unfair windfall for Leonardo to gain $9,990 because of Michelangelo’s work.

What constitutes a sufficient increase to allow the thief to keep the finished product is determined on a case by case basis. For example:

Michelangelo takes a ten dollar piece of wood from Leonardo and carves it into a statue that is appraised at twelve dollars. In this case the value of the wood has increased, but not to the extent that it would be unfair to award the statue to Leonardo. Therefore, in this case, Leonardo would be allowed to recover the statue.

This rule applies even if the “thief” took the materials in good faith (e.g, ,he thought that nobody owned the raw materials). This is simply because, even if the taker of the materials acted in good faith, it is unfair to penalize the true owner. In addition, even if the taker did not intend to steal the property, it requires at least some level of negligence to take someone else’s property without the consent of the owner and appropriate it to one's own use.

In certain jurisdictions, even if the value of the raw material has increased dramatically, the owner of the raw material will still be able to recover the new creation if the creator took the raw material in bad faith. For example: 

Michelangelo takes a ten dollar piece of wood from Leonardo and carves it into a statue that is appraised at ten thousand dollars. In these jurisdictions, even though the value of the wood has been increased substantially, Leonardo would still be able to recover the statue. However, if Michelangelo saw the piece of wood lying there and didn't know that it belonged to anybody before he took the wood and carved the statue, then Michelangelo has not acted in bad faith, and he would be able to keep the statue even in those jurisdictions.

In a situation where new materials are added by the taker to the initial raw materials, then ownership of the product will depend on whether or not the original raw materials were taken in good faith. If the taker acted in bad faith (he took the raw materials with the intent to steal them), then the same rule will apply as in the above situation, where only labor was added to the raw materials. If the taker acted in good faith, then the final product will belong to whoever contributed the most raw material to the final product. (Of course, whoever keeps the object has to compensate the other party for his or her contribution of raw materials to the final product.)