Equitable Estates And Interests - Definition - Law Dictionary Home Dictionary Definition equitable-estates-and-interests

Definition :

Equitable estates and interests, Rights relating to property of which the legal ownership is vested in another person, or in the equitable owner himself in another capacity. The rights arise whenever a person obtains a title to have the property or an estate or interest in it vested in himself, e.g., by contract or by any conveyance or assignment which does not by law transfer or vest the legal estate or ownership in the transferee, by mortgage or charge, and whenever a trust arises, either express, constructive, implied or by operation of law. In theory the legal owner alone was entitled, both in law and equity, to the property, and he alone was responsible for the obligations and incidents attaching to the property, the beneficial owner merely having a personal right inequity to force the legal owner to carry out his obligation or trust, but the rights and obligations of beneficial ownership became recognized and affected by statute. The Statute of Uses turned the beneficial right or use in real estate into the legal estate, although the statute did not extend to any use or trust upon a use (Tyrrel's case (1557) Dyer, 155 a), and the statute did not more than to impose a simple and merely verbal formality in the operative words of the transfer of a legal estate, leaving the principle of equitable ownership unaffected in its application and its effects. At the same time the Statute, being based on the elastic nature of trusts, introduced a more flexible disposition of legal interests in land.

Under the (English) Statute of Frauds (29 Car. 2, c. 3, s. 7) trusts creating equitable estates or interests in land, including leaseholds and copyholds, were required to be in writing signed by the person entitled by law to declare the trusts, but this did not apply to trusts arising by construction, implication, or operation by law, and see now (English) L.P. Act, ss. 52 to 55.

Among other statutes which assimilated some, if not all, the incidents of beneficial ownership inequity to legal ownership, mention may be made of the Statute of Frauds (29 Car. 2, c. 3, s. 10), which made equitable estates of inheritance assets by descent, the (English) Real Property Limitation Acts, 1833 (3 & 4 Will. 4, c. 27), ss. 24 and 25, and 1874 (37 & 38 Vict. c. 37) (imitation of suits), the (English) Judg-ments Act, 1838 (1 & 2 Vict. c. 110), extending 29 Car. 2, c. 3, s. 10 (liability under writ of elegit), the (English) Land Transfer Act, 1897 (60 & 61 Vict. c. 65), s 1, and the (English) Administration of Estate Act, 1925 (upon the legal interpretation of the words 'real estate' in those Acts). The (English) Dower Act, 1833 (3 & 4 Will. 4, c. 105), subjected equitable estates to dower, and the (English) Intestates Estate Act, 1884 (47 & 48 Vict. c. 71), to escheat. As between the legal and the beneficial owner, equity followed the law, by analogy to the law applicable to ownership in property of the same nature. The rules of descent were the same; words of limitation were generally construed in the same way [see Moncton's Settlement, (1913) 2 Ch 536]. See now L.P. Act, 1925, s. 69, but technical words of limitation are still required for the creation of equitable interests in tail in either real or personal property. [(English) L.P. Act, 1925, s. 130]

In regard to equitable interests in personal property, equity also followed the law; the legal incidents fall upon the legal owner, who has a right of indemnity against the beneficial owner, see Halsbury,L. of E., Vol. 13, pp. 96, 97. The equitable right of a beneficial owner of land or any interest therein against the legal owner became a charge upon or attached to the property itself; see Nesbit and Pott's Contract, (1905) 1 Ch 391: (1906) 1 Ch 386, binding not only the legal owner, but all persons deriving title under him, exept purchasers for value without notice. This is still the law subject to statutory modifications which enable certain persons to convey land free from equities in certain cases. See ESTATE OWNER, LEGAL ESTATE, PERSONAL REPRESENTATIVES, SETTLED LAND, TRUS-TEES FOR SALE, MORTGAGEE, SALE BY ORDER OF COURT, and subject to statutory modifications as to notice and registration, see NOTICE,LAND CHARGES. The rights of the person entitled to the equitable estate or interest against the 'estate owner' are set out in (English) Law of Properties Act, 1925, s. 3.

Under the (English) land legislationw of 1925 the term equitable interests was extended to many estates, rights and interests which, previously, were recognizable and enforceable at law. All estates, interests and charges in or over land which are no longer legal estates (see LEGAL ESTATE) are included in the term [(English) L.P. Act, 1925, s. 1(3)(8) and s. 205(1)(x.)(xi.)] as to the importance of registration of some equitable interests, see LAND CHARGES and SEARCHES. As to the automatic vesting of legal estates in a beneficial owner entitled immediately after 1st January, 1926, to require any legal estate (not vested in trustees for sale) to be conveyed to him, see (English) L.P. Act, 1925, 1st Sched., Part II., par 3, as amended by the (English) L.P. Amendment Act, 1926.

By (English) L.P. Act, 1925, s. 3(3), the owner of a legal estate (the estate owner) is bound to transfer a legal estate to any person who has become entitled to require that estate to be vested in him, and see UNDIVIDED SHARES. See MORTGAGE.

Means a mere equity, which is a procedural right ancillary to some right of property, for ex-an equitable right to have a conveyance rectified, M.P. Mathur v. D.T.C., AIR 2007 SC 414.