HISTORY OF EQUITY

 No real way to define equity, there is no neat definition for it, but don’t really have to
fully define it
 It is actually a system of law and it runs alongside the common law
 Started off in a discretionary fashion and over time has established its own system of
rules
 Equity has developed over a long period of time, didn’t start off clean but it has
grown from this and that and has become interwoven.
 In the early years before 1066, after the Norman Conquest, justice continued to be
dispensed by local courts on the basis of local custom. Later, in the twelfth century,
royal justice developed bringing into being a ‘common law’, which applied
throughout the kingdom and the subsequent emergence of ‘equity’ and its relationship
to the common law.
 Later it was in 1066 AD (12th C) when, particularly under Henry II, Royal Courts
began to emerge from the King's Council (Curia Regis) bringing into being a
‘common law’, which applied throughout the kingdom. During this period the King
send judges around the country to hold sittings to hear cases locally. This enabled the
judges to take the best local laws and apply them throughout the land, thus creating
law which was `common to the whole country ie, common law.
 Henry II created the courts of the King’s Bench to hear matters otherwise brought
before the Crown. That is why the common law is oft-described as developed and
administered in royal courts. There remained, however, a right to petition the King
directly if it was thought that the decision of the common law court was unfair or
unjust.
 In the medieval period, the King delegated his power to hear petition and created the
position of the Lord Chancellor who was a Bishop (Church), to hear those petitions
which would otherwise have been taken directly to the monarch. He was empowered
to issue royal writs on behalf of the Crown, but gradually acquired power to hear
petitions directly during the 13thand 14th centuries.
 The power of inventing new writs to meet the changing needs of the society was
criticized in the latter half of the 13th century when the Parliament realized that the
Chancellor’s power challenged its power to legislate indirectly. This was how rigidity
set in to the common law.
 After the Provisions of Oxford of 1258 stopped the issue of writs to cover new forms
of action without the consent of the King in Council, the problem of common law lay
where a plaintiff might have had a common law remedy but he was prevented from
enforcing it because of the power or influence of the other party to the case. Again,
the plaintiff might be victim of the corruption of the jury which heard the case. In fact,
the common law was preoccupied with formality.
 In the Earl of Oxford’s Case (1615) the Court of Chancery issued a common
injunction prohibiting the enforcement of a common law order. The matter was
 referred to the Attorney General Sir Francis Bacon when no resolution could be
reached between the 2 courts. Sir Francis upheld the common injunction and stated
that ‘in the event of any conflict between the common law and the law of equity, equity
would prevail’.
 Thus the role of equity was established by the decision in the Earl of Oxford’s Case
and in the 14th century that a distinct body of law known as equity was developed
which was evolved as a “gloss” on the common law. It was during this period only
that the court of Chancery came into being in any real sense which acquired power to
hear petitions directly instead of only issuing writs on behalf of the crown.
 Equity might provide a remedy where the common law provided none or might also
intervene to ensure that the available common law remedy was actually enforceable.
In other words, equity worked alongside the common law and provided different
solutions to problems.
 In 1675 Lord Nottingham was appointed as the Chancellor who marked the start of
the systemization of equity and set down the principles upon which equity operated.
Lord Nottingham was described as the father of equity.
 By the 17th century only lawyers were appointed to the office of Chancellor. From
1529 onwards when Sir Thomas Moore was appointed as Chancellor records of
proceedings in Courts of Chancery were kept which led to the development of
equitable doctrines and the judges began to use previous decisions as a guide for later
cases. This was the beginning of the doctrine of precedent. Prior to his appointment
no such records were kept and decisions made by the Chancellors were discretionary
and erratic.
 By the beginning of the 19th century the Court of Chancery had become a court of
equity.

Amalgamation of Equity and Common Law

 During the 17th to 19th centuries the fundamental principles of equity were developed
and followed in the court of chancery by way of precedent.
 However the common law and equity continued to be administered by separate courts
and litigants who had commenced their claim in the wrong jurisdiction were forced to
start again in the other.
 The cost and time implications of this duality led to the enactment of the Judicature
Act 1873 which fused the administration of the common law and equity.
 This Act created one system of court by amalgamating the common law courts and
the court of equity to form the supreme court of judicature which would administer
common law and equity.
 It abolished the old court system and replaced it with a new High Court of Justice
which was vested with the entire jurisdiction previously exercised by the separate
courts. There was one code of procedure for all claims and the ascendancy of equity
in any situation of conflict with the common law

India
In India the common law doctrine of equity had traditionally been followed even after it
became independent in 1947. However, in 1963 the "Specific Relief Act" was passed by
the Parliament of India following the recommendation of the Law Commission of India and
repealing the earlier "Specific Relief Act" of 1877. Under the 1963 Act, most equitable
concepts were codified and made statutory rights, thereby ending the discretionary role of the
courts to grant equitable reliefs. The rights codified under the 1963 Act were as under:

 Recovery of possession of immovable property (ss. 5–8)

 Specific performance of contracts (ss. 9–25)
 Rectification of Instruments (s. 26)
 Recession of Contracts (ss. 27–30)
 Cancellation of Instruments (ss. 31–33)
 Declaratory Decrees (ss. 34–35)
 Injunctions (ss. 36–42)

With this codification, the nature and tenure of the equitable reliefs available earlier have
been modified to make them statutory rights and are also required to be pleaded specifically
to be enforced. Further to the extent that these equitable reliefs have been codified into rights,
they are no longer discretionary upon the courts but instead are enforceable rights subject to
the conditions under the 1963 Act being satisfied. Nonetheless, in the event of situations not
covered under the 1963 Act, the courts in India continue to exercise their inherent powers in
terms of Section 151 of the Code of Civil Procedure, 1908, which applies to all civil courts in
India. There is no such inherent power with the criminal courts in India except with the High
Courts in terms of Section 482 of the Code of Criminal Procedure, 1973. Further, such
inherent powers are vested in the Supreme Court of India in terms of Article 142 of
the Constitution of India which confers wide powers on the Supreme Court to pass orders "as
is necessary for doing complete justice in any cause of matter pending before it".

CLASSIFICATION OF EQUITY JURISDICTION

Three types of jurisdiction:

1. Exclusive jurisdiction: Creation of New Rights

- It comprises of matters in which a court of equity alone had jurisdiction to grant
relief. This was in form of creation of new rights which could be declared by
courts of equity.
- The exclusive jurisdiction of equity was that jurisdiction that only courts of equity
and not common law courts could exercise.
- The jurisdiction was exclusive because only chancery recognized it, the common
law did not provide such relief for such rights.
 - For example, rights of persons claiming under uses and trusts as under common
law trustees were the owners of the trust so beneficiaries were at loss while under
equity law beneficiaries were made the owner of the trust property ,
- Example: rights of a married woman in relation to property for her separate use,
mortgages, right of redemption of a mortgage etc whereas under common law
women had limited right over the property.
- Exclusive jurisdiction could be divided in to two categories:
(i) The first aspect was that which depended on the subject matter as in the case
of trusts and
(ii) Second the one which depended on the type of remedy which was to be
administered examples being equitable reliefs against penalties disguised as
liquidated damages for instance in hire purchase contracts and the moderation
by equity of provisions in tenancy or lease agreements relating to forfeitures
for breaches of renditions or covenants.
2. Concurrent jurisdiction: Creation of new Remedies
- Concurrent jurisdiction is also a creation of equity which is the jurisdiction
exercised in equity where similar if not identical relief might be available in
common law. Concurrent jurisdiction can as well be known as creation of new
remedies.
- Cases in which both the both the courts of equity and the courts of common law
have jurisdiction. The plaintiff has his option, he could proceed either at the
common law courts or at the chancery court.
- When equity provides as would have been issued at common law. That was
concurrent jurisdiction. But the method and manner of equity was more effective
than common law courts.
- A situation where common law courts were unable to give adequate relief since it
had to go accordingly to the rights and cannot go beyond rights then in such case
equity provide relief. That is, in circumstances where a person failed to establish a
right in damages in common law, he would suffer an injustice to that extent. This
called for creation of new remedies under concurrent jurisdiction.
- Example- cases where damages are not enough for breach of contract and the
plaintiff wants specific performance. Concept of Specific Relief Act is based on
the principle of equity. – creation of new remedies.
3. Auxiliary Jurisdiction: Creation of new procedures
- Sought of assistance provide by the equity court to common law court
- Equity under auxiliary jurisdiction was exercised in order to assist the defective
procedure at common law with a view to common law courts giving better and
effective justice.
- It led to the development of new procedures including the administration of
interrogatories and discovery of documents.
- In these cases equity was unable to provide any actual relief. But it could only
grant aid in the enforcement of the right.
- For example, representative suits, inter-pleader suit - the Court of Chancery did
not itself adjudicate upon the validity of plaintiff’s claim. The adjudication was
 made by the common law courts. But Chancery Court could help common law
court before the adjudication.

MAXIMS OF EQUITY

1. EQUITY WILL NOT SUFFER A WRONG WITHOUT A REMEDY

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.’

This maxim is the foundation of equity jurisdiction – it covers all the three equity jurisdiction.

Conditions to be satisfied:

 Rights sought by the party must be recognised by the rules of equity, i.e., it must
come within the ambit of equity.
 Must be recognised by the general law though adequate remedy may not be available.
 The remedy provided under general law is inadequate.

Limitation
This maxis does not apply where
 There is a breach of a purely moral right only.
 The right and remedy both were in within the jurisdiction of the Common Law Courts or
is not capable of being judicially enforced
 Where due to his own negligence a party either destroyed or allowed to be destroyed the
evidence in his own favour or waived his right to an equitable remedy.

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.

Recognition
 The Trust Act
 Section 9 of CPC- entitles a civil court to entertain all kinds of suits unless they are
prohibited.
 The Specific Relief Act- provides for equitable remedies like specific performance of
contracts, injunction, declaratory suits.
 2. ONE WHO SEEKS EQUITY MUST DO EQUITY

The maxim means that to obtain an equitable relief the plaintiff must himself be prepared to
do ‘equity’ or to fulfil his obligation towards the defendant, that is, a plaintiff must recognize
and submit to the right of his adversary.

Applicable to equitable rights only and not to legal rights.

Application and cases

This maxim has application in the following doctrines-

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 B’s property to 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 cannot 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 him
to exercise his equitable right to redeem one mortgage unless the other is redeemed.
Though the right of consolidation still exists in England but it can exist only by express
reservation in one of the mortgage deeds (after the enactment of Law of Property Act,
1925)
IV. Wife’s equity to a settlement: There was a time when woman’s 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 husband’s
property.
V. 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.
VI. 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 cannot be allowed to take
advantage of his own wrong.
VII. 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
 The demand for an equitable relief must arise from a suit that is pending.
 This maxim is applicable to a party who seeks an equitable relief.

Recognition
 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.
 sec 35 of the Transfer of Property Act embodies the principle of election.
 Sec 51 and 54 of the Transfer of Property Act.
 In Order 8, Rule 6 of the CPC, the doctrine of Set-off is recognized.

3. ONE WHO SEEKS EQUITY MUST COME WITH CLEAN HANDS

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.
- Relates to the conduct of the party in suit – he who has committed inequity shall
not have equity – he must not be guilty of misconduct in the proceeding w.r.t the
same transaction.

Application and cases

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 cannot setup a defence of the invalidity of
the receipt given by him.
ii) Section 17, 18 and 20 of the Specific Relief Act, 1877- Plaintiff’s unfair conduct will
disentitle him to an equitable relief of specific performance of the contract.

Distinction between maxim no. 2 and 3-

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 andi) It is applicable when the defendant has no
the defendant have claims of equitable separate claim to relief and the plaintiff’s
relief against each other. conduct is unfair.
ii) It exposes the condition subsequent to theii) It is a condition precedent to seeking
relief sought. equitable relief.
iii) It refers to the plaintiff’s conduct as theiii) It refers to the plaitiff’s conduct before
court thinks it ought to be, after he comes he approaches the court.
to the court.
iv) The plaintiff has to mould his behavioriv) If the plaintiff’s conduct is unfair, it would
according to the impositions by the court. not entitle him to the relief sought.
v) The plaintiff has an option or a choicev) The conduct of the plaintiff snatched his
before him either to submit to the choice from him. His equitable right
conditions put by the court, or to get out of therefore neither be recognized nor
the court. enforced.
vi) This maxim looks to the future. vi) This maxim looks at the past.

4. EQUITY FOLLOWS THE LAW

The maxim indicates the discipline which the Chancery Courts observed while administering
justice according to conscience. 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 is not contrary or overrides courts of common law, rather it
is supplementary to common law.
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.”

Application and cases

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

5. DELAY DEFEATS EQUITIES

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.

Application and cases

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- Plaintiff’s unreasonable delay is a weapon of defence by the defendant

against the plaintiff.

Example - 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.

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 under 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 468 of Code of Criminal Procedure: Bar to taking cognizance after lapse of the
period of limitation.
Section 5 of Indian limitation Act 1963 : Extension of prescribed period in certain cases

6. EQUALITY IS EQUITY

This maxim is 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.
Equality regards and maintains the rights of all who are linked by any common bond of
interest or obligation.
Rights and obligation should be equalised among all the parties
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 and cases

Application of this maxim can be understood from the following: - class notes
o Equity’s dislike for joint tenancy and presumption of tenancy-in-common
o Equal distribution of joint funds and joint purchases
o Contribution between co-trustees, co-sureties and co-contractors
o Ratable distribution of legacies
o Marshalling of assets

7. EQUITY LOOKS TO THE INTENT RATHER THAN THE FORM

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
always regards substance rather than structure. It looks to the spirit not to the letter of the law,
it looks to the intention of parties and not to the words.

Application and cases

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-
o Relief against penalties and forfeitures
o Relief in regard to precatory trust
o Relief in regard to mortgages, the doctrine of equity of redemption and the
doctrine of clogs on redemptions
o 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. IN SUCH
CASES, equity courts determine whether the person had the intention to create trust or not.

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 mortgagor’s 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
o 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.
o Section 74 of the Contract Act- only a reasonable compensation can be claimed.
o 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

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.

Application and cases

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-
 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.
 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
A transfer of future property for consideration operates as a contract to be performed in future.
 The Transfer of Property Act- section 40 – illustration- 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.
 The Specific Relief Act- Section 12 relating to the specific performance of part of a
contract also illustrates the application of the maxim.
 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.
 Section 11 of CPC – Explanation 4 – Constructive Res Judicata

9. EQUITY IMPUTES AN INTENTION TO FULFILL AN OBLIGATION

Equity considered 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 not exactly of the kind agreed to be done
but that act resembles an act agreed to be done and is capable of being regarded as an act in
fulfillment of his obligation, then it can be taken to mean that he had intention to satisfy his
obligation.
e.g. A promise to marry Band that he will buy a property in B’s name after the marriage to
B’s parents. After the marriage, though A bought the property but he bought it in his own
name. In such case Equity will impute that property is in the name of B.
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.
e.g. A makes a will and distributes property between X,Y and Z. A has taken 50 lacs loan
from X before the will. Equity will impute that portion of property given to X in will is
against settlement of the loan.

Application and cases

i) Doctrine of performance and satisfaction
ii) Ademption
iii) Doctrine of presumption of advancement

i) Doctrine of performance and satisfaction- 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 Y’s
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.

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 his 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 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.

10. WHERE EQUITIES ARE EQUAL LAW MUST PREVAIL

Where the rights of both parties are the same, the party with the right in law has priority.

This maxim means that “when the conflicting interests of two or more parties are supported
by equitable pleas of equal value, equity being unable to prefer one to the other would allow
the conflicting equities to cancel out and leave law to take its course”. It means the parties
will litigate in a Court of Law where the only legal estate alone will apply.

Where the defendant has an equal claim to the protection of a Court of Equity for his title as
the plaintiff has to the assistance of the Court to assert his title, the Court will not interpose
(introduce, interrupt) on either side, but will leave the matter as it stands.

The equity is equal between persons who have been equally innocent and equally diligent.
This doctrine applies, strictly in all cases, where the title of the plaintiff seeking relief is
equitable. The purchaser, however, in all cases, must hold a legal title in order to give him
full protection of his defence. He must have paid the purchase money before notice,
otherwise he will not be protected.

A legal right is enforceable against any person who takes the property, whether he has notice
of it or not.

For instance, if A sells to C land, over which B has a right of way, C takes the land subject to
B’s right, although he was ignorant of the right at the time of purchase. But the rule is
different as regards equitable rights. It is well established rule that a purchase for valuable
consideration without notice of prior equitable right, obtaining the legal estate at the time of
his purchase, is entitled to priority in equity as well as at law. In such a case equity follows
the law, the purchaser’s conscience not being in any was affected by the equity.

Where one thing follows two claimants on the base of equal equity, equity shall follow the
law and legal right shall be preceded. Law provides relief to those who claims on the base of
legal right.

According to this maxim if legal right is equal to equitable rights, legal right shall remain
there.

Application: This maxim has certain applications such as:

 Dispute in transfer of property: When both the contestants are equally entitled to
obtain help from courts of equity (because their equities are equal), the party who has
law in his favour will succeed.
For example, A agrees with B to sell his property for Rs. 5,000/-. Therefore in breach
of the above agreement, A sells the property to C for Rs. 6,000/- and making a
document hands over the possession of the property to C. As a result of the agreement
B did not get any legal interest in the property. B has only an equitable interest in his
favour binding A conscience. C, on the contrary, as a result of his agreement with A,
gets the legal interest and has executed a document and obtained possession of the
property. B’s interest is an equitable with law in his favour. Naturally, therefore, in a
conflict between B and C, C has superior interest as compared to that of B. Thus
 equitable interest is not as strong as a legal interest and so, according to the maxim the
law shall prevail.
It may be noted that the doctrine of Election, Marshalling, and Set Off are based on
the maxim.
 In contradiction of legal and equitable right: This maxim is used where equitable
and legal rights conflict and precedence go to legal right. Equities must be equal by
there should be conflict of legal and equitable rights. It does not apply where priority
of time in case of equity is determinant factor in relief.
 Transfer of property cases:

S. 78 of Transfer of Property Act is based on this maxim. It enacts that “where though 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, the prior mortgagee
shall be postponed to the subsequent mortgagee.”

S. 53 of Transfer of Property Act is also based upon this maxim. It enacts that “every transfer
of immovable property made with intent to defeat or delay the creditors of the transferor shall
be void-able at the option of any creditor so defeated or delayed.”

e.g. - X being heavily indebted tries to dispose of his immovable property and converts it into
cash in order to defeat his creditors. Y being aware of all these facts, purchased such property
from X. The sale is void-able at the option of the creditors so defeated. If however, Y is not
aware of the above circumstances and purchases the property in good faith, the sale would
not be void-able. But if Y takes the property by way of gift, without paying any consideration
for the same, the sale shall be void-able at the instance of the creditors regardless of the fact
whether Y had or had not any notice of the intention of X to defraud his creditors.

Exception: This maxim has two exceptions as follows:

 Prior equitable and subsequent legal right: Where interest in legal property comes
subsequently, cannot attain precedence. Person, who acquires equitable right in the
presence of legal right, he procures breach of duty.
 Equal equities without legal right: Where there are equal equities but legal right lacks,
this maxim shall not apply.

11. WHERE THE EQUITIES ARE EQUAL, THE FIRST IN TIME SHALL
PREVAIL (QUI PRIOR EST TEMPORE, POTOIR EST JURE)

Where the rights of parties in the court of equities are same.

Where equities are equal, in the absence of any other factors that determines the rights
between the parties, the first in time has priority.

This maxim is only applicable where equities are equal. It cannot be used against a bona fide
purchaser for value without notice of a prior interest.
CLASS NOTES

12. EQUITY ACTS IN PERSONAM

Where there is violation or infringement of right, in remedial system of justice, aggrieved

party is required to initiate proceeding, by means of writ, for redressal. This is obligatory on
the part of aggrieved party. Where there is violation and government takes action, it is called
act in rem. In personam, courts issue orders to the person who commits default, i.e.,
defendant.

This maxims shows the difference between the procedure at equity and common law. The
enforcement at common law is through the writ of execution whereas the Chancery court has
jurisdiction over the defendant personally – and the order of the court of equity is directed on
the person personally such that the failure to comply is a contempt of court punishable by
imprisonment. Claims at common law are a claim in rem whereas the claim at equity is in
personam.

Application:

 Summon, service of: It is a call of Court for the presence of person who may be
either defendant or witness. He also may be an expert. Court also may call any other
person despite the original one. If the required person is government official, he may
nominate other person in his place. If the government official is absent, any other
suitable person from his office may be called for evidence to present record. However
third person that is irrelevant cannot be called.
 Declaration: Where there is refusal to accept right of person, Court may issue
declaratory decree to accept his right and may enforce it against defendant.
 Injunction: It is a stay order against defaulter and also called preventive relief. Court
may refuse to issue injunction if the person applied has no interest. However if his
own conduct is defective then again Court may refuses to issue injunction.
 Place of suing of suit: A Case may be initiated or proceeded in two places where the
defendant resides or where the property is situated. It relates to territorial jurisdiction
of Court.

Execution of decree: Decree is always executed on defendant in personam.

Limitation:

 Does not apply to Criminal and tortuous acts.

 Apply only to equitable rights/remedies
 Apply only to those matter where defendant subjected to some obligation arising from
his own acts
 Defendant should be within the jurisdiction of the court or it could be possible to issue
the process of the court upon the defendant

Recognition
 CPC – Section 16

Case: Penn v. Lord Baltimoss – Class notes