MAXIMS OF EQUITY

WHERE EQUITIES ARE EQUAL FIRST IN TIME SHALL PREVAIL

THE PRIOR IN TIME THE PRIOR IN RIGHT
(Qui prior est tempore, potior est jure)

1- INTRODUCTION
 Time is important to equity, reflecting, perhaps, its commercial
element. Where two claimants have equally strong cases, equity will
favour the person who acquired his rights first. Thus, if two equitable
mortgagees and each of them seek to enforce his security rights under
the mortgage ahead of the other mortgagee, the court will give priority
to the person who had created his mortgage first.

 This maxim as well as the maxim, “where equities are equal, law shall
prevail,” is applied in England with reference to legal estates and
equitable estates. Both maxims govern questions of the priority of rival
claimants to the same property in equity.

2- DEFINITIONS OF MAXIMS

According to Walker D.M

“Maxims are short, pithy formulations of broad and general principles of
common sense and justice”.

According to SNELL
“These are not to be taken as positive laws of equity which will be applied
literally and relentlessly in their full width, but rather as trends or principles
which can be discerned in many of the detailed rules which equity has
established.”

3- EVOLUTION OF MAXIMS

Generally, the maxims of equity evolved from time to time and especially
began to formulate during the time of Lord Nottingham (1673-82). Lord
Nottingham is also known as father of modern English equity.

4- MEANING AND EXPLANATION OF THIS MAXIM

 The maxim is only applied where priority cannot be decided on any

other principle.

 In the absence of a legal estate in the matter and the contest is among
the equitable estate only, the rule is that the person whose equity
attached to the property first will be entitled to priority over the other or

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 others e.g., if A enters into a contract, for the sale of his house, with B
and then with C, the interest of B and C both being equitable, B will
have priority over C because his equity attached to the property first.

 This rule ‘where equities are equal, the first in time shall prevail’ is
applicable in cases only when equities are equal. Therefore, if equities
are unequal in the sense that equity on the side of the person
otherwise entitled to priority is worse, that is, he is guilty of anything
unconscionable or unfair, he would lose his priority.

 The true meaning and effect of the maxim have often been
misunderstood. But the Court of Equity will not prefer the one to the
other on the mere ground of priority of time, unless and until it finds
upon an examination of their relative merits, that there is no other
sufficient ground of preference between them or in other words that
these equities are in all respects equal and that if the one has on other
grounds a better Equity than the other.

5- CASE LAW ILLUSTRATION

Rice Vs. Rice (1853) 2 Drew. 73

Vice-Chancellor Kinerdesly says, “As between persons having only

equitable interests, if these interests are in all other respects equal,
priority in time gives the better equity. In a contest between persons
having only equitable interests, priority of time is the ground of
preference last resorted to i.e., a Court of Equity will not prefer the one
to the other on the mere ground of priority of time until it finds that
there is no sufficient ground of preference between them”.

6- INSTANCES OF APPLICATION OF THIS MAXIM

In applying the maxim, the courts must consider the nature and condition
of their respective equitable claims, circumstances and manner of their
acquisition and the whole conduct of each party with respect thereto. In
examining these points the Court may apply the test not of any technical
rule but same broad principles of right and justice which the Court of
Equity applies universally in deciding upon contested rights.

a. Purchases in good faith and for valuable consideration

An equitable interest will be enforceable against the holder of a

legal title only if the circumstances are such that the suitable claim
affects the conscience of the legal owner. Hence, inequitable
interest will not be enforceable against a purchaser of the legal

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 estate, for value and without notice of the equitable interest. The
requisites of a bona fide purchase for value without notice are
three:
1. The defendant must have the legal estate vested in himself,
or in some person on his behalf.
2. He must have given value.
3. He must have had no notice of the equitable interest at the
time which he gave his consideration for the conveyance.

These conditions having been fulfilled, “a purchaser’s plea of a

purchase for valuable consideration without notice is an absolute,
unqualified, unanswerable defence and an unanswerable plea to
the jurisdiction of the Court”.

(Pilcher Vs. Rawlins (1872) 7 Ch App259)

b. Fraud and Gross Negligence (Section 78 of TPA)

Where through the fraud, misrepresentation or gross neglect of a

prior mortgagee, another person has been induced to advance
money on the security of the mortgaged property, to the prior
mortgagee is to be postponed to the subsequent mortgagee.

For example
If A has created a mortgage of his property in favour of B which is a
first mortgage and then approaches C to create the 2nd mortgage on
his property. C tells him that he will give him loan only one condition
that he has not mortgaged his property to anybody else before. A
and B said nothing on the issue and kept silent. When C became
aware of the first mortgage he said to A and B that you have
committed fraud against me and the principle is that if a prior right
holder became accomplice in crime of fraud, he has no right. So C
can take protection of the 2nd exception of the general rule.

c. Registration of an Instrument – A legal requirement?

Where any instrument relating to the immovable property is

required by law to be reduced in registration then it is necessary
that the instrument must be reduced in writing.

A registered instrument gets priority over a non-registered

instrument.

2- LIMITATION OF THIS MAXIM

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 For the application of this maxim

 Unequal Equities
Where equities are unequal, he who has the best equity takes
precedence.

 Notice to Transferee
Purchase for value with notice – If the subsequent transferee had
the prior knowledge of the prior charge, then no priority will be
given to him.

 Fraud and Gross Neglect

No relief shall be given where fraud and gross neglect is found. The
prior mortgage will be postponed.

3- RECOGNITION IN PAKISTAN

a. THE TRANSFER OF PROPERTY ACT

Section 53, 78, 79

b. REGISTRATION ACT

Section 50

c. THE SPECIFIC RELEIF ACT

Section 27 (b)

4- CONCLUSION

 In a situation in which there is no clear distinction to be drawn

between parties as to which of them has the better claim in equity,
the common law principle which best fits the case is applied.
 So, in circumstances where two people have both purported to
purchase goods from a fraudulent vendor of those goods for the
same price, neither of them would have a better claim to the goods
in equity. Therefore, the ordinary common law rules of commercial
law would be applied in that context.
 Equity favours a purchaser for value without notice.  A volunteer is
a person who has not paid consideration.  Exception to the
application of this maxim is in Trust.