Report On Equity
Historical background of Equity
England was conquered by the Normans in the Year 1066. The period preceding this date is called that of Anglo-Saxon law of which little is known. There was no Common Law for the whole of England at any time before the Norman Conquest.
With the Norman Conquest, the period of tribal rule came to an end and feudalism was installed. It prepared and paved the way for the development of the Common Law.
The creation of Common Law was to be exclusive work of the Royal court of justice, usually called the courts of Westminster, after the name of the place where they sat from the thirteenth century. Common Law is that part of the law of England which before the Judicature Acts, 1873-1875 was adjudicated by the Common Law court^ (specially the former Courts of Queen’s Bench, Common Pleas and Exchequer at (Westminster), as opposed to equity, or that part of the law which was administrated by the Court of Chancery at Lincoln’s Inn.
Blackstone defines Common Law as the municipal law of England or the rule of civil conduct prescribed to the inhabitants of the Kingdom. It is “experience expressed in law”. It is composed of established customs, established rules and maxims such as “the king can do no wrong’.
In the times of Common Law courts provided no remedy in many cases where one was required. Hence the customs grew of applying for redress to the King in Parliament or to the King in Council, who referred the matter to the Chancellor. In later times petitions were presented to the Chancellor directly. The Chancellor being an ecclesiastic, and keeper of the King conscience, did not feel bound to follow the rules of Common Law, but gave such relief as the thought the petitioner or plaintiff entitled to ” in equity and goods conscience”. Equity thus represents the conscience of law and a moral correction of law in order to accord more with justice.
Definition of Equity
The term Equity has a broad popular sense and a narrow technical sense. In its popular sense equity is practically equivalent in natural justice or morality) However it is not extensive with the principle of natural justice in so far as many matters of natural justice are left to the dictates of public opinion or to the conscience of each individual instead of being subject to legal sanction.
In its technical narrow sense it may be said to be “a portion of natural justice which, through of such a nature as properly to admit of being judicially enforced, was ,for certain circumstances omitted to be enforced by the common law courts-an omission which was supplied by the court of Chancery
The broad and popular sense is thus very near to principles of natural justice or morality; the narrow and the technical sense is- concerned with only a part of the principles of natural justice which the common law courts failed to enforced.
Story defines equity as “that portion of remedial justice which was exclusively administrated bay a court of equity as contradistinguished from that portion of remedial justice which was exclusively administrated by a court of common law”.
According to Maitland- “we ought not to think of Common law and Equity as of two rival system” but “we ought to think of equity as supplementary law, a sort of appendix added to our code, or a sort of gloss written round our code, which used to be administered by the High Court of Justice as part of the code”.
According to Sneli -“Equity is a portion of natural justice which, although of a nature suitable for judicial enforcement, was for historical reason not enforced by the Common Law courts, an omission which was supplied by thejzourt of Chancery”.
Thus equity is an original attempt to solve the riddles of law, complex problems confront a legal system .The general nature that through all the above definition is that it is founded in natural justice, honesty and right. It is the true and sound interpretation of a rule. We may also say that it existed alongside the original civil law, not to supersede or destroy the law but to assist it. It is the inherent capacity of law to adjust itself and override its hardship and formalities which it acquires in course of time.
Jurisdiction of Equity court
The jurisdiction of an Equity court has been classified the story as exclusive, concurrent and auxiliary. Prior to judicature Acts the main work of equity could be classified as follows:
1. Exclusive Jurisdiction:
Ceases where in according to conscience there should be a right, but the Common law courts failed to recognize one or grant relief, were fitting subjects for exclusive equity jurisdiction. Right of person is claiming under uses and trusts, right of redemption of a mortgage, penalties and forfeitures and administration of assets of a testator and intestate were the subjects wherein Equity Courts recognized the equitable rights or interest and granted relief. Over these matters equity had an exclusive jurisdiction. These were the matters which the Common Law Courts could have dealt with, but did not.
2. Concurrent jurisdiction:
Cases where in the plaintiff as his option could proceed either at the Common Law courts or at the Chancery courts and wherein the relief granted to the plaintiff was almost the same but the method and manner in which it was granted by the Common Law Courts was not so effective and sweeping as that of the Chancery Courts, where equity developed a wide range of remedies for enforcement of Common Law rights which were available in addition to the remedies provided by it. l These remedies were not wholly unknown to the Common Law., but it failed to develop them. In cases of actual or expressed fraud, accident, mistake, partnership, specific performance of contract, set-off, partition and dower it was the novelty and effectiveness of the procedure employed by the chancery court that attracted the petitioners. The remedies successfully tried and effectively employed may be stated as delivery of specific performance of contract for sale and purchase of land, injunction and rectification of instruments. We may thus say that equity jurisdiction in such cases was based on inadequacy of legal remedies employed by the Common Law. In other words an equitable remedy was available only when a legal one could lie.
3. Auxiliary Jurisdiction:
Cases where in the plaintiff sought the help of equity to render a relief granted by the Common Law Courts more effective became the subject of its auxiliary jurisdiction. Such relief from the Equity Courts could be obtained as Ashburner points out, either before adjudication in the Common Law Courts or even after the decision in the suit was reached. Its main purpose was to prevent transgression of rights of the parties to a suit. The remedied granted under this kind of jurisdiction rested mainly on legal principles, equity intervening merely to supply the defects of the legal process.
Thus where a contract was broken and the person guilty of its breach held the document production of which was necessary to asses the damage, discovery of the same was ordered by the Chancery courts. In case of apprehension of danger of losing testimony before it could be produced at the proper time, the court ordered its preservation and perpetuation and in case of old and infirm witness and incase of single valuable witness, equity courts took proper stapes to ensure their examination in time . Since the Chancery courts aided the Common Law courts its jurisdiction has been named as the auxiliary jurisdiction.
This shows that the procedure in the Common Law courts was defective in so far as it could not compel or even allow a defendant to give evidence and in limiting the enquiry to the parties to the action, however great an interest other persons might have in the result of the action.
This threefold division of the subject was rendered obsolete by the Judicature Acts which removed the necessity for one court to supplement the jurisdiction of another.
Maxims of Equity
Equity has a hapazard origin and not a complete system, its working principles are embodied in the so-called 12 maxims of equity. These principles do not cover the whole of the ground of equity and tend to overlap. There can be no logical division of these maxims Therefore these maxims are short or concise technical sentences used as memorial rules. They represent the nectar of the experience of judicial administration of five centuries by equity courts. They did not come into existence all of a sudden and at the very outset. They are the outcome of the zeal and sincerity of the Chancellors’ conscience stariving to do justice. As pointed out by Salmond; “Maxims are the proverbs of the law. They have the same merits and defects as other proverbs, being brief and pithy statements of partial truths. They expenses general principles without the necessary qualifications and exceptions, and they are therefore much to absolute to be taken as trustworthy guides to the law.
There are 12 Maxims in which have been individually discussed hereunder.
1. Equity will not suffer a wrong to be without a remedy.
a) Meaning where there is a right, there is a remedy. This idea is expressed in the Latin Maxim ubi jus ibi remedium. It means that no wrong should go unredressed if it is capable of being remedied by courts. This maxim indicates the width of scope and the basis on which the structure of equity rests. Thus it is responsible for the entire equitable jurisdiction of the court of Chancery to prevent failure of justice. But the meaning of the maxim should and not be understood to embrace every moral wrong. The maxim imports that where the. Common law confers a right, it gives also a remedy or right of action for interference with or infringement of that right The maxim therefore must be taken as referring to rights which are suitable for judicial enforcement but which were not enforced at common law owing to some technical defect. The following cases can best illustrate the maxim.
b) Application and cases:- In Ashby-V- White, wherein a qualified voter was not allowed to vote and who therefore sued the returning officer, it was held that if the law gives a man a right, he must have “a means as vindicate and maintain it, and a remedy, if he is injured in the exercise of and enjoy of it. It is. needed, a vain thing to imagine a right without a remedy, for want of right and want of remedy are reciprocal” It was argued hat the candidate for whom the plaintiff wanted to vote was elected and that there was no precedent for such an action; and if it was allowed, that would lead to multiplicity of proceedings but the same were rejected and Lond Hott observed that ” if man will multiply injuries, actions must be multiplied too, for ever)’ man that is injured ought to have his recompense”
Example;
As noted by shell, it was on this maxim that the court of chancery based its interference to enforce uses and trusts. Where a conveyed land to 13 for the use of and in trust for C and B claimed to keep the benefit of the land to himself. C had no remedy al law. Rut this was an abuse of confidence, which was wrong capable of redress in a chancery court.
Recognition in Bangladesh
(i) The Trust Act 1882.
(ii) Code of Civil Procedure 1908. Section – 9
(iii) The Specific Relief Ac; 1877. Specific performance of contract. Rectification of Instrument
(iv) The Transfer of Property Act 1882. Injunction. Declaratory suits.
2. Equity Follows the Law
a) Meaning- The maxim indicates the discipline which the Chancery courts observed while administering justice according to conscience. As has been observed by Jekyll, M.R. The discretion of the court is governed by the rules of law and equity, which are not to oppose. But each in turn, to be subservient to the other; this discretion in some cases follows the law implicitly, in others assists it and advances the remedy; in others again it relieves against the abuse allays the rigour of it; but in no case does it contradict or overturn the grounds or principles there. Thus equity came not to destroy the law but to fulfil it, to supplement it, to explain it. Every jot and every title of the law was to be obeyed, but when all these had been done, something might yet be needful, something that equity would require” and that \vas added by equity. There goad was the same but by their nature and due to historical accident they chose different paths. Equity respected every word of law and every right at law but where the law was defective. In those instance these common law rights were controlled by recognition of equitable rights and in other cases they were rendered more effective ( than they were at common law) by throwing open equitable remedies to their holders. In the words of story “Where a rule either of the common or statute law is direct and governs the case with all its circumstances, or the particular point a court of equity is a£ much bound by it as a court of law and can as little justify a departure from it”. It is only, as Snell puts it, when there is some important circumstances disregarded by the Common Law rules that equity interferes. Thus “equity follows the law, but not slavishly, nor always”.
b) Application and cases
A case on the point is Strickland V, Aldridge as regards legal estates, rights and interests, equity was and is strictly bound by the rules of law and it has no discretion to deviate thereform. At common law where a person died interstate who owned an estate in sec-simple, leaving sons and daughters, the eldest son (according to the rules of primogeniture) was entitled to ,the whole of the land exclusion of his younger brothers and sisters. This was unfair, yet no Relief was granted by Equity courts. But in this case it was held that if the son had induced his father not to make a will by agreeing to divide the estate with his brothers and sisters, equity would have interfered and compelled him to carry out his promise, because it would have been against conscience to allow the son to keep the benefit of a legal estate which he obtained by reason of his promise, Equity recognised and respected legal rules but the circumstances of giving a promise by me son to the father had added an element of conscience to the rule which equity must consider, because it acts on the conscience of a person. It was held therefore that the son must take it as a trustee for himself and his brothers and sisters. Thus where a court of law missed an important point, equity corrected the law and followed it on the simple principle of conscience. Provisions of law cannot be allowed to be misused or abused or made an instrument of fraud or to perpetuate injustice by creating a breach of trust and a breach of contract.
Where the law was based on feudal tenure, equity refused to follow it. Equity has rejected the technical doctrines of seisin and escheat and recognised a wide range of future interest in land. Such exceptions are not many and therefore the rule that equity follows the law. As regards equitable estates and interests, equity though not strictly bound the rules of law, has acted and still acts in analogy to those rules/ where analogy exists.
Example
Where R gives his property in trust to M, H being the beneficiary; H’s interest though equitable will be governed by a legal rule in/the following situation and not by any equitable rule. If the trustee M by a mistake of fact pays some body a particular amount from trust property, M can file an action and this he will have to do within a period of six years, H’s interest being equitable, equity cannot help him in this respect, because, provisions of law in this regard are very definite and specific. There being analogy here rules of law will apply. Thus when deciding tittles lo equitable estates, regarding construing of covenants and construing words of limitation equity follows the rues of law. All these go to lead to one explanation on the maxim that equity though going far ahead of law, never goes in opposition to established principles, and in that sense it is controlled by law.
Position in Bangladesh
Bangladesh has not recognised the well known distinction between legal and equitable interest, Equity rules in Bangladesh, therefore, cannot override the specific provision of law. As for example, every suit in has to be brought within the limitation period and no judge can create an exception to this or can prolong the time limit or stop the rule from taking effect on principles of equity, similarly no court can confer rights which can be acquired only be registration of a document, on a party without getting the document registered.
3. He who seeks equity must do equity.
a) Meaning-The maxim means that to obtain 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, because you must do unto your neighbour what you wish him to do unto you.
If you want to exact the full measure, you must also be prepared to reciprocate. As said by AshhursL J., in Deekds V. Strutt, a court of law cannot impose terms on the party suing. If he is entitled to a decision, the law must lake its own course, but the practice of the chancery court was different in that while giving equitable relief it imposed such terms on the applicant which are agreeable to the conscience, because equity acts on the conscience of the party. In /act, the maxim lays down a bare abstract principle. What that term could be was left to the discretion of the court. Snell therefore points out that: This is a rule of unquestionable justice’, which, however, decides nothing in itself, for you must first inquire what are the equities which the defendant must do, and what the plaintiff ought to have”.
b) Applications and cases-This rule has many applications,
i) Illegal loans
ii) Doctoring of Election
iii) Consolidation of Mortgages.
iv) Notice to redeem mortgage,
v) Wife’s equity to settlement,
vi) Equitable estoppel.
vii) Restitution of benefits on cancellation of transaction.
viii) Set off (Con dieting claims in one proceeding).
Example
Illegal Loans-In Lodge-V-National Union Investment Co Ltd. the facts were as follows, one B borrowed money from M by mortgaging certain securities to him, M was an unregistered money lender. Under the money lenders Act 1900, the contract was illegal and therefore void, B sued M for return of the securities. The court refused to make an order except upon the terms that B should repay the money which had been advanced to him. This decision was based on the principle of the maxim.
Recognition in Bangladesh
1) Section 19 A, 64 and 65 of The Contract Act 1 872.
2) Section 35 and 50 of The Transfer of Property Act 1 882.
3) Section 30, 33, 38 and 41 of The Specific Relief Act 1 877.
4) Section 62 and 86 of The Trust Act 1 882.
5) Order 8 Rule 6 of Civil Procedure Code 1 908X
4. He who comes into equity must come with clean hands.
a) Meaning-Equity as it was based on good faith and conscience, demanded fairness, uprightness and good faith not only from the defendant but also from the plaintiff. It is therefore aptly said that “he that hath committed an inequity ‘ this very idea is expressed in this maxim but in a different terminology. It is well known that ex turpi causa non oritur-actio, no cause of action arises from a base cause. As said in the previous maxim, he who seeks equity must do equity, that is one must be prepared and willing to behave and to do what according to the principles of morality, justice and reason, is fair and just. While applying this maxim the court believed that the behavior of the plaintiff was not against conscience before he came to the court for its assistance. The previous maxim related to the plaintiffs conduct inside the court and thereafter. But his maxim goes a step ahead and expects the plaintiffs conduct above reproach, just and fair before he comes to the court. The conduct complained of must have an immediate and necessary connection to the equity sued for.
b) It must he depravity in the legal as well as the moral sense and not a general depravity. Thai is to say, he must be clear of any participation in fraud or similar inequitable conduct. To impose injustice upon another and then to seek the court’s assistance smacks like satan preaching the Bible to his adversaries. It is therefore that one who has not acted equitable is not entitled to it and the doors of the equity courts will be shut against him in the sense that the court will refuse to interfere on his behalf to acknowledge his right or to grant him any relief.
b) Application and cases- The maxim is very clear when it talks about equitable misconduct, for those who acts within the limits of their legal rights are free from any blemish and this has been shown very strikingly by the cases of Chasemore-V-Richards and the Gluccster-V-Grammar School case. Which go to explain that a legal act docs not become illegal merely because of the improper motives of its doer. The misconduct under this maxim is not necessarily that one which constitutes a basis of legal action or punishable as crime. The maxim as has been pronounced in Mason- V-Clarke is so good and active as it might have been in its inception, that even a reprehensible conduct in a suit matter is enough to invoke the assistance of the court in applying this maxim. This explains that to bar one’s claim, the depravity must have an immediate and necessary- relation to the equity sued for.
Example- An early illustration in this regard is the Highway men cases. Two robbers were partners in their own way. Due to disagreement in shares one of them filed a bill against another for accounts of the profits robbery. Courts of equity do grant such a relief in case of partnership but there was a case where the cause of action arose from an illegal engagement or occupation. The maxim is extrupi cause non oritur actio, and according to that the equity court refused to help them. Not only this; but their solicitors also were taken into custody, find £50 and imprisonment till payment and the counsel who signed the bill was made to pay this costs.
Recognition in Bangladesh
1) The Trust Act 1882.
2) The Specific Relief Act 1877:’
3) The Contract Act 1872.
5. Delay defeats equity.
a) Meaning- It is an undisputed axiom that eternal vigilance is the price of liberty. If one sleeps upon his rights, his rights will slip away from him and therefore this maxim has been expressed in a rather different from, shouting to the passive, otiose and the slothful that “Equity aids the vigilant and not the indolent” where an injured partly has been slow to demand a remedy for a wrong which he has for a long time regarded with apparent difference the court will decline to give him that remedy on grounds of public policy. In the famous words of lord camden, L.C.” a court of equity has always refused it aid to/state demands, where a party has slept upon his right acquiesced for a great length of time. Nothing can call forth this court into activity, but conscience, good faith and reasonable diligence; where these are wanting, the court is passive and docs nothing”. Delay which is sufficient to prevent a party from obtaining an equitable remedy is technically called “laches”, Thus legal claims are barred by statutes of limitation and equitable claims may be barred not only by limitation law but also by unreasonable delay, called laches.
Therefore there should be some time-limit for prosecution of a claim in a court of justice because it is dangerous and impracticable to leave it to the sweet will of a person entitled to it. This idea has been accepted by every legal system and this maxim is an indicator for the time limit though in a crude form.
This maxim applies only when a claim is made to equitable relief.
Application
To cases which are governed by statutes of limitation (in England) either expressly or by analogy the maxim will not apply. Such cases fall into three categories as noted by snell.
i) Firstly those equitable claims to which the statute applies expressly, and
ii) Secondly to which the statute applies by analogy.
iii) In the third instance there are equitable claims to which the statute does not apply and hence they are covered by ordinary rules of laches, Dr. Hanbury Puts the idea in this way. In cases of purely equitable claims, equity courts have a discretion either to grant or to refuse the equitable reliefs, unless the equitable claim is expressly covered by a statute. In case of legal claims or equitable claim closely analogous to legal claims to limitation period prescribed by the statute will be followed. But in case of fraud of the defendant, where it could not be discovered by the plaintiff even up to and after the limitation period was over, equity resolved that time against the plaintiff will begin to run only on and from the date when the fraud was first discovered.
Example
In a Bombay case, the plaintiff allowed his land to be occupied by the defendant and this was acquiesced by him even beyond the period of limitation. On a suit by the plaintiff for possession of land it was decided as the period of limitation to~ recover possession had expired, no relief could be granted.
In the same way where seeks to set aside a contract of purchase he must apply for relief within the limitation period. But where he makes unreasonable delay and during that time other parties have acquired rights or where the property in question has deteriorated in value or where conditions are changed, the court will refuse rescission.
Recognition in Bangladesh
1) In case of laches.
2) In case of acquiescence.
6. Equalitv is equity,
a) Meaning- Plato defines equality as “a sort of justice” and furtherpoints out that ” If you cannot find any other equality is the proper basis”. The maxim is explained also as “equity delighteth in equity”, which means that as for as possible equity would put the litigating parties on an equal level so far as their rights and responsibilities are concerned. The maxim expresses the object of both law and equity in order to effectuate a distribution of property and losses, proportionate to several claims and liabilities of the parties concerned. Equality therefore means proportionate equality. In interpreting the words and enforcing the rules of law, equity so acts that no party gets an undue advantage over the other or is put to unjustified loss. By its very nature common law courts zealously preferred and protected individual interest of common interests. But equity regarded and maintained the rights of all those who were connected by any common bond of interest and obligation. Benefits and burdens of common interest and obligations cannot be imposed upon and pressed against any one individual but should be spread equally over all, following the principle of equality contained in this maxim. In steel V. Dixon Justice Fry said “When I say equality, I do not mean necessarily equality in its simplest form, but which has been sometimes called proportionate equity”.
Where, therefore, interpretation of words caused inequality and hardship or unequal treatment, it was relieved by equity be constructing the words equitably. As shell puts it succinctly, “In absence of any sufficient reasons for any other basis of division, those who arc entitled to property should have the certaintv and fairness of equal decision, for equity did delight in equality.”
b) Application and cases-Application of this maxim can be discerned from the following.
i) Equity’s dislike for joint tenancy and presumption of tenancy-in common.
ii) Equal distribution of joint fund and joint purchases,
iii) Contribution between co-trustees, co-sureties and co-contractors.
iv) Rate able distribution of legacies,
v) Power to appoint,
vi) Marshalling of assets.
Example- When property is given to two or-more persons without words of severance, i.e to A and B, or to A and B jointly, it is held concurrently with the other. Against strangers all such holders are regarded as one individual.
Common law favoured this type of tenancy because of certain peculiar incidents, that were attached to this system. As the title was vested ultimately in a single individual. It facilitated investigation and conveyance of title, it rendered easy the performance of feudal services like paying of rents, services at war times and working in lord’s fields etc. and it prevented the burden on the land which would have increased otherwise.
The main incidents of joint tenancy can be laid down as (1) unity of possession (2) unity of interest (3) unity of time, and (4) unity of title. Every joint tenant is possessed of the joint property by every part and by the whole, they have a single title and their possession is not adverse inter se. The interest each joint tenant originals from the same act, the estate of each begins at the same time and the extent and nature of interest of each joint tenant is the same as that of the other.
Recognition in Bangladesh
(1) Section 43, 69, 70, 146 and 147 of The Contract Act 1872.
(2) Section 45, 56 of The Transfer of Property act 1882.
(3) Section 330 of The Succession Act 1882.
(4) Section 27 of The Trust Act.
(5) Section 73 of Code of Civil Procedure 1908.
7. Equity looks to the intent rather to the form
a) Meaning -As is seem before, common law was very rigid and inflexible. It could not respond favourably to the demands of time. In respect of acquisition and transfer of property. It regarded the form of a transaction to the more important than, its substance. Moreover it expected the contracting parties to rigidly observe their agreements and to perform their stipulations Jo the very letter of every promise of agreement. Common law/thus was fond of mere technicalities. But, as expressed by Romily, M.R in Parkin case “Courts of equity make a distinction in all cases between that which is matter of substance and that which is mailer of form; if they fond that by insisting on the form, the substance will be defeated, they hold it to be inequitable to allow a person to insist on such form, and thereby defeat the substance” Equity thus looks to the sprit and not to the letter, it looks to the intention of parties and not to the works, and its looks to the realities rather than to mere appearances. Instead of swimming on the surface of mere form, it penetrates through the external from a transaction to discern and decide the real intention of the parties, because the external form of a transaction cannot be allowed to conceal or throw a cloak on the real object, purpose and consequences of a transaction.
Example, Application and cases
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 did not take this rigid attitude. It allowed a reasonable time to the party concerned to complete it. Moreover, in case of construction and enforcement or an agreement equity did not give undue importance to its negative side but looked through the document to find out its real substance and intent.
Unlike common law, equity was not impressed by mere from and technicalities and avoided circuitry of action. Thus a transaction which could lawful have been effected by two or more separate transactions was held by equity to be valid, though it was unauthorized. The maxim therefore contains in it self the equitable rule of construction documents.
The application and working of this maxim can well be examined from the following instances:
i) Relief against penalties and forfeitures.
ii) Relief in regard of precatory trusts.
iii) Relief in regard of mortgages, the doctorine of equity of
iv) redemption and the doctorine of clogs on redemptions.
v) Attitude in regard of statute of frauds.
Recognition in Bangladesh
1) The Transfer of property Act 1882.
2) The Contract Act 1872.
3) The Evidence Act 1872.
8. Equity looks on that as done which ought to be done.
a) Meaning-As between two parsons, where one of them has incurred an obligation and undertaken upon himself to do something for the other, the equity courts look on it as done and as producing the same results as the obligation or undertaking had been actually performed. Equity treats a contract to do a thing as if the thing were already done, though only in favour of persons entitled to enforce the contract specially and not in favour of volunteers. In other words, as to the consequences and incidents of the subject mailer of contract, it will be treated as if the final acts anticipated and contemplated by the parties have been carried out in the same manner as they ought to have been not as they might have been carried out. Equity acts on the conscience of a person. What one has undertaken to do, binding his conscience, ought to be done and equity courts therefore look to the acts of the person bound by his conscience and interpret and construe them in such a way that they amount to what ought to be done.
b) Application arid cases: (As Example)-A person who enters into possession of the land under a specially enforceable agreement of a lease, is regarded in any court having jurisdiction to enforce it as being in the same position as between himself and the other party to the agreement as if the lease had actually been granted to him. In the same way, A by his will leaves Rs 50,0007-, to T upon trust to purchase land for the use of P.T docs not purchase land and P by the time dies, leaving all immovable to X and the rest of his property to Y, Who should get the amount of Rs. 50,0007- X or Y? Y says he is entitled to the money as it has remained so X says he is entitled to the amount because it was earmarked for the purchase of land. Had T not omitted his duty of purchasing the land, the money would have been in the form of land. Equity is such cases would definitely regard the purchase of land which ought to have been made as made, and earmark and impress upon the fund the character and all the incidents of land. The money would thus go to the X and not to Y, as they would thus go to X and not to Y, as they would be treated as land.
Recognition in Bangladesh
(1) Section 40 and 53 A of The Transfer of Property Act 1882.
(2) Section 12 of The Specific Relief Act 1877.
(3) Section 91 of The Trust Act 1882.
9. Equity imputes an intention to fulfil an obligation.
a) Meaning- Equity courts came into existence to do justice. They firmly believed that a person must be prepared to do what is right and fair. As the old saying goes, one must be just before the professors to be generous. It is one this accepted ditum that equity considered, estimated and construed acts of parties thus where a person is under an obligation to do certain act, and he does some other act which is capable of being regarded as an act in fulfilment of his obligation, the latter will primafacie be so regarded for “it is right to put the most favourable construction on a man’s acts, and to presume that he intends to be just before the affects to be generous” Equity is such cases presumes and imputes an intention that the latter act was intended to be in performance of the former. In other words a person presumed to do what he is bound to do.
Application and cases
The following doctrines and concepts rest on the application of this maxim.
i) Doctrines of performance and satisfaction,
ii) Doctrine of presumption of Advancement,
iii) Ademption.
iv) Relief against defective execution of power of appointment.
Example
Where a donor who is already in obligation to the donee, effects a donation under circumstances which indicate an intention that this shall be taken in satisfaction of a prior obligation, equity in such cases applies the principles by construing his word in such a way as to extinguish the prior claim of the donee. Thus the doctrine satisfaction is pressed into service in construing instruments In George will Trusts cases, G, a farmer, in his will left two-thirds of his residue to his son E and one third of his son R.
The will furthers provided that if E within one month of the testator’s death notified the trustees of his wish to carry on the farm, the residue was to be valued and that one-third should constitute the share of R and two-thirds of the share of E, and that R should allow his share to remain invested in the farm of three years. G later made a gill to E of the live and dead stock which was valued at £2060. After G’s death a summon was taken out to determine whether (under the rule against doubt portions) the gist to E was in satisfaction of the legacy. Held the gift to Ewhich put him in immediate possession of his intended inheritance, was deemed to be in satisfaction of the legacy. In any case, the same was sufficienlly ejusidem generous with the option conferred on H to carry on the farm to satisfy this requirement.
Recognition in Bangladesh
(i) Section 177, I 78 and ! 79 of The Succession Act 1925.
(ii) Section 92 of The Trust Act 1882.
(iii) Section 53A of The Transfer of property Act 1882.
10. Where there is equal equity, the law shall prevail.
11. Where the equities are etiual, The first in time shall prevail.
These two maxims relates to the question of priority.
Priorities
Maxims number 10 and I 1 are now discussed here. This two maxims, taken together, express the principle regarding priority.
Question of priority or precedence may arise where there are rival conveyances of land or assignments of beneficial interest in trust funds usually such questions arise in connection with mortgages.
Priority: Definition and Meaning
By priority we mean precedence, that which pre-exists, foregoes or is first in rank. As expressed in Rice V-Rice, priority is the right of a party to satisfy its own claim of interest first in comparison to others.
The first maxim lays down that “as between persons having only equitable interest, if their equities are in all other respects equal, priority of time gives the better equity; or gui prior est tempare potior est jure”. When all other tests give way and are not able to decide whose equitable interest came into being first, the test of time is the deciding factor.
Example, case study
A mortgages his property to B. Me again mortgages it to C. The market price of the property is Rs 20,000. A has obtained Rs 15,000 from B and Rs 10,000 from C. If B and C both desire to satisfy their claims from the property, at the same time, which is insufficient to satisfy both, the question arises as to whose claim should be satisfied first, or who should be paid first. This question is then the question of priority. The answer to simple question like this would also be simple if we press into service the first maxims which explains that it the interests of the contestants are in all respects equal the first in time shall prevail.
It may be that both the mortgages are legal or both equitable, or the one legal and the other equitable, or vice Versa. If may also be that the estate mortgaged is legal but the mortgages made are merely equitable, or that there one successive mortgages of an equitable interest. In such cases the rules regarding presence or priority are to be applied to the facts of the case.
Conditions for getting priority
The first condition is (i) that prior existence in point of time is not the sole criterion to decide priority between two competing equities. Other factors which are no less important that prc-existence, are also be taken into account. Moreover (ii) This rule applies only to those cases where the equities are equal; where they are unequal the rule cannot be enforced. In cases of unequal equities it is a foregone conclusion that one is stranger than the other.
The principles that follows from the above has no doubt, certain exception which would be considered when both the maxims are taken up together. But one thing is obvious and certain, that a plaintiff claiming priority according to this principle will lose it on account of his misdemeanors or where he is grossly negligent or commits a fraud. Rice-V-Rice is an apt example of this situation.
Recognition in Bangladesh in Maxim No.10.
i) Doctrine of Election, The Doctrine of Marshalling, The Doctrine of Priority and Set off.
ii) Code of Civil Procedure 1908.
iii) The Transfer of Property Act 1882.
Recognition in Bangladesh Maxim No.11.
Section 48, 78 and 79 of The Transfer of Property Act 1882.
Equity Acts in Pcrsonam
a) Meaning-Courts of equity, described as court of conscience operate primarily in personam binding to conscience of a person and thus binging an individual’s conscience under its sway. Its decrees regarded not merely as decisions concerning the rights and properties in disputes but as decrees decisions and directions positive or negative addressed to the individual party or parties. Thus on one side an individual’s conscience was sought to be bound, and on the other Chancellor exercised his jurisdiction guided according to his own conscience. The maxim being descriptive of the equity courts procedure covers a large portion of its procedural and remedial of the equity” The extent of its application initiated Mukherjea, J. to remark that” the rule of acting in personam was really the weapon with which the early Chancellors sought to establish their jurisdiction in opposition to that of the common Law Courts”. But this very extent and exercise of jurisdiction impelled L,ord Esher to remand in the last quarter of the nineteenth century in Mocambic case that such an exercise of jurisdiction amounted to doing indirectly what the court dared not to have done directly. As this amounted to overriding the jurisdiction of foreign courts, the significance of the maxim is now decreasing. It can be explained better with regard to methods of enforcing judgments, and jurisdiction over property abroad.
Example Application and case.
A judgment of the Common Law Courts was enforced by one of the writs of execution as a result of which forcible possession of the goods of property of the defendant was obtained and given to the plaintiff. But equity did not follow this method. H issued orders against the defendant personally made him act accordingly, failing which he was punished for disobedience by attachment of his property or committal for contempt, the decrees of equity courts thus addressed the defendant in terms of personal command and he either obeyed it willingly or was/made to obey inspite of his dissent, either through requestration of his property or imprisonment.
The execution in personam was peculiar to equity courts. When imprisonment became in effective to compel obedience equity courts invented and applied a writ of sequestration where under property in dispute was taken possession of by sequestrations appointed for the purpose and that was retained until the defendant acted as ordered. This also did not prove to be as effective as was intended.
These powers were supplemented by statute by making vesting orders and appointing a person to execute transfer, where this was ignored by the defendant equity nominated a person to do the act for him. Equity thus purged the corrupt conscience of the defendant to bring him round and to compel him to carry out its order. Since the judicature Acts the orders of the/ Chancery Division could be enforced by case of legal writs of execution.
Thus conveyances, contracts and documents were executed, or negotiable instruments were indorsed and trust funds were administered by equity. But as observed by Lord Campbell, no jurisdiction was conferred on equity courts by the there fact that an equitable remedy was claimed. Moreover equity courts in suitable cases restrained unconscientiously proceedings initiated in the Common Law Courts issued injunctions against execution of a foreign judgment and stayed proceedings in a foreign court it the same matter was pending in England.
Recognition in Bangladesh
i) Code of Civil Procedure 1908.
ii) The Specific Relief Act 1877.
iii) The Trust Act 1882.
iv) The Contract Act 1872.
Conclusion- The aim and object of equity is to promote honesty and not to frustrate the legitimate rights.
Book Reference
(1) B. M. Gandhi : Equity, Trust and Specific Relief.
(2) Shell : Principles of Equity.
(3) Durga Das Basu : Equity, Trusts and Specific Relief.
(4) Internet : 12 Maxims of Equity.