Difference Between Possession and Ownership
How are possession and ownership different?

Possession in law recognises a person’s right to possess an object even though he is not physically in possession of it. On the other hand, ownership is exclusively a legal concept. Apart from this, possession is a factual concept, whereas ownership is a strictly legal concept.

Individuals’ right to property is governed by both of these concepts together. But these two concepts are pretty interrelated, and hence it is essential to understand and evaluate the difference between both terms. So, to have a clear understanding of both the concepts, we will study possession and ownership in this law note.

Meaning of Ownership

The relationship between a person and property and the right that’s vested in him is referred to as ownership. The right to a property is the only thing that can be owned. To put it another way, a thing cannot be owned but can have a right over it. Ownership, according to Hebert, is a broad right in rem. It’s a collection of four rights:

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  1. The right to use something.
  2. The right to prevent others from utilising the item.
  3. Right to dispose of the item.
  4. The right to destroy the object.

Modes of Acquisition of Ownership

The ownership can be acquired in two ways:

Original Mode

The owner obtains ownership of something that does not have an owner. They’re known as res nullis. No one could claim ownership of such a thing. It can be obtained through admittance, occupation, or specification. For example: Mr A took the registry of the land that does not have an owner.

Derivative Mode

In this form, the owner purchases the property from the prior or original owner. It is only a transfer of existing ownership, not a relationship of ownership, in which the buyer obtains ownership from the seller. For example: A purchases a house owned by B after completing all the formalities.

Kinds of Ownership

Ownership can be classified into different ways given below:

Corporeal and Incorporeal Ownership

The ownership of a material object is corporeal, while the possession of a right is incorporeal ownership. Corporeal ownership is the possession of a house, a table, or a machine. Copyright, patent, and trademark ownership are all examples of incorporeal ownership.

Trust and Beneficial Ownership

Property that is owned by two people at the same time is known as trust property. And, if the relationship of two owners is such that one of them is obligated to use his ownership for the benefit of the other is known as beneficial ownership. For example: A and B jointly holds the shares of XYZ Ltd. Due to some urgency, A wanted to sell his stocks. Therefore, A and B both will jointly sell off their stocks.

Legal and Equitable Ownership

Legal ownership refers to ownership that is based on common law principles. In contrast, equitable ownership is where B was given debt by A. B becomes an equitable owner, and A becomes the legal owner.

Vested and Contingent Ownership

Vested ownership refers to ownership that takes effect right away. For example: A gives his possessions to B, an unmarried daughter, for the rest of her life, and C, an unborn child. Because C’s birth is unknown, his ownership is contingent. Here, giving possessions to B is a vested ownership as it took place right away without any delay, whereas giving possessions to C is a contingent ownership because C is an unborn child, and this event will take place in the future.

Sole and Co-Ownership

Sole ownership refers to an individual’s exclusive ownership of a piece of property as opposed to the entire globe. Co-ownership refers to the ownership of a property or thing by two or more people who have an interest in it.

Absolute and Restricted Ownership

Absolute ownership is where the owner enjoys all the ownership rights without any restrictions. In other words, absolute ownership refers to ownership that vests all rights in an item to the exclusion of all others. Limited ownership refers to ownership that places restrictions on the term of usage or the disposal of ownership rights.

Meaning of Possession

Custody or control is synonyms of possession. The concept of ownership evolved slowly as society progressed. Possession, according to Roman Law, is prima facie evidence of ownership. It backs up the ownership title. The owner of an item is assumed to be the person who has it. Long-term use of property results in ownership.

Kinds of Possession

Possession can be classified into two ways explained below:

Possession in Fact

It refers to a person’s actual or physical possession of an item. De facto possession is another term for it. It denotes a person’s physical control over something. There could be a physical connection between the thing and the individual. This physical relationship or control does not have to be ongoing. For example: X is carrying a mobile phone in his pocket. This denotes that the cellphone is in possession of X.

Possession in Law

It refers to property that has been recognised and protected by the law. It’s also known as de jure possession because it’s a legal possession. For example: Mr A has legally purchased a white Maruti Suzuki, which means that the car is in his legal possession.

Elements of Possession

Animus possidendi and corpus possidendi are the two elements of possession. Let’s discuss these below.

Animus Possidendi

This term refers to a person’s desire to own something. It is concerned with the subjective and mental desire to possess something. It is concerned with the subjective and mental aspects. It expresses a great desire to own something. The possessor must have a strong desire to possess something, and he must have an exclusive claim. Animus possidendi does not have to be a claim or right, and it does not have to be a personal claim. For example: A has a strong desire to possess the biggest house in his area.

Corpus Possessionis

It refers to the physical possession of an object and is concerned with the objective element. Corpus possessionis, according to Savigny, is genuine physical control over a thing. The presumption is that others will not interfere with physical control. The possessor must be present physically and personally. Accessories are included in possession of a thing. Protection and object secrecy are included in possession. For example: Mr X has possession of an iPhone 12.

Types of Possession

Now, we will study the types of possession one by one.

Representative Possession

Representative possession is when you have possession of something through an agency or a servant. In representative possession, the person is not the true owner of the property. For example: Master’s money in the servant’s pocket.

Concurrent Possession

A thing can be jointly owned by two or more people at the same time. Concurrent possession is the term for this situation. For example: A and B are brothers and jointly own a house.

Derivative Possession

Derivative possession refers to the possession of the holder of a thing. He gets his name from the person who entrusts the item to him. For example: A watchmaker. He is not required to return the watch until the repair costs have been paid.

Constructive Possession

Constructive possession is the legal term for possession. It isn’t something you own. It is legal possession, not physical possession. For example: The possession of a car’s keys suggests ownership of the vehicle.

Adverse Possession

Adverse possession is when you hold possession of property against everyone else who has or claims to have a claim to it. It is the taking of anything without the authorisation of the rightful owner. For example: After the lease period has expired, the lessee takes control.

Duplicate Possession

Duplicate possession refers to the possession of an item by two people. One person’s possession is compatible with another person’s possession. For example: Trust property that is owned by two people at the same time.

Possession Without Ownership

There may be rights that exist in reality but are not recognised by the law. As a result, while one may be in lawful possession of an object, he or she may not have any title to it, i.e., no ownership. For example: Intellectual property rights may exist even if they are not recognised as legal rights.

Ownership Without Possession

Some rights can lawfully be owned but not possessed. These are referred to as temporary rights. These rights can’t be owned because they can’t be exercised without destroying them. In the case of Rahimtoola vs Nizam of Hyderabad (1958), the creditor, the Government of Pakistan, was said to be in “possession and control” of the right to recover a bank loan.

Difference Between Possession and Ownership

Ownership: It is an absolute right.
Possession: It is evidence of ownership.

Ownership: It is de jure recognition of a claim. De jure means by right. Or, existing or holding a specified position by legal right.
Possession: It is a de facto exercise of fact. De facto means it exists, even though it may not be legally accepted as existing.

Ownership: It is the guarantee of the law.
Possession: It is the guarantee of the fact.

Ownership: It is related to a right.
Possession: It is related to a fact.

Ownership: It includes possession.
Possession: It does not include ownership.

Ownership: It excludes interference.
Possession: It excludes others except for the owner.

Ownership: It is developed on possession.
Possession: It is developed with civilisation.

Ownership: It provides proprietary remedies.
Possession: It provides possessory remedies.

Ownership: Its transfer is too technical.
Possession: Its transfer is less technical.

Conclusion

People often get confused with the terms “possession” and “ownership”. But these are very different concepts having different meanings. Property is a concept that has existed since the dawn of human society. It has undergone a significant transformation over the years, and ownership and possession combine to complete the definition of property. Therefore, understanding the meaning and difference between both the terms is very important in order to understand the term “property”.

I hope this law note was insightful.

Read Next:
1. Full Transfer of Property Act
2. 15 Types of Legal Deeds in India
3. What Is the Meaning of Ostensible Owner Under TPA
4. What Is Charge and Its Essentials Under the Transfer of Property Act?

ABOUT OUR AUTHOR
Author Anushka Saxena
Anushka Saxena is pursuing B.A.L.L.B (3rd year) from the Indore Institute of Law. She is hard-working, dedicated and committed to her work. She loves to explore new things and gain knowledge.
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