Equitable interest are interest not recognized by common law but by the courts of equity. When an interest exist at common law we say that it is a legal interest.
Under common law the position of the creation of interest in land was by deed. The statutes of laws. It was important that interests in land was created by writing. What happened was that oral interest were created with a purchase being made but the vendor refusing to transfer the deed. When it went to the court it was asked whether there was a writing and if not the vendee did not get the interest in the land. With time as people fell unhappy the court of chancery came up with equity. Also, there were inadequate remedies.
The only remedy under common law was for damages and this was inadequate. Equity said that if the common law refused to admit the interest made orally then equity would create an equitable interest. This equitable interest was enforceable against the original parties and everybody. Another reason was that the common law insisted on technicality. In cases where an interest was conveyed to a person to the benefit of other and the trustee was not doing such, it was held for the trustee as the court saw that the land was legally and technically transferred to the trustee and not the beneficiary. Equity came in to say that when the common refused to hold for the beneficiary then their courts would hold that the beneficiary had an equitable interest.
Creation and transfer of legal interest in land
Section 1 of the conveyancing decree
At common law the transfer of land should be in writing sighting by the offeror or his agent. This means that if the transaction is not in writing a legal interest would not have been created.
Creation of an equitable interest in land in contract
Express trust-where the trust is created, the beneficiary of the trust has an equitable interest while the legal interest vets in the trustee
Contract to convey or create a legal estate or interest- s2 of the conveyancing decree states that a contract to transfer land must be evidenced in writing signed by the person against whom the contract is to be proved or by a person who was authorised to sign on behalf of such person. Where this fails to happen but there is an oral contract which is backed by part performance, an equitable interest is created- walsh v Lonsdale.
This is supported by s3 of the conveyancing decree. Kolete v kolete. It says that it must be evidenced in writing. It can be a receipt, letter and this must contain the essential parts-amount paid, duration, the property, the date… the courts of equity say that this contract which is specifically enforceable as no two pieces of land is the same . It is an estate contract as it creates an interest in land. It creates an equitable interest. This is enforceable against everybody except the bona fide purchaser. An oral contract supported by part performance creates an equitable interest.
Estates or interest void at common law for want of correct formalities
Grant of an interest by a person who has an equitable interest
By constructive trust or proprietary estoppel
Difference in validity between legal and equitable interest
A legal interest is a right in rem exercisable against the world and an equitable interest is a right in personam enforced against a limited number of persons. if one is entitled to a legal interest then apart from any voluntary act on his own he cannot be devolved of his rights by the fraud of a third person. Any restrictions or easements attached to the land are binding on him and is enforced against all persons whether they know it or not.
In equitable interest they are enforceable against persons who owing to the circumstances in which they acquired the land ought in conscience to be held responsible. Equity follows the law and will not interfere with common law if there is no strong equitable ground to do so
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Co-0wnership
This arises when two or more people become owners of the same land, when co-owners jointly contribute to acquire land on the understanding that it shall be for their simultaneous enjoyment, when a grant is made inter vivos or by will to two or more person or by operation of law. There are two main types-tenancy in common and joint tenancy. In Ghana when parties are silent on how they should hold property the law will imply that they hold the property as tenants in common-conveyancing act s14(3).
Joint tenancy
It arises whenever land is conveyed to two or more people without words to show that they are to take distinct and separate shares. Two characteristics are the right to survivorship and the four unities.
The right to survivorship-if one joint tenant dies his interest in the land passes to the surviving joint tenants. A corporation which never dies cannot be a joint tenancy. This right takes precedence over any disposition made by a joint tenant in a will.
The four unities:
Unity of possession-this is the unity shared by both joint tenancy and tenancy in common. Each owner is as much entitled to possession of every part of land as the others. No one can appropriate any part exclusively to himself. One owner cannot maintain an action of trespass against the other unless the action amounts to waste. One co-owner cannot be allowed to pay rent to another co-owner. Rent received from a stranger-lesse is shared amongst the co-owners.
Unity of interest-the interest of each joint owner is the same to its extent, nature and duration. Each tenant owns the whole property but when the land yields rents and profits they are divided equally between the tenants. They must have the same interest. When any legal acts are to be done, all joint owners must take part for it to be effective. However a notice to quit given by one of the joint owners is effective to terminate a periodic tenancy. A license granted by the joint owners can be lawfully terminated by one of them without the concurrence of the others.
Agyentoa v owusu
A part of a house built by the deceased was sold to another. The deceased willed the unsold part to her son and daughter. The son died and was succeeded by the sister. The son’s children was occupying the room’s their father had. The sister perfected her title and sold it to the plf who sought to eject them from the rooms. S4 of PNDCL111 stipulated that on the death of any person his wife and children should inherit his property. The children where therefore entitled to their father’s share and not the sister. The interest created by the will was tenancy in common and therefore the brother
Owusu asiedu v adomako and adomako
The plfs bought a commercial property because they were non-resident in Ghana. They made the def’s husband the caretaker. After his death the plf asked the def to leave. The def claimed the plf had given his share to her husband as a gift. Alienation by a joint tenant of his interest without the knowledge and consent of the other joint tenant converts the tenancy into a tenancy in common. However the interest was not given to the def because the purported deed did not satisfy the criteria of a valid deed. –date bah
Dacosta v ofori transport
The deceased’s property (2/3) was distributed by the court to his widow and children. The widow and her children leased the property to someone for 50yrs. The lease finally was assigned to the def. the plf the surviving members of the widow’s family assert that the assignment of the lease breached the covenants, condition and agreement and therefore sought recovery of possession The conveyance by the widow and her children of their interest would convert it to a tenancy in common-date bah
Fenuku v john teye
MR. and Mrs. Fenuku jointly purchased the disputed land in 1954 evidence by exhibit B the deed of purchase. Mrs. Fenuku died and Mr.
fenuku married Mrs. Vt. He then sold the land in question to jt mrs. Vf brother in 1969. Upon the death of both Mr. f and Mr JT the children of Mr. f sues the widow and son of mr jt claiming that by virtue of nrcd 175 the conveyancing act, section 14(3) the properties acquired by their parents the original mr and mrs f were property held in tenancy in common as suc h upon the death of their mother the her share of the property fell into intestacy and thus, their father could not have unilateral sold the whole land to mr. jt. Held: the S.C. court in dismissing the appeal of the plaintiff and upholding the judgment in the favor of the defendant held: the section 14(3) was to have a retrospective effect however there was a limit to its retrospective effect. Since, mrs f had passed away sixteen years before the enactment of the decree it follows then the held the property as joint tenants in the absence of words of severence and as such Mr f.upon the principle of survivorship jus asccresendi has total control and ownership of the land and can therefore gift or sell it as he wills. However, the court seems to suggest that had Mrs. F passed away after the act came to force, then the court would apply the act retrospectively to avoid what they describe as the undesired consequences of joint tenancy and to ensure that the true intention of the parties prevail hence would hold that they held the land in tenancy in common.
Unity of title– must acquire title through the same act/document or grant under a conveyance
Unity of time-every tenant must vest at the same time
A joint tenancy comes to an end by severance
⦁ Alienation– when a joint tenant alienates his potential share intervivos the joint tenancy is severed and the person taking from him becomes a tenant in common with the other co-tenants who continue to hold their potential share as joint tenants. Owusu v asiedu, dacosta v ofori transport
⦁ Partition-can be done voluntarily or compulsorily by an order of court. A co-owner has a statutory right to compel partition even without agreement of the other parties. It is seen that the physical and actual partition is expensive and would produce absurd results the court would made an order for sale and share the proceeds. Family property can only be partitioned between branches and not between individual members-adabla v kisseh.
⦁ Acquisition-acquisition by one tenant of a greater share-example if one joint tenant purchases the reversion. They now have unequal interest.
⦁ Sale-if all the joint tenants agree to sell the land that joint title is transferred
⦁ Homicide-where one joint tenant kills the other tenant. This prevents the killer from taking beneficial interest by survivorship-re K
⦁ Course of conduct or dealing-any conduct which indicates an intention to terminate and which is made to the other tenants-notice to terminate and admits strangers onto the land without prior notice
Tenancy in common
Tenants hold the property in divided shares and may have separate interests. No tenant can claim sole ownership of any part of the property. There is no right of survivorship. The size of each tenant’s share is fixed once and for all in proportion to his contribution to the acquisition of the property or the share granted/gifted tot him. It can be passed on in a will/intestacy. Agyentoa v owusu. He may dispose of his share intervivos. The new tenant becomes a tenancy in common with the others.