The term real property signifies that property which is of a fixed, immovable nature. The term personal property signifies property which in its present state is of a movable, temporary character.
It has been said that the distinction between real and personal property is merely historical and not logical. But there are important differences in the very nature of things between that which we call real property and that which we call personal property and this distinction is entirely logical. There is a real difference between that sort of property, as a pocket knife or cane, which we can carry away, conceal or destroy, and a piece of land which is fixed and permanent. And the law makes, as men in the usual dealings of life, make, important distinctions. Real property includes the ground and all that is attached thereto for its permanent improvement. Personal property is every other species of property. Thus A owns several acres of land. He puts thereon a house, a barn, fences, and a windmill. All of these things are real property. He may indeed remove them and make them personal property. But until he does so, they are a part of the real estate. If he sells the farm, describing it by metes and bounds, all of these improvements become the property of the buyer of the farm though no mention is made of them.
Property must be either real or personal, although we will find that from different standpoints, some property which is near the border line may be regarded as either real or personal. But judged from the same standpoint (and as for most property judged from any standpoint) at any given moment property is either personal or real.1
Property though at any time either personal or real may be at different times personal and real. Thus clay in its natural state is real property. Being removed and placed in wagons, it becomes personal property. Baked into bricks, it is personal property. Built into a house it becomes again real property. The house is torn down and the bricks scattered upon the ground. The property is again personal. The same may be said of a tree, cut down, made into benches and these nailed to the floor of a schoolhouse.
Real property we also call "realty" and "real estate;" personal property we call "personalty," and "personal estate."
We will now consider some practical differences in the law applicable to these two sorts of property.
(1) As to descent and distribution.
Real property of a deceased person in case he leaves no will goes direct to his heirs, and in case he leaves a will, direct to the devisees therein named. Personal property of a deceased person, in case he leaves no will
I. Property is sometimes said to be real, personal or mixed. But by the word "mixed" is indicated property which may be regarded either as real or personal from different standpoints. It is believed that in all cases property is from any particular standpoint at any instant of time either real or personal. It either goes with the real estate or it doesn't and the use of the word "mixed" is unfortunate.
goes to the administrator, or in case he leaves a will to the executor (or administrator if no executor). After payment of debts it is to be transferred to the distributees, or legatees.2
(2) As to transfer of title inter vivos.
The law makes a distinction between personal and real property in respect to the method of transfer from one living person to another. Real property can be transferred only by deed, a formal instrument of much importance. It is true title to real property may be acquired without any writing, as by adverse possession, but this is not transfer by one person to another. But personal property may be transferred (as it usually is) by mere delivery of possession, as where one purchases goods at store and when a bill of sale or other writing is given it is more to be regarded as the evidence of the transfer, while the deed to real estate when delivered, itself effectuates the transfer of ownership.
(3) As to dower and title by marriage.3
By the common law a husband had certain rights in the property of his wife. He took her personal property as his own absolutely. In her land he got merely a temporary estate called, while the wife is living, an "estate during coverture" and after her death, the husband surviving her, called an "estate by curtesy." These estates are only life estates and therefore cease entirely with the death of a husband just as a tenancy in land ceases when a term expires for which it was created. Modern statutes have taken away the right of the husband to his wife's personal property and many states have also changed the estate of curtesy, although in all states a husband has still certain rights in the land of his wife. The wife by her marriage acquired no rights to the personal property of her husband and does not do so now. Of course upon the husband's death the wife has certain rights and takes a part of the personal property of which he may die possessed but that is an entirely different matter. In the land of the husband the wife gets a dower interest which is called inchoate during his life and which becomes at his death, if she survives him, a dower estate, which is a one-third interest for life which the wife has in the land of her deceased husband. It is only a life estate and terminates absolutely at her death.
2. See Part VIII post for extended discussion on the subject of Estates and Wills.
3. Considered more at length hereafter.
(4) As to right to remove.
We will see in our study of fixtures that certain property may be removed if it is to be regarded as personal estate and cannot be removed if it is to be regarded as real estate. Of course the owner of the land can always tear down his buildings or dig up his soil and thereby convert real property into personal property, but where the rights of two parties are concerned, as that of landlord and tenant, or that of seller and buyer, one claiming the real property and the other the personal property, the question becomes very important what is to be regarded as personal property and removable as such.
(5) As to local law applicable.
We may say as the general rule that the law of the place in which real estate is situated governs it entirely, while for some purposes personal property is to be regarded as situated at the domicile of the owner no matter where it actually is.