Page:The New International Encyclopædia 1st ed. v. 07.djvu/197

* EQUITABLE ESTATE. 169 EQUITABLE MORTGAGE. EQUITABLE ESTATE. An interest in prop- erty of such a nature that its enforcement and protection are within the jurisdiction of the courts of equity and not of common law: the right in the beneficial use and enjoyment of property without the legal estate. It is only by a considerable extension of the technical mean- ing of the term estate and l> analogy that it. ran be applied to a rijjclit of this character. In the primary classification of legal rights as rights in rem and rights in personam — that is, rights in a definite object {in rem lertam) avail- able against the whole world, and rights available against a particular individual only — property rights form by far the largest, if not the most important, body of rights of the former class. A freehold estate in lands, for example, is not, like a claim founded upon contract, a right against a certain, definite person, but involves the asser- tion of an exclusive title and right of possession against any and everybody who may choose to dispute it. Such rights as these are fully recog- nized and protected by the courts of common law, by putting the rightful claimant in posses- sion of the property and by defending such pos- session against all comers, and they are thus ap- propriately described as legal estates. The corresponding equitable right, on the other hand, is not, in our legal system, a right in rem, but only in personam. The beneficiary of the right cannot claim the possession of the property to which it relates, and a trespass upon it is not an injury to him, but to the trustee or other per- son in whom the right in rem, the legal title, is vested. The remedy of the beneficiary is confined to the latter, in personam, whose administration of such legal estate he is entitled to supervise and control. Clearly, such a right as this lacks the character of property, or of an estate, in the strict sense of those terms. But the expressions 'equitable estate' and 'equitable property' have been found too convenient to be dismissed on technical grounds, and must now be regarded as permanent additions to our legal nomencla- ture; in addition to which, the recent fusion of law and equity jurisdiction in England and many of the Ignited States has tended to make the distinction between legal and equitable in- terests less important. The origin of equitable estates is to be found in the ancient practice of conveying lands to the use of a person other than the grantee, which pre- vailed in England in the fifteenth and sixteenth centuries. By the Statute of Uses, enacted in the twenty-seventh year of Henry VIII. (1535), this practice, which had become so general as to involve most of the lands in the kingdom, was much curtailed, and the system of trusts, as we know them, established. These constitute at the present time by far the greater part of the class of interests known as equitable estates. Rights of an analogous character arise under a great variety of circumstances. Whenever one person has the legal title to property, real or personal, and another is entitled by the aid of equity to compel the conveyance of the property to him- self or its administration for his benefit, the lat- ter has an equitable estate therein. Such a right arises in every case where an unexecuted agreement exists for the conveyance or mortgaging of land, or where an attempt to make such a conveyance or mortgage fails through the defective execution of the instrument of as- signment. The right to the specific performance of the contract in the one case, and to compel the due execution of the instruments in the other, whereby the legal title to the property shall be transferred to the beneficiary, constitutes his equitable estate therein. Similar in character is the right known as the equity <>i redemption, whereby a mortgagor is enabled, after tin- tm feiture of his mortgage, to redeem the mortgaged land or goods from the mortgagee, The legal title having, by the forfeiture, become completely vested in the latter, the right of redemption pre- served by equity to the mortgagor may properly be regarded as a form of equitable estate. The large class of interests of this character known specifically as constructive trusts will be de- scribed under the title Trust. See also Equi- table Easement; Equity; Ises. EQUITABLE MORTGAGE. A lien created on property, either real or personal, without transferring the title thereto to the person in- tended to be secured. It is of the essence of the mortgage proper in the common-law system that the legal title to the property mortgaged shall pass to the creditor and remain in him until pay- ment or foreclosure. But the equity tribunals have given the effect of a mortgage to a variety of transactions in which no property is actually transferred, but where it is the intention of the parties that it shall be pledged or subjected to a lien in favor of the creditor, in order to secure the payment of his claim. The most striking example of the equitable mortgage is the lien upon land created by the deposit of title deeds to secupe a loan or other obligation. This is in common use in England, and occurs occasionally in a few of the United States. Everywhere, however, a mortgage deed which, through defective execution, fails to take effect in the manner intended, is treated as creat- ing an equitable mortgage, and the same effect is given to any written agreement for a mortgage intended to have a present effect. An oral agree- ment to subject land to a mortgage lien is only prevented from producing a similar result by the Statute of Frauds, which renders void all agree- ments concerning iands which are not committed to writing; but under some circumstances effect is given by courts of equity even to these. Similar to mortgages arising out of mere writ- ten agreements, as distinguished from convey- ances, is the familiar security known as the mort- gage on after-acquired property, as upon a fluc- tuating stock of goods in a store, upon machinery to be added to the equipment of a mill or factory, upon the future rolling stock of a railroad, etc. The familiar rule that no one can grant that which he does not have deprives such mortgages of any common-law validity beyond the property actually possessed at the time of the transaction. As to the property described in them which is afterwards acquired by the mortgagor, the de- scription operates only as an agreement to sub- ject it to the lien as and when it becomes the property of the mortgagor. There is considerable diversity of judicial opinion as to the effect of such a mortgage; but the prevailing view, which obtains in England and in most of the United States, is that it creates an equitable mortgage on the after-acquired property valid as against the mortgagor, his beirs and creditors, and against purchasers with notice or without con- sideration. In New York a curious intermediate