Law Notes - Maxims of Equity

9/9/2014 Law Notes: Maxims of Equity
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Sunday, August 31, 2008
Maxims of Equity
Maxims of Equity

1. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A
REMEDY

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 the scope and the basis of on which the
structure of equity rests. This 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.

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 to maintain it, and a
remedy, if he is injured in the enjoyment of it.
In cases where some document was with the defendant and it was
necessary for the plaintiff to obtain its discovery or production, a
recourse to the Chancery Courts had to be made for the Common
Law becoming wrongs without remedies.

Limitation
a) If there is a breach of a moral right only.
b) If the right and remedy both were in within the jurisdiction of the
Common Law Courts.
c) Where due to his own negligence a party either destroyed or
allowed to be destroyed, the evidence in his own favour or waived
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his right to an equitable remedy.

Recognition
i) The Trust Act
ii) Section 9 of CPC- entitles a civil court to entertain all kinds of suits
unless they are prohibited.
iii) The Specific Relief Act- provides for equitable remedies like
specific performance of contracts, injunction, declaratory suits.

2. EQUITY FOLLOWS THE LAW

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. Maitland said, Thus equity came
not to destroy the law but to fulfill it, to supplement it, to explain it.
The goal of equity and law is the same, but due to their nature and
due to historic accident they chose different paths. Equity respected
every word of law and every right at law but where the law was
defective, in those instances, these Common Law rights were
controlled by recognition of equitable Rights. Snell therefore explained
this maxim in slightly different way: Equity follows the law, but not
slavishly, nor always.

At common law, where a person died intestate who owned an estate
in fee-simple, leaving sons and daughters, the eldest son was entitled
to the whole of the land to the 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 hi
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. This decision was held in Stickland v. Aldridge.
Equity follows the law and even if by analogy law can be followed, it
should be followed.

Limitation
i) Where a rule of law did not specifically and clearly apply
ii) Where even by analogy the rule of law did not apply

Recognition
Rules and Procedures of the
Parliament
Maxims of Equity
Term Paper Case study
Law on Torts (part-2)
Law on Torts (part-1)
Hindu Law (Part 2)
Hindu Law (part 1)
Glossary of Legal terms
Fallacy
Procedure of trial (Civil & Criminal)
All about the Courts of Bangladesh
Special Courts & Tribunals at a
glance
Criminal procedure in brief
Mediation and Negotiation
Techniques of Legal Research
English for Law
Legal profession & Ethics
History of Government of
Bangladesh since independ...
Some Question Answer of
Constitutional law of BD
Some Question Answer of Legal
History of BD
Contributors
Provat Nazmi
Khaled Saifullah
Bangladesh has not recognized the well-known distinction between
legal and equitable interests. Equity rules in Bangladesh, therefore,
cannot override the specific provisions of law. As for example, every
suit in Bangladesh 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. Such a
decision was held in Indian Appa Narsappa Magdum case.

3. HE WHO SEEKS EQUITY MUST DO EQUITY

Meaning
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. Scriptures of Islam also
inform us to be conscientious:
Woe to those who stint the measure:
Who when they take by measure from others, exact the full;
But when they mete to them or weigh to them, minish

This maxim has application in the following doctrines-
i) Illegal loans
ii) Doctrine of Election
iii) Consolidation of mortgages
iv) Notice to redeem mortgage
v) Wifes equity to settlement
vi) Equitable estoppel
vii) Restitution of benefits on cancellation of transaction
viii) Set-off

i) 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 a 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.

ii) Doctrine of election: Where a donor A gives his own property
to B and in the same instrument purports to give Bs property to
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C, B will be put to an election, either accept the benefit granted
to him by the donor and give away his own property to C or
retain his own property and refuse to accept the property of A
on condition. But B can not retain his property and at the same
time take the property of A.

iii) Consolidation of mortgages: Where a person has become
entitled to two mortgages from the same mortgagor, he may
consolidate these mortgages and refuse to permit the
mortgagee to exercise his equitable right to redeem one
mortgage unless the other is redeemed. The right of
consolidation now exists in England but after the enactment of
the Law of Property Act, 1925, it can exist only by express
reservation in one of the mortgage deeds.

iv) Notice to redeem mortgage: Notice to a mortgagor to redeem
ones mortgage is an equitable right of the mortgagor.

v) Wifes equity to a settlement: There was a time when womans
property was merged with that of her husband. She had no
property of her own. Equity court imposed on the husband that
he must make a reasonable provision for his wife and her
children. But, now, Under the Law Reform (Married Women and
Tortfeasors) Act, 1935, married women has full right on her
property and it is not consolidated with her husbands property.

vi) Equitable estoppel: A promissory estoppel arises where a party
has expressly or impliedly, by conduct or by negligence, made
a statement of fact, or so conducted himself, that another would
reasonably understand that he made a promise thereon, then
the party who made such promise has to carry out his promise.

vii) Restitution of benefits on cancellation of transaction: It is
proper justice to return the benefits of a contract which was
voidable, and, equity enforced this principles in cases where it
granted relief of rescission of a contract. A party can not be
allowed to take advantage of his own wrong.

viii) Set-off: Where there have been mutual credits, mutual debts or
other natural dealings between the debtor and any creditor, the
sum due from one party is to be set-off against any sum due
from the other party, and only the balance of the account is to
be claimed or paid on either side respectively.

Limitation
i) The demand for an equitable relief must arise from a suit that is
pending.
ii) This maxim is applicable to a party who seeks an equitable relief.

Recognition
i) Under sec 19-A of the Contract Act, 1872 if a contract becomes
voidable and the party who entered into the contract voids the
contract, he has return the benefit of the contract.
ii) sec 35 of the Transfer of Property Act embodies the principle of
election.
iii) Sec 51 and 54 of the Transfer of Property Act.
iv) In Order 8, Rule 6 of the CPC, the doctrine of Set-off is recognized.

4. HE WHO COMES INTO EQUITY MUST COME WITH CLEAN
HANDS

Meaning
Equity demands fairness not only from the defendant but also from
the plaintiff. It is therefore said that he that hath committed an
inequity, shall not have equity. While applying this maxim the court
believed that the behavior of the plaintiff was not against conscience
before he came to the court.

In Highwaymen case, two robbers were partners in their own way.
Due to a disagreement in shares one of them filed a bill against
another for accounts of the profits of robbery. Courts of equity do
grant relief in case of partnership but here was a case where the
cause of action arose from an illegal occupation. So, the court refused
to help them.
The working of this maxim could be seen while giving the relief of
specific performance, injunction, rescission or cancellation.

Limitation
General or total conduct of the plaintiff is not to be considered. It will
be seen whether he was of clean hands in the same suit he brought
or not. Brandies J. in Loughran v. Loughran said that Equity does not
demand that its suitors shall have led blameless lives.

Exception
i) If the transaction is a against public policy
ii) if the party repents for his conduct before his unjust plans are
carried out.

Recognition
i) Section 23 of the Indian Trust Act- An infant can not setup a
defence of the invalidity of the receipt given by him.
ii) Section 17, 18 and 20 of the Specific Relief Act, 1877- Plaintiffs
unfair conduct will disentitle him to an equitable relief of specific
performance of the contract.

Distinction between maxim no. 3 and 4-
He who seeks equity must do
equity
He who comes into equity
must come with clean hands
i) It is applicable when both the
plaintiff and the defendant
have claims of equitable
relief against each other.
i) It is applicable when the
defendant has no separate
claim to relief and the
plaintiffs conduct is unfair.
ii) It exposes the condition
subsequent to the relief
sought.
ii) It is a condition precedent to
seeking equitable relief.
iii) It refers to the plaintiffs
conduct as the court thinks
it ought to be, after he
comes to the court.
iii) It refers to the plaitiffs
conduct before he
approaches the court.
iv) The plaintiff has to mould his
behavior according to the
impositions by the court.
iv) If the plaintiffs conduct is
unfair, it would not entitle him
to the relief sought.
v) The plaintiff has an option or
a choice before him either
to submit to the conditions
put by the court, or to get
out of the court.
v) The conduct of the plaintiff
snatched his choice from
him. His equitable right
therefore neither be
recognized nor enforced.
vi) This maxim looks to the
future.
vi) This maxim looks at the past.

5. DELAY DEFEATS EQUITIES

Meaning
A Latin term in this regard is Vigilantibus, non dormentibus, jura
subvenient. which means Equity aids the vigilant and not the
indolent. So, if one sleeps on his rights, his rights will slip away from
him. 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.

To cases which are governed by statutes of limitation either expressly
or by analogy the maxim will not apply. Such cases fall into three
categories-
i) Those equitable claims to which the statute applies expressly.
ii) to which the statute applies by analogy.
iii) Equitable claims which are covered by ordinary rules of laches.
Doctrine of laches- Plaintiffs unreasonable delay is a weapon of
defence by the defendant against the plaintiff.
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 of the land it was decided that as the period of
limitation to recover possession had expired, no relief could be
granted. Also the case of Allcard v. Skinner is worth mentioning here.

Limitation
This maxim does not apply when-
i) where the law of limitation expressly applies
ii) where it applies by analogy, and
iii) where the law of limitation does not apply but the cases are
governed by ordinary rules of laches.

Recognition
The English doctrine of delay and laches showing negligence in
seeking relief in a court of equity can not be imported into the
Bangladeshi law in view of Article 113 of the Limitation Act, 1908,
which fixes a period of one year (previously three years) within which
a suit for specific performance should be brought.
Section 51 of the Transfer of Property Act embodies this doctrine but
with a difference.

6. EQUALITY IS EQUITY

Meaning
Plato defined that If you cannot find any other, equality is the proper
basis. This maxim is also explained as equity delighteth in equality,
which means that as far as possible equity would put the litigating
parties on an equal level so far as their rights and responsibilities are
concerned.
Justice Fry said, When I say equality, I do not mean equality in its
simplest form, but which has been sometimes called proportionate
equity.

Application of this maxim can be understood from the following:
i) Equitys dislike for joint tenancy and presumption of tenancy-in-
common
ii) Equal distribution of joint funds and joint purchases
iii) Contribution between co-trustees, co-sureties and co-contractors
iv) Ratable distribution of legacies
v) Marshalling of assets

7. EQUITY LOOKS TO THE INTENT RATHER THAN THE FORM

Meaning

Common law was very rigid and inflexible. It could not respond
favourably to the demand of time. It regarded the form of a transaction
to be more important than its substance. It looked to the very letter of
the agreement and not the intention behind it. On the other hand,
Equity looks to the spirit not to the letter, it looks to the intention of
parties and not to the words.

In case of sale of land, if a party fails to complete it within the fixed for
it, he is at Common Law, in breach of the contract, but equity does not
take this rigid attitude. It allows a reasonable time to the party to
complete it.
The application can be seen in the following instances-
i) Relief against penalties and forfeitures
ii) Relief in regard to precatory trust
iii) Relief in regard to mortgages, the doctrine of equity of redemption
and the doctrine of clogs on redemptions
iv) Attitude in regard to statute of frauds.

i) Relief against penalties and forfeitures- Common Law courts
insisted on the literal form of the contract that if the contract is
breached, certain amount must be given as compensation, though the
actual loss is not that much. Equity interpret the purpose and intent of
the contract itself. The principal object of the contract is to perform it
and not the compensation. The compensation is a subsidiary matter.

ii) Precatory trust- A trust is created with- (1) an intention on his part
to create a trust thereby, (2) the purpose of the trust, (3) the
beneficiary, and (4) the trust property. Where an author uses words
such as I hope, I request or I recommend the first condition is
missing. In cases where subsequent ingredients are found, in early
days, it was held by the equity courts that he had the intention. This
view is in use now but not as liberally as before.

iii) Relief in regard to mortgages- The mortgagor has a right to
obtain his property back by payment of the debt and that is his right of
redemption. The mortgagors right of redemption is guarded by courts
and this has been expressed in a well-known legal maxim, Once a
mortgage, always a mortgage, and nothing but a mortgage.
iv) Attitude in regard to statute of frauds-

Recognition
i) Sec 55 of the Contract Act- If time is the essence of the contract,
and it is not performed within the stipulated time, the contract or part
of it which is unperformed would be voidable. If time is not the
essence, the contract will not be voidable but entitles the promisee to
damages.
ii) Section 74 of the Contract Act- only a reasonable compensation
can be claimed.
iii) Sec 114-A of the Transfer of Property Act- Forfeiture clauses in a
lease.

8. EQUITY LOOKS ON THAT AS DONE WHICH OUGHT TO BE
DONE

Meaning
If someone undertakes an obligation for the other, equity courts look
on it as done and as producing the same results as if the obligation
had been actually performed. 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.

If A makes T trustee leaving 50,000 Taka to purchase a land for the
use of B. T does not purchase the land and by the time, B dies leaving
all immovable property to X and all movable property to Y. Now, who
should get the 50,000 Taka? Equity in such cases would definitely
regard the purchase of land which ought to have been made as made.
The money thus goes to X.
The working of this maxim can be seen-
i) the doctrine of conversion
ii) Executory contracts
iii) doctrine of part performance

i) Doctrine of conversion- In the case of Lachmere v. Lady
Lachmere, money was taken as land. Doctrine of conversion can
convert the money into immovable property and immovable
property into money.
ii) Executory contracts-
(a) Assignment of future property: When an assignment of
property was made for consideration equity treated it as a
contract to assign. When the property came into existence in such
a contract it was treated as a complete assignment. As a leading
case on this point, Holroyd v. Marshall can be cited.
(b) Agreement for a transfer: In Walsh v. Lonsdale, it was
decided that an agreement for lease could be treated as a lease
in equity.
iii) Doctrine of part performance: Under the equitable doctrine of
part performance contracts pertaining to land were allowed to be
formed by oral evidence where one of the parties did acts of pats
performance. Maddison v. Alderson is a leading case on this
point.

Recognition
Many of the doctrines of English equity have taken statutory form in
Bangladesh. Insofar as equitable assignments are concerned no
equitable estate is recognized in Bangladesh. A transfer of future
property for consideration operates as a contract to be performed in
future.
i) The Transfer of Property Act- A Contracts to sell Sultanpur to B.
While the contract is still in force, he sells Sultanpur to C, who has
notice of the contract. B may enforce the contract against C to the
same extent as against A.
ii) The Specific Relief Act- Section 12 relating to the specific
performance of part of a contract also illustrates the application of
the maxim.
iii) The Trust Act- Where a person acquires property with notice that
another person has entered into an existing contract affecting that
property, the former must hold the property for the benefit of the
latter.

9. EQUITY IMPUTES AN INTENTION TO FULFILL AN
OBLIGATION

Meaning
Equity considered and estimated acts of parties. Thus where a person
is under an obligation to do a certain act, and he does some other act
which is capable of being regarded as an act in fulfillment of his
obligation. In other words a person is presumed to do what he is
bound to do.
In Sowden v. Sowden, a husband covenanted with the trustee of his
marriage settlement to pay to them 50,000 to be laid out by them in
purchase of land in a particular area D. He, in fact, never paid the
sum, but after marriage purchased the land at D in his own name, for
50,000. He died and could not bring the land into settlement. Equity
courts construed that he purchased land to fulfill his obligation.

i) Doctrine of performance and satisfaction
ii) Ademption
iii) Doctrine of presumption of advancement
iv) Relief against defective execution of power of appointment.

i) Doctrine of performance and satisfaction- Sowden v. Sowden
and Lachmere v. Lady Lachmere cases are examples of performance.
Satisfaction is the donation of a thing with it is to be taken in
extinguishment of some prior claim of donee. This maxim is helpful
where the presumed intention of the testator is to be found out; where
the intention is express the maxim has no application.
ii) Ademption- Ademption is a transfer of property which operates as
a complete or pro tanto substitution for a gift previously made by the
will of the donor.
e.g. X by his will leaves his daughter Y one-third of his residuary
estate. Thereafter on Ys marriage X gives Y 20,000 Taka. X dies.
20,000 Taka is an ademption -complete or proportionately to the gift
of one-third share of the residuary estate of X.
iii) Presumption of advancement- When a purchase or transfer of
property without consideration is made by a father or a person in loco
parentis, to or in the name of a child, a presumption arises. And the
presumption is that it was for the benefit of the child. Such
presumption, is known as advancement. The doctrine applies to
cases of parent and child, husband and wife, of mother and child and
even to illegitimate child, but not to a man and his mistress.
iv) Relief against defective execution of power of appointment- A
power is an authority vested in a person to deal with or dispose of
property not his own. A power may be legal or equitable but after
1925 all powers of appointment are necessarily equitable.
e.g. A holds 50,000 Taka upon trust to divide among a certain class of
persons. A has no option is this matter He is bound to carry out the
trust. On his failing to do so, the court will see that the property is duly
divided.
A defective execution will always be aided in equity under the
circumstances mentioned, it being the duty of every man to pay his
debts, and a husband or a father to provide for child.

Recognition
i) The Succession Act- Presumption against satisfaction is
mentioned here. In Hasanali v. Popatal, a testator, who had a sum of
Rs 9000 as deposit from his brother, gave to is brother a legacy of Rs
9000 and it was held that the brother was entitled to both, the legacy
and his deposit. But as decided in Rajmanuar case where a will
contained a clear indication that the legacy was meant as a
Posted by Khaled Saifullah at 2:02 AM
satisfaction of the debt due to X, X could not claim both as the section
explains.
ii) The Trust Act- Where a person contracts to buy property to be
held on trust for certain beneficiaries and buys the property
accordingly, he must hold the property for their benefit to the extent
necessary to give effect to the contract. Equity thus imputes an
intention to fulfill an obligation.
The doctrine of advancement does not apply in Bangladesh.

Labels: Equity, justice, maxim
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