Equity : Maxims of Equity

B.A. LL.B (Hon) Semester ± VII

Dr. Krishna Pal Malik Asst. Prof. in law, Institute of Law Nirma University, Ahmedabad

What is equity
‡ In its primary sense equity is fairness, or that rule of conduct which in the opinion of person or class ought to be followed by all other persons. ‡ Osborne says ³it is primary fairness or natural justice.´ ‡ Sir Henry Maine said ³it is a fresh body of rules by the side of original law, founded on the distinct principles and claiming to supersede the law by virtue of a superior sanctity inherent in those principles.´
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(1705) Prec Ch. are made remediless. [Sir Nathan Wright in Dudley v. The equity means to do unto all men as we would they should do unto us. whereby such. moderates and reforms the rigour.Equity«. delusions and new subtleties.. and is a universal truth. have undoubted right. which means equalization or leveling down any arbitrary preferences or denial of justice. It is a means to reach as near as possible to natural or ideal justice. it does also assist the law where it is defective and week in the constitution and defends the law from crafty evasions. ‡ Equity is not part of the law. hardness and edge of the law. which qualifies. but one cannot forget that equity is not natural justice. Dudley. invented and contrived to evade and delude the common law. but a moral virtue. ‡ The term equity is derived from the Roman term ³aequitas´. 241] KPM-Equity 3 .

‡ When law become fixed. when legal fictions also becomes outdated. till finally a point is reached when expansion of equity ceases. ‡ In progressing societies social necessities and social opinions are always more or less in advance of law.Equity«. equity softens the rigorous of law. KPM-Equity 4 . (i) Legal Fictions. (ii) Equity and (ii) Legislation. ‡ The gulf that is created between the social opinions and the existing law is bridged by three instrumentalities. legal fiction liberalized it. namely.

was for historical reasons not enforced by the common law courts.« it is a correction of legal justice ± Aristotle ‡ It is the soul and sprit of all law. an omission which was supplied by the court of chancery. but better than the error that arises from the absoluteness of the statements . in that it is the true and sound interpretation of the rule. In this equity is synonymous with justice. Positive law construed and natural law is made by it. ± Snell KPM-Equity 5 .Definition of equity ‡ Equity is a necessary element supplementary to the imperfect generalization of legal rules ± Plato ‡ The equitable is just and better than one kind of justice ± not better the absolute justice. ± Blackstone ‡ Equity is a portion of natural justice which along with of a nature suitable for judicial enforcement.

a body of law or jurisprudence developed which was time and again phrased in the form of maxims. ‡ The maxims of equity evolved. some are commonly known among laymen. as the principles applied by courts of equity in deciding cases before them. The King's chancellor. ‡ Some of the maxims of equity are as follws KPM-Equity 6 . in Latin and eventually translated into English.Maxims of equity ‡ Courts of Equity were created to hear and determine disputes in which the Courts of Law could not grant the requested relief. heard the complaints for equitable relief. who "held the king's conscience". Over the centuries.

‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Equity regards as done that which ought to be done Equity will not suffer a wrong to be without a remedy Equity delights in equality One who seeks equity must do equity Equity aids the vigilant. not those who slumber on their rights Equity imputes an intent to fulfill an obligation Equity acts in personam Equity abhors a forfeiture Equity does not require an idle gesture One who comes into equity must come with clean hands Equity will not permit a party to profit by his own wrong Equity delights to do justice and not by halves Equity will take jurisdiction to avoid a multiplicity of suits Equity follows the law Equity will not aid a volunteer Between equal equities the law will prevail Between equal equities the first in order of time shall prevail Equity will not complete an imperfect gift Equity will not allow a statute to be used as a cloak for fraud Equity will not allow a trust toKPM-Equity fail for want of a trustee 7 .

Equity regarding what ought to be done : ‡ This maxim means that when individuals are required. It was clear that if the notice had been received by the policyholder. the buyer is deemed to have obtained an equitable right that becomes a legal right only after the deal is completed. When parties enter a contract for a sale of property. ‡ Example : Thus. by their agreements or by law to have done some act of legal significance. and of equitable conversion. he or his wife would have taken steps KPM-Equity 8 . are significant in their bearing on the risk of loss in transactions. ‡ The consequences of this maxim. premiums on a life policy were overdue. even before it has actually happened. in one case. The insurer's letter to the policyholder warning him of this fact was never received by the policyholder. Equity will regard it as having been done as it ought to have. who died shortly after the policy consequently lapsed. This makes possible the legal phenomenon of equitable conversion.

Six Unknown Named Agents. The Latin legal maxim is ubi jus ibi remedium ("where there is a right. These are superior remedies to those administered at common law such as damages. KPM-Equity 9 . ‡ Case law dealing with this maxim is include Ashby v. ‡ The maxim is necessarily subordinate to positive principles and cannot be applied either to subvert established rules of law or to give the courts a jurisdiction hitherto unknown. the one that has been wronged has the stronger hand. White and Bivens v. In equity. there must be a remedy"). 403 US 388 (1971). and it is only in a general not in a literal sense that maxim has force. this form of remedy is usually one of specific performance or an injunction (injunctive relief). The stronger hand is the one that has the capacity to ask for a legal remedy (judicial relief).Equity will not suffer a wrong to be without a remedy ‡ When seeking an equitable relief.

This may also overlap with the clean hands maxim. ‡ One who seeks equity must do equity :To receive equitable relief. KPM-Equity 10 . the party must be willing to complete all of their own obligations as well. of jointly-held property. Equity also favours partition. Thus Equity will presume joint owners to be tenants in common unless the parties have expressly agreed otherwise.‡ Equity delights in equality : Where two persons have an equal right. if requested. the property will be divided equally. The applicant to a court of equity is as subject to the power of that court as the defendant.

Equity aids the vigilant." an equitable term used to describe delay sufficient to defeat an equitable claim. the equitable rule of laches and acquiescence was introduced. they are guilty of laches. equity may apply the doctrine of "laches. Laches is a defense to an action in equity. ‡ Otherwise. they must act relatively swiftly to preserve their rights. once the party knows they have been wronged. KPM-Equity 11 . not those who sleep on their rights (Vigilantibus non dormientibus aequitas subvenit). but even where a limitation period has not yet run. According to this maxim. ‡ In Chief Young Dede v. African Association Ltd. not those who slumber on their rights ‡ Equity aids the vigilant. This maxim is often displaced by statutory limitations.

Equity imputes an intent to fulfill an obligation ‡ Generally speaking. such as in the exercise of an option. near performance of a general obligation will be treated as sufficient unless the law requires perfect performance. Equity regards such a gift as performance of the obligation so the creditor cannot claim both the legacy and payment of the debt. KPM-Equity 12 . ‡ Text writers give an example of a debtor leaving a legacy to his creditor equal or greater to his obligation.

Rather. This distinction helped preserve a separation of powers between the two courts. it required that the applicant be asserting a right of some significance. to hold a violator in contempt.Equity acts in personam : ‡ In England. and take away his or her freedom (or money) until he obeyed. Their coercive power was the ability. KPM-Equity 13 . on authority of the crown. as opposed to emotional and dignitary interests. ‡ Nevertheless." This was a limitiation on their own power to issue relief. It does not mean that the courts of equity had taken jurisdiction over property. and their coercive power arose out of their ability to adjust ownership rights. Courts of law had jurisdiction over property. there was a distinction in the type of adjudicatory jurisdiction of the courts and the chancery. courts of equity also developed a doctrine that an applicant must assert a "property interest. Courts of equity had power over individuals.

a mortgagor refers to his interest in the property as his "equity.Equity abhors a forfeiture ‡ Today. plead that there was an unconscionable forfeiture about to occur. with a condition subsequent. and beg the court to grant an equitable decree requiring the lender to surrender the property upon payment of the secured debt with interest to date. was actually a mirror-image of the current practice. however. ‡ As was inevitable. a mortgage was a conveyance of the property. At common law. ‡ So then the debtor would run to the court of equity. KPM-Equity 14 . otherwise to remain in full force and effect. debtors would be unable to pay on the law day. the creditor owed no duty to give the land back. And the equity courts granted these petitions quite regularly and often without regard for the amount of time that had lapsed since the law day had passed. and if they tendered the debt after the time had passed. that if the grantor paid the secured indebteness to the grantee on or before a date certain (the "law" day) then the conveyance would be void." The origin of the concept.

It would be an idle gesture for the court to grant reformation of a contract and then to deny to the prevailing party an opportunity to perform it as modified. KPM-Equity 15 .Equity does not require an idle gesture ‡ Equity will not compel a court to do a vain and useless thing.

One who comes into equity must come with clean hands ‡ It is often stated that one who comes into equity must come with clean hands (or alternately.Y. a man who had killed his grandfather to receive his inheritance more quickly (and for fear that his grandfather may change his will) lost all right(s) to the inheritance. if you desire your tenant to vacate. you must have not violated the tenant's rights. then you do not have clean hands and you may not receive the help you seek. In other words. Palmer (1889) 115 N. in Riggs v. KPM-Equity 16 . equity will not permit a party to profit by his own wrong). if you ask for help about the actions of someone else but have acted wrongly. ‡ For instance. For example. 506.

2d 917. e.‡ Equity delights to do justice and not by halves : When a court of equity is presented with a good claim to equitable relief. "where a court of equity has all the parties before it.g. 1983). but goes on to render a full and complete collection of remedies. Hence equity does not stop at granting equitable relief. the court of equity has jurisdiction to render legal relief.. ‡ Equity will take jurisdiction to avoid a multiplicity of suits : Thus. and it is clear that the plaintiff also sustained monetary damages. KPM-Equity 17 . 670 P. Hughes. monetary damages. it will adjudicate upon all of the rights of the parties connected with the subject matter of the action." Burnworth v. 922 (Kan. This is the basis for the procedures of interpleaded and the more rarely used bill of peace. so as to avoid a multiplicity of suits.

"Equity works as a supplement for law and does not supersede the prevailing law."where a rule. or the particular point. 254 N. As per Cardozo in Graf v. and governs the case with all its circumstances. The court of Chancery never claimed to override the courts of common law. and can as little justify a departure from it. Hope Building Corporation. either of the common or the statute law is direct." ‡ it is only when there is some important circumstance disregarded by the common law rules that equity interferes.Y 1 at 9 (1930). ‡ In Story on Equity third English edition 1920 page 34." KPM-Equity 18 .Equity follows the law ‡ Equity will not allow a remedy that is contrary to law. a court of equity is a much bound by it as a court of law.

KPM-Equity 19 .Equity will not aid a volunteer : ‡ Equity cannot be used to take back a benefit that was voluntarily but mistakenly conferred without consultation of the receiver. which were later additions in the courts of law. ‡ This maxim is very important in restitution. and were more flexible tools of recovery. Restitution developed as a series of writs called special assumpsit. Restitution could provide means of recovery when people bestowed benefits on one another (such as giving money or providing services) according to contracts that would have been legally unenforceable. This maxim protects the doctrine of choice. based on Equity.

" KPM-Equity 20 . then the applicant would be obligated to bring a legal. they were hesitant to do so.Between equal equities the law will prevail ‡ Equity will provide no specific remedies where the parties are equal. if the law did provide relief. had the power to alter that status quo. as lawmakers. rather than equitable action. ‡ But. ‡ The significance of this maxim is that applicants to the chancellors often did so because of the formal pleading of the law courts. or legal defences. the law created no cause of action. in theory. Law courts and legislature. This maxim reflects the hesitancy to upset the legal status quo. equity would provide no relief. and the lack of flexibility they offered to litigants. This maxim overlaps with the previouslymentioned "equity follows the law. Equity. through the limits of the substantive law they had created. and private ordering of disputes. If in such a case. or where neither has been wronged. ignoring the limits of legal relief. thus inculcated a certain status quo that affected private conduct.

If the purchaser takes title with notice of the defect. if valid. the equities are equal and the legal estate will prevail. ‡ When a purchaser acquires property bona fide without notice of a defect in the vendor¶s title. the earlier title. precedence will be given to the legal interest. Where the claims of both parties are fair and meritorious.Between equal equities the first in order of time shall prevail ‡ This maxim operates where there are two or more competing interests. ‡ The force of this maxim has largely been displaced by legislated systems of land title registration. This maxim was developed in connection with interests in lands. will prevail. KPM-Equity 21 . one legal and the other equitable.

a court may appoint a trustee.‡ Equity will not complete an imperfect gift : If a donor has made an imperfect gift. Otherwise. ‡ Note the exception in Strong v. or in Ireland the trustee may be any administrator of a charity to which the trust is related. and the donor subsequently dies. ie lacking the formalities required at common law. KPM-Equity 22 . A subset of equity will not assist a volunteer. equity will perfect the imperfect gift. ‡ Equity will not allow a trust to fail for want of a trustee : If there is no trustee. ‡ Equity will not allow a statute to be used as a cloak for fraud : Equity prevents a party from relying upon an absence of a statutory formality if to do so would be unconscionable and unfair. equity will not assist the intended donee. Bird (1874) LR 18 Eq 315. If the donor appoints the intended donee as executor of his/her will. whoever has title to the trust property will be considered the trustee. This can occur in secret trusts and also constructive trusts and so on.

what would be most fair and equitable in the opinion of judge would be done in particular case. Abu Hanifa. In absence of any specific law.Principle of Equity in India ‡ It was maintained even under smiritis that one¶s own satisfaction to the source of dharma. These aspects under ancient law amply cover the modern concept of justice equity and good conscience. In the smriti or in the event of a conflict between the smrities. the great jurist (Mughal period) called this µIstihasan¶ (literally translated as µjuristic preference¶). Brispati and now Supreme Court supported this source of law. ‡ Narad. KPM-Equity 23 . Where the law analogically deduced is in adaptable to the present needs of society or where it is such that its rigid application would result in hardship to the public then rule of equity should become applicable. the principle of justice. It was also ordained that any decision should be arrived based upon Yukti or Nayaya. equity and good conscience shall apply.

AIR 1955 All 688] KPM-Equity 24 . particularly it would be open to the courts to draw upon this source where rigidity or narrowness of rules suggested need for adjustment in the light of changes brought about by the altered conditions of life and society in a particular age. The Allahabad Court held that where there is a conflict of opinion. (1925) 47 All 823] ‡ Again. [Hazi Mohammad v. [Aziz Bano v. Muhammad.‡ According to Maine ³the most useful of instruments in the maturity of jurisprudence is the most dangerous of shares in its infinity´. and there is no specific rule to guide the court. Allahabad High Court held that when there is no clear authority available on a point or where the authorities available are of conflicting nature. equity and good conscience. it is open to the jurists even according to a school of Muslim law to resort to principle of equity for the purpose of deciding a particular question at issue before them. The court follows that opinion which is more in accordance with justice. Abdul Ghafar.

though on face of it decision may look legitimate but. On this principle the Privy Council also had decided a case that murderer was disqualified from succeeding in the property of the victim. [Onkar Lal Bajaj v. in absence of any clear shastric text. equity and fair play and has taken into consideration other matters. Kamlabai. the principle of governance has to be tested on touchstone of jus-tice. that decision cannot be allowed to operate. Union of India. AIR 1955 SC 206] ‡ The Hon¶ble Supreme Court held that. equity and fair play and if decision is not based on jus-tice. the courts have the authority to decide cases on the principles of justice.[Gurunath v. as a matter of fact.Judicial Interpretation ‡ The Hon¶ble Supreme Court while referring the decision of Privy Council held. reasons are not based on values but to achieve popular accolade. AIR 2003 SC 2562] KPM-Equity 25 . equity and good conscience.

etc. the specific Relief Act. and where a question of interpretation of such Equity based statutory provisions arise. Bai Dosabai v. ‡ Many of the principles of English Equity have taken statutory form in India and have been incorporated in occasional provisions of various Indian Statutes such as the Indian Trusts Act. Mathurdas Govinddas.SC opinion on equity ‡ Three judges bench of Supreme Court has observed that ‡ The English doctrine of conversion of reality into personality cannot be bodily lifted from its native English soil and transplanted in statute-bound Indian Law. the Court will be well justified in seeking aid from the Equity source. Transfer of Property Act.. AIR 1980 SC 1334 : 1980 (3) SCC 545 KPM-Equity 26 .

not amounting to an interest in the property. of itself create any interest in or charge on such property. AIR 1980 SC 1334 : 1980 (3) SCC 545] KPM-Equity 27 . ‡ But the ultimate and penultimate paragraphs of section 40 of the Transfer of Property Act make it clear that such a contract creates an obligation annexed to the ownership of immovable property.SC«« ‡ The concept and creation of quality of ownership. but which obligation may be enforced against a transferee with notice of the contract or a gratuitous transferee of the property. [Bai Dosabai v. Mathurdas Govinddas. i. on the execution of an agreement to convey immovable property.. as understood in England is alien to Indian law which recognises one owner. legal and equitable. the legal owner. ‡ The ultimate paragraph of Section 54 of Transfer of Property Act expressly enunciates that a contract for the sale of immovable property does not.e.

not amounting to an interest in the property. ‡ Thus the Equitable ownership in property recognised by Equity in England in translated into Indian law as an obligation annexed to the ownership of property. but an obligation which may be enforced against a transferee with notice or a gratuitous transferee. AIR 1980 SC 1334 : 1980 (3) SCC 545 KPM-Equity 28 . Mathurdas Govinddas.SC««. Bai Dosabai v.

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