What does Equity mean?

In its literal sense the term equity denotes fairness, impartiality and
justice.
In its legal and technical sense the term has been defined as, A
system of law designed to furnish remedies for wrongs which were not
legally recognized under the Common Law of England or for which no
adequate remedy was provided by the Common Law.
It has also been defined as, A branch of English Common Law which
developed hundreds of years ago when litigants would go to the King
and complain of harsh or inflexible rules of Common Law.;

What is the Common Law System?

There are two major legal systems in the modern Western world i.e.
the Civil Law and the Common Law;
The Common law is a body of law based on custom and general
principles embodied in case law which serves as precedent and is
applied to situations not covered by statute.
The Common Law emerged in England during the Middle Ages and was
applied within British colonies across the continents. In its initial age,
the Common law was un-codified.
It is largely based on precedent, i.e. the judicial decisions that have
already been made in similar cases;

The Common Law Writs System

When the royal courts became more organized during the 13th
century, the royal judges and legal officers wrote down the common
law forms of action in standard form documents called writs.
Those writs set out the cause of action or complaint. It commanded the
defendant to appear in the Kings Court.
Each writ was based on some principle of law. The facts were stated in
the writ.
 The writs developed their special names. For instance a Writ of Right
used to be granted for a proprietary action, a Writ of Convenant for an
action for breach of contract.

What is the Civil Law System?

The Civil Law system developed in the Europe at the same time and
was applied in the colonies of European imperial powers such as Spain
and Portugal.
The Civil Law was codified;
The case law in civil law systems does not have binding force. In civil
law the courts have the task to interpret the law as contained in a
legislation, without being bound by the interpretation of the same
legislation given by higher courts.
In a Civil Law system, the judges role is to establish the facts of the
case and to apply the provisions of the applicable code.

Comparison between the Common Law and the Civil Law Systems

Sources of Law:

In the common law system, the law has been dominantly created by
judicial decisions. While in civil law, the main principles and rules are
contained in codes and statutes, which are applied by the courts
codes. The case law constitutes only a secondary source of law.

Binding Nature of Precedents:

A lawyer in the common law court starts with the actual case and
compares it with the same or similar legal issues that have been dealt
with by courts in previously decided cases. The civil law is based on
codes which contain logically connected concepts and rules, starting
with general principles and moving on to specific rules. A civil lawyer
 usually starts from a legal norm contained in a legislation, and by
means of deduction makes conclusions regarding the actual case.

Main Functions of Courts:

In the common law the courts are supposed not only to decide disputes
between particular parties but also to provide guidance as to how
similar disputes should be settled in the future. The courts in the civil
law system have as their main task deciding particular cases by
applying and interpreting legal norms.

Interpretation of Laws by Courts:

The interpretation of a legislation given by a court in specific case is

binding on lower courts, so that under the common law the court
decisions still make the basis for interpretation of legislation. On the
other hand, in contrast to common law, the case law in civil law
systems does not have binding force. In civil law the courts have the
task to interpret the law as contained in legislation, without being
bound by the interpretation of the same legislation given by higher
courts.

The emergence and Development of Equity

Under the Common Law system every legal action had to begin with
one of the writs.
An aggrieved person used to file his complaint with the king and the
judicial officer would find a suitable writ for every individual case;
If a relevant writ could not be found or a wrong writ would be chosen,
an aggrieved person could not file an action and, consequently, could
not get any relief from the court.
Consequently, people who could not find writ they started filing
complaints the King requesting him for justice.
 The King used to pass those complaints to the Lord Chancellor, the
highest judicial functionary in England.
His Court of Chancery developed, where judges tried to do justice or in
the cases of complaints sent to them by the Lord Chancellor.
This Court adopted principles of good conscience and reason used the
Canon Law.
The courts of equity by inventing new remedies filled the gaps and
removed the defects of the Common Law and softened its rigidity and
harshness.
In the Common Law courts the only remedy in civil suits was award of
a decree for damages. The Common Law had no other remedy.
The Court of Chancery brought new remedies that were not known to
the writs system of the Common Law courts such as injunctions,
specific performance of a contract etc.
Another and greatest innovation of the Court of Chancery was the
introduction of the concept of trusts.

The Nature and Role of the Maxims of Equity

The maxims of equity are principles developed by the Court of

Chancery;

The maxims were not written down in an organized code or enacted by

legislatures, but they have been evolved through generations of
judges;

The maxims of equity can be defined as rules of equity.

None of the maxims were in the nature of a binding rule;

These maxims were only guidelines for the courts of equity;

1-Equity will not suffer a Wrong to be without a Remedy

Meaning of the Maxim;

 Ubi Jus Ibi Remidium;

Illustrative Case: Ashby v. White;

Injuria Sine Damnum & Damnum Sine Injuria;

Application of the Maxim:

Infringement of a Legal Right where the Plaintiff Sustains no

Damage (Injuria Sine Damnum);

Where Defendant Holds Evidence;

Trust;

The Right of a Mortgagor - Equity of Redemption;

Right of Author of a Trust;

Specific Performance of Contracts.

2- Equity Follows the Law

Meaning of the Maxim;

Maitland said, Thus equity came not to destroy the law but to fulfill
it, to supplement it, to explain it;

Snell explained this maxim by saying, Equity follows the law, but not
slavishly, nor always;

In Leech v Schweder, Mellish LJ said that where a right existed at

law, and a person came only into equity because the Court of Equity
had a more convenient remedy than a Court of Law there equity
 followed the law, and the person entitled to the right had no greater
right in equity than at law. (Leech v Schweder (1873) 9 LR Ch App 463
at 475).

Application of the Maxim:

Optional Registration of Documents (Section-17 of the

Registration Act);

Promisory Estoppel;

3-He who Seeks Equity Must Do Equity

Meaning of the Maxim

The maxim means that to obtain an equitable relief the plaintiff

must himself be prepared to do equity, that is, a plaintiff must
recognize and submit to the right of his adversary.

Illustrative Case:

Lodge v. National Union Investment Co. Ltd. A borrower of money

under illegal contract can ask for the return of the securities,
however, he must be ready and willing to return the money that
he has borrowed

Application of the Maxim:

Illegal loans;

Benefit Taken under the Viodable Contracts;

Equitable Estoppel;

Set off.

4-He Who Comes to Equity mustCome with Clean Hands

 Meaning of the Maxim;

The one who comes to the court of equity to seek its help, his
own previous conduct must not be illegal otherwise he would be
denied any sort of relief by the court of equity.

Application of the Maxim:

Relief sought under illegal contracts;

Relief by a party involved in fraud;

The real owner under a benami transaction cannot recover;

Misrepresentation by a minor beneficiary of a trust.

5-Delay Defeats Equities

Meaning of the Maxim:

Equity Aids the Vigilant and not the Indolent. If one sleeps on
his rights for an unreasonable length of time, his rights will slip
away from him. If a person delays without seeking remedy, he
will be said to have slept upon his rights and therefore not worth
the favors of equity.

Application of the Maxim:

Limitation;

Adverse Possession;

Doctrine of Laches: Delay which is sufficient to prevent a party

from obtaining an equitable remedy is technically called laches

6-Equality is Equity

Meaning of the Maxim:

 Equity would put the litigating parties on an equal level regarding
their rights and liabilities. Those entitled to a right will be given
the benefits of such right either equally or proportionally. Those
under a liability will be compelled to share such liability either
equally or proportionally.

Application of the Maxim:

Equal or proportionate distribution of the profit of a partnership,

company or joint ownership etc;

Equal or proportionate contribution of loss or liability between co-

trustees, co-sureties, and co-partners.

7-Equity looks to the Intent rather than the form

Meaning of the Maxim:

The maxim means that equity concentrates on the substance of

a transaction, rather than its form. Thus, it may hold that a trust
has been created even though the word trust has not been
used.

Application of the Maxim:

Late performance of contract of sale of land:

In case of sale of land, if a party fails to complete it within the time fixed for
it, he is at Common Law, in breach of the contract, but equity allows a
reasonable time to the party to complete it.

Mortgagers Right of Redemption:

A mortgagor has a right to obtain his property back by payment of the debt
and that is his right of redemption.

Creation of Trust without express intention:

A trust is created even if the author uses phrases like, I hope, I request
or I recommend. In such cases the court of equity held that a trust was
created even if it lacked the express intention.

8-Equity Considers Done That Which Ought To Be Done

Meaning of the Maxim:

Where one party has incurred an obligation to do something for the other but
have not yet performed the obligation, the equity presumes and act as the
obligation has been performed by such person even if such person has not
performed the obligation.

Illustrative Cases:

Walsh v Lonsdale (1882) 21 Ch D 9, CA: An agreement to enter

into a lease has been treated as equivalent to a lease and the
parties rights and duties have been ascertained as if the lease
had been actually executed.

Industrial Properties (Barton Hill) Ltd v Associated Electrical

Industries Ltd [1977] QB 580; [1977] 2 All ER 293: In this case A
agreed to sell property to B, but a transfer was never
registered. B leased the property to C and a lease between
B and C was entered into. C defaulted under the lease, and
B sued C. Since C discovered that B was not the legal
owner, therefore, he denied his liability to C. The Court held
that even though the lease was defective at law it was
 nevertheless an agreement for a lease. Thus, C was found liable
to B.

Specific Performance of the Contract of Sale of Land: A seller, X

agreed to sell his land to Y on the condition that the land
thereafter would be transferred to Y and Y would pay the
price to X. If before the transfer of the land X wanted to
refuse he could be compelled to transfer the land to Y as
Equity considers done that ought to be done.

9-Equity Acts in Personum

Meaning of the Maxim:

At the Common Law a judgment of damages was enforced

against the property of the defendant. The assets of defendant
could be attached in order to execute the decree awarded to the
plaintiff.

As against this, in equity, the decree of a court could only be

executed by compelling the defendant to pay off the due of the
plaintiff. A defendant could be imprisoned if he would not pay off
the due of the plaintiff against him, however, the assets of
defendant could be attached in order to execute the decree.

One effect of this maxim, in many cases, is to render the location

of the property immaterial, where the court can acquire
jurisdiction over the person of the defendant. Equity has the
power to decree the conveyance of land outside of the territorial
jurisdiction of the court. Equity could grant its remedies provided
the defendant was within the jurisdiction of the court, even if the
property in question was outside the jurisdiction of the court.

Illustrative Cases:
 Richard West and Partners (Inverness) Ltd v Dick [1969] 2 Ch
424; [1969] 1 All ER 289: Specific performance of a contract for
the sale of land located in Scotland was ordered because the
parties were within the jurisdiction of the English court.

Chellaram v. Chellaram [1985] Ch 409; [1985] 1 All ER 1043: The

court held that London-based trustees of shares in a company,
with assets in Africa, were capable of removal by an English
court, notwithstanding the foreign location of the trust property.

10- Equity Imputes an Intention to fulfil an Obligation

Meaning of the Maxim:

Where a person has incurred, under a contract, an obligation to

do one thing, however, does another, equity will presume that he
has done such other act for the fulfilment of his obligation under
the contract.

In other words a person who has undertaken an obligation, will,

through his later conduct be interpreted as fulfilment of that
obligation.

Illustrative Case:

Sowden v Sowden [1785]: In a contract of marriage the husband

agreed to put certain property into trust for the benefit of
themselves and their children. Husband promised to pay 2000
to the trustees with which they would buy property to provide
income for his wife in the event of his death. The husband never
paid 2000 to the trustees, however, had bought a property after
the marriage for 2150. After the death of the husband the wife
was held to be entitled to her claim of the said property. It was
 presumed that the husband bought the property in the
performance of his obligation under their marriage settlement.

11- Equity will not Permit a Statute to be used as an

Instrument of Fraud

Meaning of the Maxim:

Equity will not ignore statutory requirements but will do so only

where it would be unjust to allow a party to rely on a statutory
requirement to the disadvantage of another person. A person is
prevented from relying on the absence of statutory requirements
if doing so would result in unfairness to another.

Illustrative Case:

Bannister v Bannister [1948] 2 All ER 133: A sold his house to

B. Under the contract B agreed orally to allow A to live in it
rent free for as long as she wished. The contract between them
was not in writing. Later B attempted to eject A, claiming that
A had not fulfilled the statutory requirements of furnishing a
tenancy agreement. It was held that the agreement was
enforceable notwithstanding the absence of statutory
requirement of writing.

12- Where there is Equal Equity, the Law shall Prevail

When two parties claim the same property and the court cannot decide
that one of them has a better right to the property, the court of Equity
will leave it to the court to decide.

This maxim operates where there are two or more competing interests,
one legal and the other equitable. Where the claims of both parties are
fair and meritorious, precedence will be given to the legal interest.
 Illustration:

A company that had been collecting sales tax on behalf of the government
found that it has overtaxed the customer and overpaid the government by
two percent. The company appealed for a refund, however, the court refused
the refund to the company on the ground that the money belonged to the
customers of the company and that the company had no better right to the
money than the state.

13-Where there are equal equities the first in time shall prevail

The maxim means that when two parties both have a right to possess
a same property, the one who acquired an interest first should prevail
in equity.

Illustration:

A man advertises a small boat for sale in the classified section of a

newspaper. A person came and offered him $20 less than the demanded
price upon which the seller agreed. It was agreed upon the parties that the
price would be paid after a week time and the buyer will take the boat.
Meanwhile another person came and agreed to buy the boat for the
demanded price. The seller agreed to sell the boat to him. Now question
arises who owns the boat. The laws of contract as well as the rules of Equity
agree that the first buyer is entitled to get the boat.