Written by attorneys · grounded in primary & secondary sources — see below
2 senses
1
An interest in property enforceable by a court of equity but not recognized at common law. Such rights arise when a deed absolute on its face is given as security for a debt, allowing the grantor to redeem the property upon repayment.
2
An interest in property enforceable by a court of equity but not recognized at common law. Such rights arise when legal titleholders declare that they hold property for the benefit of others, creating beneficial interests under a trust.
Sense 1
1
Sense 1
An interest in property enforceable by a court of equity but not recognized at common law. Such rights arise when a deed absolute on its face is given as security for a debt, allowing the grantor to redeem the property upon repayment.
Sources & Authorities· 1 primary source
Select any source to read its text and confirm it supports the definition.
Common Law
Examples
Sense 2
2
Sense 2
An interest in property enforceable by a court of equity but not recognized at common law. Such rights arise when legal titleholders declare that they hold property for the benefit of others, creating beneficial interests under a trust.
Sources & Authorities· 1 primary source
Select any source to read its text and confirm it supports the definition.
Each sense below has its own examples, sources, and questions.
5
Absolute Deed Redeemed After Loan Repayment
Eugene Ellsworth conveyed his warehouse to Empire Logistics by warranty deed to secure a bridge loan. The parties executed a side letter stating that the deed was security only and that Ellsworth could reclaim title upon repayment within two years. After Ellsworth tendered full payment, Empire Logistics refused to reconvey. A court treated the deed as a mortgage and ordered reconveyance because the side letter proved the transaction was intended solely as security.
Equitable Interest Asserted in Derivative Suit
Emma Erickson, a shareholder, sued corporate officers on behalf of Enigma Technologies alleging breach of fiduciary duty. The corporation had previously conveyed real property to a third party under circumstances creating an equitable claim. Erickson demanded a jury trial on the underlying legal issues because the corporation would have been entitled to one if it had sued in its own right.
Ross v. Bernhard396 U.S. at 538 n.10
Jury Trial Denied on Equitable Claim
Edward Everett, a bankruptcy trustee, sought to recover fraudulent conveyances from Elysium Media. The defendant demanded a jury trial, but the court denied the request because the action was analogous to an equitable proceeding to set aside transfers rather than a common-law claim for damages.
Granfinanciera, S.A. v. Nordberg492 U.S. 33, 42 (1989)
Equitable Title Subordinate to Legal Purchaser
Eva Espinosa obtained a specific-performance judgment against a developer but never recorded it. Echelon Security later purchased the same parcel for value without notice and leased it to a tenant. The tenant prevailed in an ejectment action because its lessor's prior legal title was paramount to Espinosa's unrecorded equitable interest.
City of Monterrey v. Del Monte Dunes at Monterrey, Ltd.526 U.S. 687, 734 (1999)
Publication Service Upheld for Equitable Lien
A creditor sought to enforce an equitable lien on property located in Florida belonging to a nonresident debtor. The court permitted service by publication because the proceeding concerned enforcement of a claim to an interest in real property within the state.
Hanson v. Denckla357 U.S. 235, 254 (1958)
Frequently Asked3
How does an absolute deed as security create an equitable right of redemption?+
When a deed absolute on its face is accompanied by a side letter or other evidence showing it was intended only as security for a debt, equity treats the instrument as a mortgage. The grantor retains the right to redeem by tendering repayment, and the grantee must reconvey title. Parol evidence is admissible to prove the security intent.
Supporting sources
When is an equitable interest subordinate to a later legal interest?+
An earlier equitable interest yields to a subsequent purchaser who acquires legal title for value without notice of the equity. The later legal title is paramount, and interests derived from it, such as leaseholds, are protected against the holder of the unrecorded equitable claim.
Supporting sources
Does the Seventh Amendment guarantee a jury trial on claims involving equitable rights?+
No. The Seventh Amendment preserves jury trial for suits at common law in which legal rights are determined. Claims seeking enforcement of equitable rights or equitable remedies fall outside that guarantee even when they arise under modern statutes.
Supporting sources
1
Trust Beneficiaries Enforce Occupancy Rights
Ella Emerson and Ewan Eckhart purchased a duplex and signed a notarized declaration stating they held title in trust for low-income graduate students. Students selected by a campus group occupied units at below-market rent for several years. After Emerson announced plans to sell, the students obtained an injunction preventing the sale because their beneficial interests under the trust were enforceable in equity.
Guaranty Trust Co. v. York[326 U.S.] at 110
Frequently Asked1
Can a signed side letter create enforceable equitable interests in land?+
Yes. A writing signed by legal titleholders that declares they hold specified property for the benefit of a defined class satisfies the requirements for creating a trust. Beneficiaries acquire equitable interests that equity will protect by injunction against inconsistent acts by the trustees.
Supporting sources
357 U.S. 235 (1958)Conflict of Laws
…of any will, deed, contract or other written instrument and for a judicial declaration or enforcement of any legal or equitable right, title, claim, lien or interest thereunder." § 48.02: "Where personal service of process cannot be had, service of process by publication may be had upon any party, natural or corporate,…