Nature of Equitable Rights/Interests

Equitable rights are in two categories. They include those rights created by Equity and those recognized under Equity which were hitherto unrecognized under Common law.

The recognition and protection of certain rights by Equity were as a result of the defects in Common law.

These defects included the position that a person who agreed on a lease without completing all the formalities took no interest in the property as well as the non-recognition of the rights of a beneficiary to a Trust.

Equity stepped in here to recognize and protect “imperfect” interests other than those which strictly comply with the law. The extent of its protection of these rights will become apparent under the discussion on priority of interests.

It created other interests hitherto nonexistent at Common law such as the Mortgagor’s (borrower) equity of redemption and his equitable right to redeem. These rights created here have no Common law equivalents.

In fact, the rule at Common law in respect of the mortgagor was that his interest lapsed if he doesn’t make payment on the date agreed. Equity stepped in and gave the mortgagor a much stronger right to redeem and also allows him transfer his interest in the property, called the equity of redemption.

One important feature of equitable rights/interests is that they are generally below the strict legal standards set at Common law. They may not necessarily stand up to legal formalities but in some cases, may be stronger than the legal interest.

Although, equitable interests are generally viewed as minor compared to legal interests such that legal interests would usually take priority. As stated earlier, this would not always be the case.

For instance, it was held in Amodu Tijani vs Secretary Of Southern Nigeria that writing is unknown to customary law. As such, the process of acquiring land under customary law is far different from the position at law, especially without all its formalities.

Thus, a person can validly purchase land under customary law by making some sort of consideration, in the presence of witnesses and being given possession. If some other person, trying to rely on non-compliance with legal formality, asserts that his interest in land supercedes the earlier, his assertion would fail even if he had complied with all the legal formalities.

See also Etajata vs Ologbo where the court held that whenever an equitable interest is coupled with possession, such equitable interest cannot be defeated by a subsequent legal interest.

Rights In Personam or In Rem?

Equitable rights are considered as being rights in personam (enforceable against the conscience of an individual) while legal rights are considered as being rights in rem (enforceable against the whole world).

This perception leads to the conclusion that legal rights are much stronger than equitable rights since they bind the res of the dispute while equitable rights, being in personam, can only bind the conscience of the party.

Thus, in an action for delivery up of goods, a court of common law can simply order that the goods be delivered up and enforce this order by forcibly taking it and delivering it up. Whereas, a court of Equity can only order that the party in default deliver up the goods.

If he doesn’t, the court can only imprison him until he is ready to comply. Hence the maxim “Equity acts in personam”. Also, equitable interests are not deemed to be as impregnable as legal interests because they devolve from the legal estate and as such are only binding on the owner of the legal estate.

However, it can be questioned whether Equity actually acts in personam only and not in rem. If one steps back from the logical substance of the equitable rights and focuses on its procedures for enforcement and consequences, it becomes apparent that the rights eventually act on the res itself rather than on just the conscience of the party.

Equitable instruments like the writs of Assistance and Sequestration which enabled the court to order that the injured party be put in possession or that the property be sequestered until compliance by the defaulting party evidently act on the res.

A foreclosure order is also an instance of Equity acting against the res.

The rights of a beneficiary to a Trust also take on the toga of a right in rem as it is enforceable against the whole world especially when it comes to tracing trust property.

It would only fail against a bonafide purchaser for value without notice. Courts of Equity can also make orders in respect of land in a foreign jurisdiction, as long as the party can be properly served within the court’s jurisdiction.

Author: Opeoluwa Sanni

Ope likes simple things and loves making things simple. He’s passionate about his business (whatever that is) and always looks to stand out.

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