Are legal/equitable title and Legal/equitable ownership the same thing!?

...because I've been trying to distinguish the difference and the author of my Commercial law book uses both phrases and it is confusing the **** out of me.

Reply 1

roh

No, they are not.

The legal title to a property is something that exists permanently with any property and its owner, so if you got up now and went and bought a sandwich and a drink from somewhere you would hold the legal title to those products.

Say you then decide to give the drink to your sister, but decide she's not old enough to have full responsibility for it yet so declare your Mum a trustee of the drink for your sister. At this point the legal title for the drink is passed to your Mum but your sister now has an equitable title in the drink. This equitable title is created by your making of the trust. Your Mum now keeps the drink on trust for your sister, and thus must not 'enjoy its benefits', which here would mean drinking it. After a period specified by you the drink is handed to your sister and she gains the legal right, and the equitable right disappears.

Obviously you wouldn't do this for a drink but here's a more plausible real life scenario:

Joan and Bill have 2 grandchildren, siblings, both below 18. They want to leave 10 thousand pounds each to the grandchildren should they die but only want them to have access to it once they are adults. At this point only a legal right, that of Joan and Bill, exists in the money. Thus they create a trust in their will that if they die the legal title for the 10k will transfer to the grandchildren's Mother but the grandchildren have an equitable title in the money. This equitable title means the mother cannot use the money for her own purposes and all benefits of it, notably interest accrued, are to be kept for the grandchildren. Again, once the legal right passes to the grandchildren the equitable right vanishes.

Trusts are used in commercial settings, see cases like 'Re Kayford' (1975) and Farepak Food and Gifts (2006).

Also, worth checking out the introductory chapter of an equity textbook.

(edited 11 years ago)

Reply 2

TheCount.

Original post by roh

for your sister, and thus must not 'enjoy its benefits', which here would mean drinking it. After a period specified by you the drink is handed to your sister and she gains the legal right, and the equitable right disappears.

Obviously you wouldn't do this for a drink but here's a more plausible real life scenario:

Joan and Bill have 2 grandchildren, siblings, both below 18. They want to leave 10 thousand pounds each to the grandchildren should they die but only want them to have access to it once they are adults. At this point only a legal right, that of Joan and Bill, exists in the money. Thus they create a trust in their will that if they die the legal title for the 10k will transfer to the grandchildren's Mother but the grandchildren have an equitable title in the money. This equitable title means the mother cannot use the money for her own purposes and all benefits of it, notably interest accrued, are to be kept for the grandchildren. Again, once the legal right passes to the grandchildren the equitable right vanishes.

Trusts are used in commercial settings, see cases like 'Re Kayford' (1975) and Farepak Food and Gifts (2006).

Also, worth checking out the introductory chapter of an equity textbook.

Sorry I don't think I made my question very clear. I appreciate the answer though. I basically wanted to know the difference in Ownership and Title or whether they were the same thing. I was already aware of the difference between legal and equitable title.

Are title and ownership synonymous? For example: When someone says 'legal ownership' or 'legal title' do they mean the same thing?

Reply 3

roh

Original post by TheCount.

Sorry I don't think I made my question very clear. I appreciate the answer though. I basically wanted to know the difference in Ownership and Title or whether they were the same thing. I was already aware of the difference between legal and equitable title.

Are title and ownership synonymous? For example: When someone says 'legal ownership' or 'legal title' do they mean the same thing?

No, legal ownership is having both legal title and the use/enjoyment/whatever of the property. Whereas you can have legal title without ownership, eg. a trustee.

Not sure what equitable 'ownership' is I'm afraid, maybe it just means the beneficiary?

Reply 4

Forum User

The legal owner is the person with absolute title to the absolute interest in the asset. Title and ownership are very similar. If T steals A's goods, then A is clearly still legal owner. T also has an title to the absolute interest in the asset, but his is 'relative', in that it is no good against A (but is good against everyone else in the world except someone claiming through A). T is not any kind of owner of the goods. So title and ownership are not quite the same.

But there is no requirement that the owner have the use or enjoyment of the goods. The trustee is the legal owner of the trust property, as well as having legal title to it, even though he cannot get any 'advantage' out of that ownership.

Equitable ownership just means the person who is absolutely entitled to the asset in equity - which will usually be the beneficiary under a bare trust (but not necessarily an express trust).

Reply 5

nulli tertius

Original post by TheCount.

...because I've been trying to distinguish the difference and the author of my Commercial law book uses both phrases and it is confusing the **** out of me.

Strictly speaking the answer is "no" but I suspect in the context the author has used them, it is probably "yes".

Ownership is the status that results from having title. Title is the mechanism by which one proves ownership.

The other posters have tried to explain the difference between ownership at law and in equity but I don't think that is the question you are asking.

Reply 6

Estreth

Without going into my opinion on this - it's worth noting that the question you're asking is very far from being settled in the academic literature.

I agree with nulli tertius that if a single writer seems to be using both words interchangeably without thinking anything of it, then that writer is probably using them to mean the same thing. But there is a range of opinions on what 'title' and 'ownership' mean. William Swadling would tell you that there's no such thing as ownership, for instance. I would recommend reading Ben McFarlane's The Structure of Property Law on this if you want to explore it further. (Don't have the book in front of me but if you look up 'ownership' in the index you'll probably find your way to the most appropriate sections.)

Reply 7

Forum User

Original post by Estreth

I would recommend reading Ben McFarlane's The Structure of Property Law on this if you want to explore it further. (Don't have the book in front of me but if you look up 'ownership' in the index you'll probably find your way to the most appropriate sections.)

Ooh, it's on Kindle ! Buying it now, looks interesting.

Reply 8

nne

What does equitable ownership means ?

Reply 9

TurboCretin

Original post by TheCount.

...because I've been trying to distinguish the difference and the author of my Commercial law book uses both phrases and it is confusing the **** out of me.

It was never brought to my attention on my law degree that there is any significant difference between the two. For all practical purposes they are interchangeable.

Legal dictionaries define title as a person's right of ownership, and define
ownership as a person's exclusive right to use, possess and dispose of property.

Reply 10

TurboCretin

Original post by nne

What does equitable ownership means ?

There is a division in law between legal and equitable ownership. The distinction arose for historical reasons, but at the broadest possible level legal ownership refers to managerial rights over property, while equitable ownership refers to the right to use and enjoy the property.

Legal and equitable ownership over some property may reside in one person, such that he has the right to alter and dispose of the property as well as to use and enjoy the property. In other cases the legal ownership and equitable ownership may be split between two people or sets of people. In these cases, the legal owners are essentially considered to be managing the property on behalf of the equitable owners. The archetypal example of this is a trust, where one group (the trustees) hold legal title to some property and manage it on behalf of another group (the beneficiaries) who are the property's equitable owners.

This is a deep and complex topic to which I have done little justice, but that is the basic idea.

(edited 9 years ago)

Reply 11

nulli tertius

It isn't clear whether you are trying to distinguish title and ownership or legal and equitable.

All law degrees try to drum in the difference between ownership at law and ownership in equity (note the terminology). The first is also called legal ownership and the second is also called equitable or beneficial ownership. I am not going to go into that distinction. Turbocretin has summarised it and there will be a chapter in your textbook.

Ownership and title are two different ways of describing the same relationship between a person and a thing. Ownership is the label for the bundle of rights I have over a thing. Title is the process by which I have rights over the thing. If I have legal title to a thing, then I am its legal owner.