What are the differences between Legal Ownership and Equitable Ownership?

This article describes the differences between Legal Ownership and Equitable Ownership.

Legal Ownership

1. The concept of legal ownership has arisen from the rules of common law.
2. Illustration: A has given loan to X, who executed a promissory note in favor of A. A is the legal owner of loan.
3. A legal owner is a trustee for the equitable owner in the eye of equity.
4. Legal ownership is certain.
5. Where these two rights conflict, legal ownership prevails.
6. A legal mortgage of land must be created by deed.

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Equitable Ownership

1. The concept of equitable ownership has arisen from the rules of equity.
2. Illustration: B is the equitable owner of the debt.
3. The common law does not recognize the equitable ownership at all.
4. Equitable ownership is uncertain.
5. When these two rights conflict with each other equitable ownership becomes weaker than legal ownership.
6. An equitable mortgage may be created by a written agreement or by a deposit of title-deeds.