This page is continued from Property >>>> Ownership:

***************************

interest:
n. (15c)

l. The object of an human desire; especially advantage or profit of a financial nature <conflict of interest>.

2. A legal share in something; all or part of a legal or equitable claim to or right in property <right, title, and interest>.  *  Collectively, the word includes any aggregation of rights, privileges, powers, and immunities; distributively, it refers to any one right, privilege, power, or immunity. [1]

1. A right in, or share of, something. Concern. The compensation allowed by law, or fixed by the parties, for the use, detention, or forbearance of money or its equivalent. 30 Am J Rev ed Int §2.

Compensation payable on a contractual basis or allowed by way of damages. 22 Am 12d Damg § 179.

A means of compensation, as distinguished from a penalty which is a means of punishment. United States v Childs, 266 US 304, 69 L Ed 299, 45 S Ct 110.

As taxable income: — the compensation paid for the use of money. Sayles v Commissioner of Corp. & Taxation, 286 Mass 102, 189 NE 579, 91 ALR 1267.

Types of Controlling Interest:

controlling interest – sufficient ownership of stock in a company to control policy and management; especially, a greater-than-50% ownership interest in an enterprise. 

absolute interest – not subject to any condition.

entire interest – a whole interest or right, without diminution.

Shared (Qualified) Ownership (Interest):

qualified ownership (interest) – shared, restricted to a particular use, or limited in the extent of its enjoyment; less than absolute ownership.

Other Forms of Interest:

beneficial interest – a right or expectancy of value, worth, or use in property one does not own.(i.e a trust or estate) as opposed to legal title; a beneficiary’s interest.

carried interest – the share of any profits produced by a partnership’s investment, paid to the general partner as compensation for managing the investment.

concurrent interest – See concurrent estate under ESTATE (1).

contingent interest – an interest that the holder may enjoy only upon the occurrence of a condition precedent.

defeasible interest – an interest that the holder may enjoy until the occurrence of a condition.

direct interest – a certain, absolute interest.

entailed interest – an interest that devolves through lineal descendants only as a result of a fee tail.

equitable interest – held by virtue of an equitable title or claimed on equitable grounds, such as the interest held by a trust beneficiary.

executory interest – See EXECUTORY INTEREST.

encumbrance – an interest attached to real property, or the title or record thereof, that may lessen its value, such as a lien, mortgage, or easement; any property right that is not an ownership interest.

expectation interest – (1836) The interest of 3 mm breaching party in being put in the position that would have resulted if the contract had been performed.  See expectation damages under DAMAGES; BENEFIT-OF-THE-BARGAIN RULE.

financial interest – (1846) An interest involving money or its equivalent; especially, an interest in the nature of an investment. — aka pecuniary interest.

future interest – (17c) A property interest in which the privilege of possession or other enjoyment is future and not present.  *  A future interest can exist in either the grantor (as with a reversion) or the grantee (as with a remainder or executory interest). Today, most future interests are equitable interests in stocks and debt securities, with power of sale in a trustee. — aka future estate; expectant estate; expectant interest; estate in expectancy.  Cf. present interest.

     Excerpt from Lewis M. Simes & Allan F. Smith, The Law of Future Interests 51, at 2-3 (2d ed. 1956):

     “[T]he interest is an existing interest from the time of its creation, and is looked upon as a part of the total ownership of the land or other thing [that] is its subject matter. In that sense, future interest is somewhat misleading, and it is applied only to indicate that the possession or enjoyment of the subject matteris to take place in the future.” 

     Excerpt from Thomas F. Bergin & Paul G. Haskell, Preface to Estates in Land and Future Interests 56 (2d ed. 1984):

     “To own a future interest now means not only to be entitled now to judicial protection of one’s possible future possession, but also (in most cases) to be able to make transfers now of that right of possible future possession…..

     When 0 transfers today ‘to A for five years,’ we can say either that O has a future interest or that he has a ‘present’ estate subject to a term for years in A. Similarly, when 0 transfers today his entire estate in fee simple absolute by a conveyance ‘to A for five years, then to B and his heirs,’ we can say either that B has a future interest or that he has a ‘present’ estate subject to a term for years in A. Unhappily, the fact that we have two locutions available to us can be a source of confusion . . . .” Id. at 42.

inalienable interest – (1848) An interest that cannot be sold or traded.

inchoate interest – (1800) A property interest that has not yet vested.

insurable interest – (18c) A legal interest in another person’s life or health or in the protection of property from injury, loss, destruction, or pecuniary damage.  *  To take out an insurance policy, the purchaser or the potential insured’s beneficiary must have an insurable interest. If a policy does not have an insurable interest as its basis, it will usu. be considered a form of wagering and thus be held unenforceable.  See wager insurance under INSURANCE.

interest in the use and enjoyment of land: (1834) The pleasure, comfort, and advantage that a person may derive from the occupancy of land.  *  The term includes not only the interests that a person may have for residential, agricultural, commercial, industrial, and other purposes, but also interests in having the present-use value of the land unimpaired by changes in its physical condition.

joint interest: (16c) An interest that is acquired at the same time and by the same title as another person’s.  See joint tenancy under TENANCY.

junior interest: (1906) An interest that is subordinate to a senior interest.

legal interest: (17C) 1. An interest that has its origin in the principles, standards, and rules developed by courts of law as opposed to courts of Chancery. 2. An interest recognized by law, such as legal title.

legally protected interest: (1925) A property interest that the law will protect against impairment or destruction, whether in law or in equity.

liberty interest: (1960) An interest protected by the due process clauses of state and federal constitutions.  See FUNDAMENTAL RIGHT (2).

multiple interest: A property interest that is good against an indefinitely large number of people.

possessory interest:  See POSSESSORY INTEREST.

present interest: (17c) 1. A property interest in which the privilege of possession or enjoyment is present and not merely future; an interest entitling the holder to immediate possession. — aka present estate.  Cf. FUTURE INTEREST. 2. A trust interest in which the beneficiary has the immediate beneficial enjoyment of the trust’s proceeds. 3. A trust interest in which the trustee has the immediate right to control and manage the property in trust.

property interest: 1 . Property law. An interest, perhaps including rights of possession and control, held by an owner, beneficiary, or remainderman in land, real estate, business, or other tangible items. 2. Constitutional law. A legitimate claim of entitlement to some legal or contractual beneiit that cannot be taken away without due process. Also termed proprietary interest; ownership interest; interest in property.

proprietary interest: (17c) A property right; specifically, the interest held by a property owner together with all appurtenant rights, such as a stockholder’s right to vote the shares.  *  Contingent fees and attorney’s liens are exceptions to the rule that a lawyer may not have a proprietary interest in a client’s claim or the subject matter of the litigation.  See property interest.

reliance interest: (1936) The interest of a nonbreaching party in being put in the position that would have resulted if the contract had not been made, including out-of-pocket costs.

restitution interest: (1936) A nonbreaching party’s interest in preventing the breaching party from retaining a benefit received under the contract and thus being unjustly enriched.  *  The benefit may have been received from the nonbreaching party or from a third party.

reversionary interest: (18c) A future interest left in the transferor or successor in interest.  See REVERSION.

security interest – an interest in personal property or fixtures which secures payment or performance of an obligation, or, with respect to real property, a mortgage or other lien.

senior interest: (1937) An interest that takes precedence over others; especially, a debt security or preferred share that has a higher claim on a corporation’s assets and earnings than that of a junior obligation or common share.

terminable interest: (1883) An interest that may be terminated upon the lapse of time or upon the occurrence of some condition.

undivided interest: (18c) An interest held under the same title by two or more persons, whether their rights are equal or unequal in value or quantity. — aka undivided right; undivided title; fractional interest.  See joint tenancy and tenancy in common under TENANCY.

vested interest: (18c) An interest for which the right to its enjoyment, either present or future, is not subject to the happening of a condition precedent.  Cf. contingent interest.

working interest: See WORKING INTEREST.

3. The compensation fixed by agreement or allowed by law for the use or detention of money, or for the loss of money by one who is entitled to its use; esp., the amount owed to a lender in return for the use of borrowed money. — aka finance charge.  See USURY.

accrued interest – (18c) Interest that is earned but not yet paid, such as interest that accrues on real estate and that will be paid when the property is sold if, in the meantime, the rental income does not cover the mortgage payments.

add-on interest – (1952) Interest that is computed on the original face amount of a loan and that remains the same even as the principal declines.  *  A $10,000 loan with add-on interest at 8% payable over three years would require equal annual interest payments of $800 for three years, regardless of the unpaid principal amount. With add-on interest, the effective rate of interest is typically about twice the stated add-on interest rate. In the example just cited, then, the effective rate of interest would be about 16%. — aka block interest.  See add-on loan under LOAN.

Boston interest – (1985) Interest computed by using a 30-day month rather than the exact number of days in the month. — aka New York interest.

capped interest – (1979) Interest that is calculated according to a variable interest rate, as with an adjustable-rate mortgage, but that cannot exceed an upper limit either for a specified period of time or for the entire duration of the period when the interest applies.

compound interest – (17c) Interest paid on both the principal and the previously accumulated interest. Cf. simple interest.

conventional interest – (1878) Interest at a rate agreed to by the parties themselves, as distinguished from that prescribed by law.  Cf. interest as damages.

discount interest – The interest that accrues on a discounted investment instrument (such as a government bond) as it matures.  *  The investor receives the interest when the instrument is redeemed.

v gross interest. (1884) A borrower’s interest payment that includes administrative, service, and insurance charges.

> illegal interest. See USURY’»

> imputed interest. (1968) Interest income that the IRS attributes to a lender regardless of whether the lender actually receives interest from the borrower. 0 This is common esp. in loans between family members.

interest as damages. (1841) Interest allowed by law in the absence of a promise to pay it, as compensation for a delay in paying a fixed sum or a delay in assessing and paying damages. Cf. conventional interest.

> lawful interest. (16c) l. A rate of interest that is less than or equal to the statutory maximum. 2. See legal interest.

> legal interest. (17c) 1. Interest at a rate usu. rescribed by statute. 0 Courts often order monetary ju gments to