This article describes the differences between Legal Ownership and Equitable Ownership.
- The concept of legal ownership has arisen from the rules of common law.
- Illustration: A has given loan to X, who executed a promissory note in favor of A. A is the legal owner of loan.
- A legal owner is a trustee for the equitable owner in the eye of equity.
- Legal ownership is certain.
- Where these two rights conflict, legal ownership prevails.
- A legal mortgage of land must be created by deed.
- The concept of equitable ownership has arisen from the rules of equity.
- Illustration: B is the equitable owner of the debt.
- The common law does not recognize the equitable ownership at all.
- Equitable ownership is uncertain.
- When these two rights conflict with each other equitable ownership becomes weaker than legal ownership.
- An equitable mortgage may be created by a written agreement or by a deposit of title-deeds.