This particular scenario is pretty simple in our house. If you have something you have been given as a gift or purchased yourself (a ball) and you really treasure it, it's your responsibility to keep it put away in your room when you aren't playing with it. And if you've done that, we will respect that it's yours. If its out, and you aren't playing with it, it's fair game. So in our house since E wasn't using the ball and had left it out and about, S would get to play with it.
More generally, I don't think discipline done correctly breaks anyone's spirit. I think discipline is a chance to guide kids into self-discipline- and a lack of self discipline as an adult can be an awful experience for everyone. Discipline is a gift, even if kids don't always welcome it. And when you create some good clear guidlines you can create a safe way to offer age appropriate freedom of choice for the child. In our case, the child chooses to put the toy away every time he is done playing or understand that he will be sharing it. The freedom of choice belongs to the child but within the guidlines we set.
