Nature of Equitable rights and interests. 

Equitable interests are rights over property which (though invalid at common law) were recoginised and
enforced by the courts of chancery.

At common law , certain formalities had to be observed to create or transfer a legal interest in property .
section 1 and 4 of the statute of frauds 1677 requires that evry lease or land transaction mustbe in
writing . section 2and 3 of the real eastates property acts requires a deed to be executed for every lease.
Non -compliance with these formalities may (instead of invalidating the contract /agreement) give rise
to an equitable interest . in Ogunbambi v Abowaba, the courts held that a purchase receipt coupled with
possession can give riseto equitable interest.

Equitable rights are an off spring of equitable jurisdiction. Ware v Egmont; Lord Cransworth - doctrine
of notice is one of those circumstances in which equity lays emphasis on substance in the face of form
and technicalities regarding legal ownership except where statutory guidance is evident.

They are rights which were enforced and recognized by the courts of chancery. 

Equitable interests can be classified in to two;

 Those modelled on common law rights

 Those invented by equity independently

1)      Rights or interest based on common law.

This can be seen as where equity builds upon common law rights . e g beneficial interest in trust .At
common law the trustee was the legal owner and the beneficiary had no right over the trust property.

In a trust, the beneficiary` s rights are based on common law because equity follows the law. Equity
considers equitable owners as real owners . Equity now makes the trustee a mere custodian while the
beneficiary is seen as the true owner (cesti que trust).  
2)      Equitable interests exclusively created  by equity. 
These are interests that were inexistence at common law for example; Mortgagors equity of redemption
, Estate contracts, equitable mortgage, restrictive covenants and the vendor` equitable lien or invalid for
non- compliance with formalities. 
3)      The distinction between equitable and legal interests.
A legal interest in enforceable against the whole world unlike an equitable interest. but (1). A bona fide
purchaser for value without notice . Notice thus determines the extent of an equitable intererest 
ii) Equitable interest. 
Enforceable against everyone except a bona fied purchaser for value without notice . Lwanga v
Registrar of Titles- Odoki- a person who registers land by fraud can pass good title to a bona fied
purchaser for value who is not party to the fraud.
4)      Types of Equitable interests. 
a)      Estate contracts. 
-An estate contract is an agreement for the sale of land. 
-Common law used to reward damages for failure to transfer land 
-Basing on Walsh v Longsdale, an agreement for sale of land is as good as the sale thus a decree of
specific performance would be given. 
-A purchaser acquires an equitable interest which is enforceable against every one but a bona fied
purchaser. 
Specific performance converts an equitable interest into a legal interest. Ogubambi v Abowa- receipt +
possession = an equitable interest. Thus Q had constructive notice. Orasanmi v Idowa- the appellant did
not remain in possession.
b )     Restrictive covenants. 
It is a clause in a lease agreement which restricts the use of land to certain purposes. In equity such a
term runs with the land but cannot be enforced against a bona fied purchaser for value without notice.
c)      Mortgagor` s equity of redemption. 
Equity allows a mortgagor to redeem his land even after a specific period had passed. 
d)     Equitable Mortgage. 
i)                    Mortgage of an Equitable interest. 
An owner of an equitable interest can create an equitable mortgage. A beneficiary of a trust can create
an equitable mortgage. A person who creates a legal mortgage retains an equitable interest
ii) An agreement to create a mortgage.  
A court decree of specific performance converts an equitable mortgage created under agreement into a
legal mortgage.
iii) Deposit of title deeds.
Deposit of title deeds with the intention to create a mortgage leads to its creation.  
iv) Equitable charge. 
Where land is treated as security without deposit of title nor agreement. 
v) Equitable Lien. 
Where a person transfers land before payment of the purchase price. It can be enforced by selling the
property under a court order. 

 The Doctrine of Notice. 

1)      Rationale. 
Equity looks at substance rather than form. A person with superior title cannot enforce it against a
person with inferior title which was created prior to his- Lord Westbury; Backland v Gibbins.  Effect:
superior title is made subject to the inferior title. 
2)      Concept of Notice. 
Knowledge of an existing fact. 
a)      actual notice. 
The purchaser has express notice of the prior title at the time of purchase or anytime before the notice
is completed. The purchaser is not bound by notice whose source is not reliable e.g. rumor. 
b)      Constructive notice. 
Where the purchaser has sufficient knowledge to put him in position to carry out an inquiry into the
existence of a prior interest or right: Salden j in William v Brown.The above presumption is rebutable by
proof of exercise of due diligence e.g inquiries made to the proper authorities.
ii) Nature of the inquiry.
The purchaser should investigate the legal title of the seller.Labinjoh v Olufunmise- the purchaser
admitted not having carried out inquiries. S.64 RTA- registering all dealings with the land. Where the
land is occupied by another person other than the seller.Canyem v Consolidated African Selection Trust
ltd- an option to renew was regarded as an equitable interest which the purchasers where subject to.
c) Imputed notice.
Notice which is actual or constructive may be imputed on the purchaser through his agent. A vendor is
not an agent of the buyer thus notice of the vendor cannot be imputed on the buyer .Notice of
information by a solicitor in a transaction would bind principle in a later transaction. Mountfield v Scott,
the rule was modified to the effect that it would not bind him. Where a solicitor acts for both parties,
any notice that he acquires is imputed on both. If there is conspiracy, the aggrieved party is protected by
the doctrine of a bona fide purchaser. 
3)      The impact of registration legislation on the doctrine of notice. 
Sect. 51 requires registration of instrument affecting land. Registration enables the tracing of title both
upwards and downwards. Priority is in the order of registration. - Amakara v Zankley.  A bona fide
purchaser is only affected by notice of a registered estate of a previous owner; Balogun v Salamt.