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Law of equity-maxims - Lecture notes 3-4
maxims of equity
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Law of Equity
Definition of equity by various jurists
Mainland: ‘’Equity now is that body of rules administered by English Courts of justice which were if
not for the operation of the judicature Acts, would be administered only by those courts which
would be known as Courts of Equity.”
Henry Levery Ulman: “Equity is a body of rules, the primary source of which was neither custom nor
written law but the imperative details of conscience and which had been set forth and developed in
the Court of Chancery.”
Snell: “Equity ..... in its technical sense, may be defined as a portion of natural justice, which , though
of such a nature as properly to admit of being judicially enforced, was, from circumstances hereafter
to be noticed, omitted to be enforced by common law Courts – an omission which was supplied by
the Court of Chancery.”
Origin and nature of Equity
Two distinct systems of law were administered by different tribunals at the same time in England till
the year 1875. The older system was the common law and it was administered by the King’s
Benches. The more modern body of legal doctrine developed and administered by the chancellor in
the court of chancery as supplementary to and coercive of the old law was the law of Equity.
The two systems of law, as mentioned above, were by and large identical and in harmony leading to
the maxims that ‘equity follows the law’. In other words, the rules already established in the old
Courts were adopted by the Chancellor and incorporated into the systems of equity, unless there
was some sufficient reason for their rejection or modification. In case of conflict, the rule of
Chancery prevailed, because if a common law action was brought in defiance of a rule of equity, the
defendant could apply to the Court of Chancery for an order called a common injunction, directed to
the plaintiff and ordering him not to continue his action.
Growth of the Law of equity: A dual system of rights and interests, namely – legal and equitable,
came to the fore due to the double system of the administration of justice in England before the
Judicature Act, 1873 – 1875.
Nature
(1) The general rule is that equity follows the law and the equitable interests have in general the
same incidents and attributes as have corresponding legal interests. They devolve and can be
settled, mortgaged and disposed of precisely in the same way as legal interests.
(2) Equity follows the law and as such a legal estate or interest takes procedure over the equitable
estate or interests. That is, in case of conflict between equity and law, the law prevails.
(3) An equitable right arises when a right vested in one person by the law should, in the view of
equity, be, a matter of conscience, vested in another.
(4) Where equities are equal, that which is first in time will prevail.
Equity in the Indian context
Most of the equitable principles and rules have, in India, been embodied in the statute law and has
been made applicable to the extent of the provisions made therein. That, the provisions of equity in
Indian statute books might have their source in common law or in equity or in an adjustment
between the two, is immaterial.
Statutory recognitions of the principles of equity is found in the Indian Contract Act, 1872, the
Specific Relief Act, 1877, the Indian Trust act, 1882, the Transfer of Property Act,1882, and in the
Indian Succession Act, 1925.
The equitable doctrines featuring in the Indian Contract Act are mainly, the doctrine of penalties and
forfeiture, stipulations as to time in a contract, equitable relief on the ground of misrepresentation,
fraud and undue influence.
The statutory recognition of the principles of equity in the Specific Relief Act are regarding
injunction, specific performance, cancellation, rectification and recession etc.
The rules administered by the English Courts of equity under the head of justice, equity and good
conscience are contained in the Indian Trust Act.
Many doctrines of equity are contained in the Transfer of Property Act. The English doctrine of part
performance has been drawn in section 53A of the Act. Section 48 and 51 are also based on the
equity principles.
It is important to bring to the notice of the readers that though the English rules of equity have been
substantially incorporated by the Indian Legislature, yet, there are many other rules of English Equity
are either not been followed in India or are adopted only in a modified form, keeping in view the
different ground realities of the country.
General Principles of Equity
The subject matter of the equity can be grouped around some legal maxims which embody the
general principles on which the court of chancery exercised its jurisdiction. Some of such important
maxims are as follows:
(1) Aequitaes est corectio legis generalities latae, qua parte deficit: i., Equity is a correction of the
general law in the part where it is defective – For a long time, the English Courts were guided by the
doctrine ubi remedium ibi jus (where there is a remedy there is a right) but with the development of
the Court of Chancery in England, this doctrine gave way to a more pragmatic and just doctrine
called ‘ubi jus ibi remedium’ (where there is a right there is a remedy).
A right is a right only when it can be enforced by the court. A remediless right is of no consequence.
Thus, in order to give effect to a right which is suitable for judicial enforcement but which could not
be enforced at common law due to some technical defect, the Court of Chancery developed the
maxim ‘equity will not suffer a wrong to be without a remedy.’
The Court of Chancery applied the maxim in those cases where there was a failure of justice due to
the deficiencies in law, and to help the litigants in obtaining legal reliefs for the violation of legal
rights by offering facilities in evidence and procedure which the common law courts did not secure.
The maxim is to give an adequate relief where the one available in common law court was
inadequate.
caused. Any such contract may be set aside either absolutely or, if the party who was entitled to
avoid it, has received any benefit there under, upon such terms and conditions as the court may
deem first.” (Section 19A)
Further section 64 and 65 of the Indian Contract Act are also based on the doctrine ‘he who seeks
equity must do equity’.
The maxim, however, does not apply when relief sought by the plaintiff and equitable right or relief
secured to or sought by the defendant belongs to or originates from two entirely separate and
distinct matters. Further, it is not applicable where the plaintiff seeks to enforce purely legal rights.
(4)Vigilantibus, non dormientibus jura subvenient i., the law helps the vigilant and the dormant –
While a legal claim is not barred by any lapse of time less then the prescribed statutory period of
limitation, an equitable claim, on the other hand, may be barred by delay on the part of the plaintiff
seeking relief.
Delay, however, means unreasonable delay in claiming relief and an ordinary or reasonable delay. A
court of equity has always refused its aid to demands where a party has slept upon his rights and
acquiesced for a great length of time.
An unreasonable delay defeats equity. But such legal or equitable claims to which the statutes of
limitation apply expressly or by analogy the maxim ‘delay defeats equity’ does not apply. In such
cases, delay so far as it is within the statutory period will not defeat a claim.
(5)Equity delights in equality – The English Court of Chancery, incorporated into the Equity
jurisprudence of English Law, the concept of acquitas i. the notion of equality and impartiality as
conceived by the Roman jurists. The equity, thus, so far as possible, puts the parties to a transaction
on an equal footing, although the strict rules of law may give one party an advantage over the other.
Equality have does not mean literal equality, but it means ‘proportional equality’.
The maxim has wide application. Following are some illustrations
(1) In case of the assets of insolvent debtor, equity insists on a rateable distribution by abolishing
preferential treatment of certain creditors.
(2) A creditor having a single clause against several debtors, can, realise the debt from any of such
debtors. But the debtor who had thus been compelled to pay the debt in full, though without any
remedy against his co-debtors, could in equity, claim contribution from them in order that the
burden passes equally.
(3) In a case where there are two creditors of the same debtors, and one creditor has a right to
resort to two funds of the debtors; the other creditor has a right to only one of them. The Court on
basis of the maxim shall as ‘Marshall’ the funds that both the creditors are paid as much and as far
as possible.
Place of the maxim in Indian context
The Code of Civil Procedure, section 48, provides that where assets are held by a court and more
persons than one have (before the receipt of such assets) made application to the Court for the
execution of decrees for the payment of money passed against the same judgement- debtor and
have not obtained satisfaction thereof, the assets after deducting the costs of realisation will be
reliably distributed among all such persons.
Other provisions giving effect to the maxim are section 42 of the Indian Contract Act that applies the
principle of tenancy-in-common, section 43,63-70,146-147 of the Indian Contract Act and section 82
of the Transfer of Property Act, laying provisions relating to ‘contribution’.
(6)Where equities are equal , the first in time shall prevail – 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 other or others e., 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 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.
Application of the maxim in India – Section 48, 78 and 79 of the Transfer of Property Act, provides
the example of this maxim.
Section 78 provides that where through the fraud, misrepresentation, gross neglect of a prior
mortgagee, another person has been induced to advance money on the security of the mortgaged
property the prior mortgagee shall be postponed to the subsequent mortgagee.
(7) Legal estate prevails over the equitable estate – Where there is a question of selection between
equity on one hand over text of law on the other, the Court shall choose the latter. To say it
differently, the person in possession of legal estate is entitled to priority over any person having
merely an equitable estate in that property.
‘Where there is equal equity, the law shall prevail’ is another version of the maxim. Accordingly,
clear text will outweigh the equities written or legal estate prevails over the equitable estate. This
doctrine is different from the one discussed earlier (in 6) in the sense that whereas in the previous
one, the controversy is with regard to equitable rights only and the question is of time, whereas in
the previous one, the controversy is with regard to equitable rights only and the question is of time,
whereas, in the present doctrine, the controversy is between legal and equitable provision.
Applicability of the maxim in India – The ‘Doctrine of Election’, Marshalling and ‘set off’, of Indian
law are based on this maxim. The principle of the maxim has been incorporated in section 40 and 78
of the Transfer of Property Act, 1882. According to section 40, where a third person is entitled to the
benefit of an obligation arising out of contract and annexed to the ownership of immovable
property, but not amounting to an interest therein or an easement thereon, such right or obligation
may be enforced against a transferee with notice thereof gratuitous transferee of the property
affected thereby, but not against a transferee for consideration and without notice of the right or
obligation, nor against such property in his hands. This provision in a case of ‘’prior equitable and
subsequent equitable estate.
Further, section 78 provides that 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.
Doctrine of Election
In equity the doctrine of election is founded on the rule that a person who takes under an
instrument must give effect to every part of it. Thus, if a testator devises his own estate to A, and A’s
estate to B, A must elect whether he will take ‘under’ or ‘against’ the will. If he elects to take
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Law of EquityDefinition of equity by various jurists1. Mainland: ‘’Equity now is that body of rules
administered by English Courts of justicewhich were if not for the operation of the judicature Acts,
would be administered only by thosecourts which would be known as Courts of Equity.”2. Henry
Levery Ulman: “Equity is a body of rules, the primary source of which was neithercustom nor written
law but the imperative details of conscience and which had been set forth anddeveloped in the
Court of Chancery.”3. Snell: “Equity ….. in its technical sense, may be defined as a portion of
natural justice,which , though of such a nature as properly to admit of being judicially enforced, was,
fromcircumstances hereafter to be noticed, omitted to be enforced by common law
Courts – anomission which was supplied by the Court of Chancery.”Origin and nature of Equity
Two distinct systems of law were administered by different tribunals at the same time inEngland till
the year 1875. The older system was the common law and it was administered by theKing’s Benches.
The more modern body of legal doctrine developed and administered by thechancellor in the court
of chancery as supplementary to and coercive of the old law was the lawof Equity. The two
systems of law, as mentioned above, were by and large identical and in harmonyleading to the
maxims that ‘equity follows the law’. In other words, the rules already establishedin the old Courts
were adopted by the Chancellor and incorporated into the systems of equity,unless there was some
sufficient reason for their rejection or modification. In case of conflict, therule of Chancery prevailed,
because if a common law action was brought in defiance of a rule ofequity, the defendant could
apply to the Court of Chancery for an order called a commoninjunction, directed to the
plaintiff and ordering him not to continue his action. Growth of the Law of equity: A dual system
of rights and interests, namely – legal andequitable, came to the fore due to the double system of
the administration of justice in Englandbefore the Judicature Act, 1873 – 1875.Nature(1) The
general rule is that equity follows the law and the equitable interests have in general thesame
incidents and attributes as have corresponding legal interests. They devolve and can besettled,
mortgaged and disposed of precisely in the same way as legal interests.(2) Equity follows the law
and as such a legal estate or interest takes procedure over theequitable estate or interests.
That is, in case of conflict between equity and law, the law prevails.(3) An equitable right arises
when a right vested in one person by the law should, in the view ofequity, be, a matter of
conscience, vested in another.(4) Where equities are equal, that which is first in time will prevail.
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