The role of the numerus clausus doctrine

Before I discuss the role of the numerus clausus doctrine in more detail, it may be useful to reflect
briefly upon the distinction between the object of a property right and the legal relation constituting the
rights/duties between subjects in regard to such an object. These two aspects of property entitlements
should be distinguished clearly. In what follows, I will focus on the right of ownership, not on other
absolute rights. It should be borne in mind, however, that what applies to the right of ownership mutatis
mutandis also applies to limited real rights. The object of a right of ownership (very often simply called
ownership) can be a corporeal thing (movable or immovable) as well as a right.12 To give an example
of the latter: a contractual right, although personal in nature and which only binds the parties to a contract,
is, nevertheless, part of a persons patrimony and can, as such, be the object of a right of ownership. The
effect is that it can be transferred to someone else. Whether you limit the right of ownership to rights
regarding corporeal things (as is done in the new Dutch Civil Code) or not is a matter of legal
terminology, closely related to the legal terminology and the structure of the legal system in which this
particular term is used. A good example of a very broad definition of the term can be found in Article 1 of
Protocol 1 of the European Convention on Human Rights.
Legal theorists have examined at great length what the object of ownership (and, consequently,
the object of rights derived from ownership, such as security interests) can be.14 This has led, e.g.,
Charles Reich to express the view that new property should be recognised as a legal category. In his own
words: New property represents a relationship between an organization and the holder, the organization
being the the source of the interest, the holder being the beneficial owner.15 Examples of this new
property, which he also describes as the development of economically valuable interests that are of vital
importance to the holders of those interests, are job security and the right to be in a national park or
forest.16 What can be the object of a right of ownership or other absolute right is a different problem area
compared to the question whether only those rights can be recognised as absolute (i.e. as rights against the
world) which are mentioned in a mandatory catalogue or whether freedom exists to create new absolute
rights. This latter question does not deal with the object of, e.g., ownership or security interests, but with
the type and content of the right which is claimed to be absolute in regard to a particular object. Of
course, the two questions interrelate. If - to give an example - it would be accepted that a right for every
citizen exists to walk in a national park, the question arises what the nature of this right is. Is it a public
law or a private law right? Assuming that it could be a private law right, would it be a personal or an
absolute right? If it is accepted as an absolute right according to private law, what does this mean in the
light of the existing numerus clausus? Here we touch the immensely complicated borderline both between
public law and private law and between the law of obligations and the law of property.17 Let me give

another example, to show how difficult it already is to draw a clear line only between contract and
property. Sometimes contractual rights can become commodities and are treated as objects of property
law. An illustration are swaps: contracts aimed at taking over - but only between the two parties among
themselves - the other partys position in regard to a loan agreement which that party concluded with, e.g.,
a bank. As a result of the swap, interest rates, currencies or both can be exchanged: the two parties who
conclude a swap will each behave as if he were the other party. If party A pays a fixed interest rate and
party B a floating rate, after the swap A will pay B the floating rate and B will pay A the fixed rate.18 A
swap is, as such, a derivative, like futures and options. It derives its own value from the underlying value,
in this case the existing loan contracts with the agreed interest rates and currencies. It is generally
assumed that swaps and derivatives are to be considered as contracts. However, once these contracts
have been standardised and in this form are traded in an exchange, they may also be considered to be
commodities and, hence, goods.20 If this qualification is correct, it would mean that relationships which
start as being contractual in nature may go through a metamorphosis and end up being, at least in part,
proprietary in nature.21 The very moment, however, the swap has to be executed (e.g. through netting), it
would, in this respect, still be a contract. The result of the metamorphosis would then be a legal
relationship of a hybrid nature.22 I will not go any further into this; I would only like to point out that if
this really would be the case, for reasons of clarity and certainty a formal line should be drawn between
the contractual side and the commodities side of a derivative. A suggestion for the drawing of this formal
line may be that a derivative becomes (at least in part) a commodity once it has been standardised and for
that reason can be traded almost anonymously at an exchange. An advantage of this formal approach is
that the proprietary side of the derivative will be clearly separated from its contractual side. The
proprietary side could, to offer an illustration, only be reflected in the formalities required for the transfer
of the derivative - the acceptance of screen trading as a new form of (instantaneous) transfer next to, e.g.,
assignment and the handing over of a bearer document without influencing matters like netting. It will be
obvious that such questions, as I can only outline here, are of a perplexingly complicated nature. In the
following pages I will only focus on the numerus clausus as such and not on the object of absolute rights,
including the borderline between contract and property.

For civil lawyers, the numerus clausus doctrine is a basic element of property law. For a better
understanding of what follows, it may be useful to reiterate what the numerus clausus doctrine is, in the
light of other basic elements of civil property law, before we contrast civil law with common law.
According to the numerus clausus doctrine the number of absolute rights is limited, their content is
restricted and it is laid down in mandatory rules how absolute rights can be created, transferred and

extinguished.24 The Dutch Civil Code recognises the following absolute rights: ownership, servitudes,
emphyteusis, superficies, right of apartment (condominium), pledge and mortgage. Generally speaking,
these rights can also be found in other civil law systems. In the civil law, ownership is the most absolute
right and it cannot be fragmented: only one person can be the owner, no distinction between legal and
economic ownership is accepted. In order to justify the binding nature of absolute rights against third
parties, these parties must be informed about those rights. With regard to movables, information is
provided by possession. She who possesses an object is at an advantage when she claims to be the owner,
as her right of ownership will be presumed. Information can also be given through registration. An
important example is the land registry. The numerus clausus doctrine is characteristic of the post-feudal
civil law systems. However, the feudal system still is the basis for property law in England and countries
with property law systems which are historically based on English law such as the United States.26 It
will, for that reason, come as no surprise that the numerus clausus doctrine, even the concept of numerus
clausus as such, was hardly ever discussed in English and American legal literature. This seems to be
changing. In 1993 Gordley pointed out that, at least from an American perspective, the conceptual
differences between civil and common property law are no longer fundamental.27 In a very interesting,
recent, exchange of views, Hansmann and Kraakman28 have debated with Merrill and Smith29 whether
the numerus clausus doctrine also exists, albeit perhaps implicitly, in American property law. They all
seem to agree that in American common law standardisation has taken place, which in its final result
comes close to the civil law numerus clausus. Merrill and Smith distinguish the following categories of
common law property rights.30 In regard to estates in land, they distinguish the following five possessory
interests: fee simple absolute, defeasible fee simple, fee tail, life estate and lease. Also with respect to
land, they distinguish the following five concurrent interests: tenancy in common, joint tenancy, marital
property, trusts and condominiums, cooperatives and timeshares. Concerning land, finally, the next four
basic forms of non-possessory interests are distinguished: easements, real covenants, equitable servitudes
and profits. With respect to personal property the available forms of property rights are more limited,
given the nature of movables and accounts receivable. Merrill and Smith argue that the numerus clausus
is the expression of an optimal standardization of property rights. The economic benefits of a new
property right must outweigh the costs for third parties to become informed about this new right.31 In
their view, the customising of property rights should, for several reasons, be done by the legislature and
not by courts. The legislature may give rules which can be clear, universally applicable, comprehensive,
stable, prospective and it may take into account whether and, if so, how implicit compensation should be
given to those affected by changes in property rules.32 Hansmann and Kraakman disagree with the
analysis offered by Merrill and Smith.33 They argue that property rights are characterised not, as Merrill
and Smith argue, by being good against the whole world, but by being enforceable against subsequent

transferees of other rights in an asset. Furthermore, they argue that the numerus clausus doctrine as it, in
their view, exists in the common law is not about standardisation, but about regulation of the types and
degree of notice required to establish different types of property rights.34 The purpose of regulation is
not that third parties are given information, but to enable third parties to verify ownership of the rights
offered for conveyance. In this verification process, property law assumes that all property rights in a
given asset are held by a single owner, subject to the exception that a partitioning of property rights across
more than one owner is enforceable if there has been adequate notice of that partitioning to persons whom
it might affect.35 The cost-benefit analysis, as defended by Hansmann and Kraakman, is aimed at
weighing the utility of the partitioning and the costs of giving notice.

1.2.2. Numerus Clausus of Property Rights

The principle of numerus clausus of property rights, or numerus clausus for short, refers to the idea that a
system of property law imposes limitations on private parties that want to create property rights.28 After
its literal meaning, in many legal systems the term numerus clausus in property law refers to a closed list
of property rights. Given its importance to society as a whole, many legal systems provide rules on
property law through legislation.29 In countries as France, Germany and the Netherlands, a separate part
in the Civil Code deals with the law of property. When these systems adhere to the principle of numerus
clausus this means that in principle only those property rights that are allowed by the Civil Codes
especially are recognised as property rights.30 As a result parties can only create property rights that fulfil
the criteria set by this legislation, leaving a limited freedom or no freedom at all to shape the content of
their property relations. The origin of the idea of numerus clausus can be found in the debates held after
the French Revolution. In France, where the feudal system of landholding had been abolished, the legal
system returned to a Roman-law inspired law of property in which, in contrast to the period before the
Revolution, there was a separation between the law of obligations and the law of property.31 In order to
express the new property law system, the new French legislature wanted to provide an overview in the
Civil Code of those property rights that from now on would be recognised.32 However, the real
discussion on the closed system of property rights as a principle of property law and therefore a part of
property law theory originates in nineteenth-century German legal thinking.33 The German Brgerliches
Gesetzbuch (BGB) adopted Von Savignys theory on Vermgensrecht, within which property law and the
law of obligations form separate and distinctive parts of the law.34 In the law of property as a separate
area of law, because of its foundations taken from Roman law, the most extensive property right was a
unitary and absolute right of ownership. All other property rights were considered rights lesser than the
right of ownership but still with third-party effect. Because of this effect, and to protect the newly created

unitary and absolute right of ownership, the Civil Code limited the number, but also the content, of
property rights. In doctrinal terms this idea of limitation of property rights or Typengebundenheit can be
expressed with two different terms that have become commonly accepted in explaining the principle of
numerus clausus; the limitation on the number of rights has become known as Typenzwang and the
limitation on the content of the rights as Typenfixierung. Strongly connected to the separation between the
law of obligations and the law of property, and the resulting distinction between property rights and
personal rights, the principle of numerus clausus provides a filter to decide whether the law of property
applies to a certain legal relation. Depending on the legal system there are different ways of describing the
numerus clausus. When the principle of numerus clausus has found expression in the form of legislation,
in particular as a part of the Civil Code, from which parties may not deviate, we could speak of a rule of
numerus clausus. However, there are also legal systems in which the principle has not found expression as
a formal rule. In some legal systems, for example, there is no Civil Code, and another source of law has a
more important position than general legislation. In these legal systems the principle of numerus clausus
also finds expression, usually through a decision of a court of law.36 Finally, there are also legal systems
in the world that explicitly adhere to an open system of property rights, known as numerus apertus. These
systems do not have a rule of numerus clausus, but nevertheless impose limitations on parties when it
comes to the creation of new, as yet unknown, property rights.