Introduction

Equity is a Latin word which means fairness, justice. It is a system of law originating in the
English chancery and comprising a settled and formal body of substantive and procedural rules
and doctrines that supplement, aid, or override common and statutory law.

Equity is based on a judicial assessment of fairness as opposed to the strict and rigid rule of
common law. For centuries, the common law was referred to as the law, in contrast with equity.
As to the most common criticism of equity, these words of the English jurist, John Selden (1584-
1654)[1]:

            The typical Court of Equity (also known as Court of Chancery) decision would prevent a
person from enforcing a common law court judgment. The kings delegated this special judicial
review power over common law court rulings to a judge called chancellor, the court the
Chancery. Later, this was too much work for a single judge and more judges were appointed,
called chancellors. The term Chancellor is still in use in England today and now refers to the
British minister of justice. Thus, a new branch of law developed known as equity, with their
decisions eventually gaining precedence over those of the common law[2] courts.

 Definition of equity by various jurists

1.      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.”

2.      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.”

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, from
circumstances hereafter to be noticed, omitted to be enforced by common law Courts – an
omission which was supplied by the Court of Chancery.”

 So,

Equity: ‘modification of common law: the system of jurisprudence that supplements common
and statutory law, when those bodies of law are inadequate in the attainment of justice; justice
tempered by ethics: justice applied in conformity with the law, but influenced at the same time
by principles of ethics and fair play; [and] fair claim: a claim that is judged to be just and
fair.’
An Equitable Trust: ‘position of obligation: the position of somebody who is expected by
others to behave responsibly or honorably; something in which confidence is placed:
somebody that people place confidence or faith in; law holding of another’s property: the legal
holding and managing of money or property belonging to somebody else, for example, that of
a minor; arrangement to manage another’s property;  a legal arrangement by which one
person (trustee) holds and manages money or property belonging to somebody else’[3].

Nature of Equity

The nature and scope of equity says that equity must preliminary mean right doing, or justice in
the purely ethical meaning of that word. In England equity has acquired an entirely specialized
meaning. It includes technically only certain rules which were developed in the court of
chancery. The basis for its creation may have been the desire to do right thing between men
according to the moral law of time, but it was always limited and has now become a fix body of
principles of the common law[4].

It is no longer possible to claim redress simply upon moral grounds; it is necessary to show some
principles recognized by the system of Equity before a remedy can be granted.

Firstly equity has enforced rights which the common law Courts failed to enforce; Secondly,
equity has developed additional remedies to the common law for the enforcement of common
law rights. Lastly, the procedure in the Common law Courts was defected, especially is not
compelling or even allowing a defendant to give evidence and in limiting the enquiry to the
action.[5]

So, we can say that-

 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.
 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.
 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.
 Where equities are equal, that which is first in time will prevail.

Equity as a Court of Conscience:

Principle of Equity

The principle of Equity refers to a set of rules, which neither originated from customs nor statutory
law. Equity rules were formed on the basis of dictates of conscience which had been decided in the
Courts of Chancery.

In cases, where Common Law was not applicable, the Chancellor presided over such cases in
special courts called ‘Equity Courts’. Equity courts had a separate existence from the Common Law
Courts in England. These ‘Equity Courts’ acted on a number of customs like :

1. He who seeks equity must do equity.

2. He who comes to equity must come with clean hands.

(source-myfreeschooltanzania)

 Statute Law
Statute law is that law that has been created by the legislation. A statute is a formal act of the
legislature in written form. It has also become an important source of Mercantile Law.

A statute or written overrides any unwritten laws, which are Common Law and Equity. 
Statutory laws are the basic framework of the modern legal system.   

 Other source of English Law is 

Justice, Equity, and Good Conscience

The theme of justice, equity, and good conscience first came into being through Impey’s Regulation
of 1781. In the case of absence of statutory or personal law, the Indian courts follow the decision of
a case known as ‘Justice, Equity and Good Conscience’, which in this case refers to English law as
far as it is applicable to the Indian context.

Ancient Hindu law had their own concept of ‘Justice, Equity and Good Conscience’. In its modern
version counterpart in the Indian legal system, it owes its origins to the British rule in India.

The High Courts established by the British by the British administration stated that when the law
was unclear or silent on an issue, the issue would be decided in accordance with the principles of
‘Justice, Equity and Good Conscience’.

Justice, equity and good conscience have generally been interpreted as English laws and rules that
are applied when any written law is not applicable to a legal matter. The court also uses ‘Justice,
Equity and Good Conscience’ in the absence of Hindu law in matters relating to personal laws.

EQUITY AND THE COMMON LAW

Rivalry between the Courts
The Court of Equity (or Chancery) became very popular because of its flexibility; its superior
procedures; and its more appropriate remedies.

Problems arose as to the issue of injunctions: the common law courts objected to the Chancellor
issuing injunctions restraining the parties to an action at common law either from proceeding
with it or, having obtained judgment, from entering it in cases where, in the Chancellor’s
opinion, injustice would result.

Consequently, a certain rivalry developed between the two courts and this came to a head in
the Earl of Oxford’s Case (1616) 1 Rep Ch. 1 in which the common law court gave a verdict in
favour of one party and the Court of Equity then issued an injunction to prevent that party
enforcing that judgment. The dispute was referred to the King who asked the Attorney-General
to make a ruling. It was decided that in cases of conflict between common law and equity, equity
was to prevail. From that time on the common law and equity worked together, side by side.
As equity was developing, it had no fixed rules of its own and each Chancellor gave judgement
according to his own conscience. This led to criticism about the outcome of cases and John
Selden, an eminent seventeenth century jurist, declared, “Equity varies with the length of the
Chancellor’s foot”. To combat this criticism Lord Nottingham (Lord Chancellor 1673-82) started
to introduce a more systematic approach to cases and by the nineteenth century, equity had
become as rigid as the common law. Delays were caused by an inadequate number of judges and
the officials depended on fees paid by the litigants so that there was every incentive to prolong
litigation for individual tasks and multiply these tasks.

Some attempt was made to assimilate the remedies granted by the Court of Chancery and the
common law courts. Thus under the Common Law Procedure Act 1854 the common law courts
were given some power to award equitable remedies and the Chancery Amendment Act 1858
gave the Chancellor the power to grant damages in addition to, or in substitution for, an
injunction or a decree of specific performance.

The Judicature Acts 1873-75

The Judicature Acts 1873-75 rationalised the position. They created one system of courts 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.

The Supreme Court of Judicature consists of the High Court divided into divisions known as the
Queen’s Bench Division, Chancery Division, and the Probate, Divorce and Admiralty Division
(re-named the Family Division in 1970 and the work reassigned); the Court of Appeal; and, since
the Supreme Court Act 1981, the Crown Court. Each Division exercises both legal and equitable
jurisdiction. Thus any issue can be adjudicated in any Division; and any point of law or equity
can be raised and determined in any Division; but, for the sake of administrative convenience,
cases are allocated to the Divisions according to their general subject-matter. Thus the court “is
now not a Court of Law or a Court of Equity, it is a Court of complete jurisdiction.” (Pugh v
Heath (1882), per Lord Cairns.)

It was foreseen that a court which applied the rules both of common law and of equity would
face a conflict where the common law rules would produce one result, and equity another.
Section 25 of the Judicature Act 1873 provided that if there was any conflict between these
principles, then equity was to prevail.

However, this did not fuse the principles of common law and equity, which still remain as
separate bodies of rules. “The two streams have met and still run in the same channel, but their
waters do not mix” (Maitland).

For the equitable doctrines refer the link below:

https://mcmahonsolicitors.ie/equitable-doctrines/
The maxims of Equity

 Equity will not suffer a wrong to be without a remedy

When seeking an equitable relief, the one that has been wronged has the stronger hand. The
stronger hand is the one that has the capacity to ask for a legal remedy (judicial relief). In equity,
this form of remedy is usually one of specific performance or an injunction (injunctive relief).
These are superior remedies to those administered at common law such as damages.
The Latin legal maxim is ubi jus ibi remedium ("where there is a right there must be a remedy").

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, and it is
only in a general not in a literal sense that the maxim has force.

Case law dealing with the principle of this maxim at law include Ashby v White[7] and Bivens v.
Six Unknown Named Agents. The application of this principle at law was key in the decision
of Marbury v. Madison, wherein it was necessary to establish that Marbury had a right to his
commission in the first place in order for Chief Justice Marshall to make his more wide-ranging
decision.

 Equity follows the laws

This maxim, also expressed as Aequitas sequitur legem, means more fully that "equity will not
allow a remedy that is contrary to law."

The Court of Chancery never claimed to override the courts of common law. Story states "where

a rule, either of the common or the statute law is direct, and governs the case with all its
circumstances, or the particular point, a court of equity is as much bound by it as a court of law,
and can as little justify a departure from it." According to Edmund Henry Turner Snell, “It is
only when there is some important circumstance disregarded by the common law rules that
equity interferes.” Cardozo wrote in his dissent in Graf v. Hope Building Corporation, 254 N.Y
1 at 9 (1930), "Equity works as a supplement for law and does not supersede the prevailing law."

Maitland says, “We ought not to think of common law and equity as of two rival
systems." "Equity had come not to destroy the law, but to fulfil it. Every jot and every title of law
was to be obeyed, but when all this had been done yet something might be needful, something
that equity would require."The goal of law and equity was the same but due to historical reasons
they chose a different path. Equity respected every word of law and every right at law but where
the law was defective, in those cases, equity provides equitable right and remedies.

In modern-day England and Wales, this maxim no longer applies; as per section 49(1) of
the Senior Courts Act 1981, the law follows equity instead:
Subject to the provisions of this or any other Act, every court exercising jurisdiction in England
or Wales in any civil cause or matter shall continue to administer law and equity on the basis
that, wherever there is any conflict or variance between the rules of equity and the rules of the
common law with reference to the same matter, the rules of equity shall prevail.

 Where equities are equal, the law will prevail

Equity will provide no specific remedies where the parties' causes are to be seen to be equal, or
where neither has been wronged.

The significance of this maxim is that applicants to the chancellors often did so because of the
formal pleading of the law courts, and the lack of flexibility they offered to litigants. Law courts
and legislature, as lawmakers, through the limits of the substantive law they had created, thus
inculcated a certain status quo that affected private conduct, and private ordering of disputes.
Equity could alter that status quo, ignoring the clearly imposed limits of legal relief, or legal
defences. But courts applying equity are reluctant to do so. This maxim reflects this. If the law
firmly denied a cause of action or suggested equities between the parties were as a matter of
policy equal, equity would provide no relief; if the law did provide relief, then the applicant
would be obligated to bring a legal, rather than equitable action. This maxim overlaps with the
previously mentioned "equity follows the law."

 WHERE EQUITIES ARE EQUAL FIRST IN TIME SHALL PREVAIL

INTRODUCTION:
The related maxim is concerned with priorities of competing interests, that is to say which of
various interests prevails in the events of a conflict, may be dealt with together. To understand
this maxim, a distinction and understanding of the concept of “legal interest or estate” and
“equitable interest” is necessary.

LEGAL INTEREST:
A legal interest or estate is an interest in the property required by a purchaser for valuable
consideration either by cash or marriage consideration. It also includes mortgagee and lessee.

EQUITABLE INTEREST:
An equitable interest is any interest which recognized from the Chancery court. An example
would be in the case of trust; although the trustee’s name would be registered as the holder of the
property, the beneficiaries acquire an equitable interest over the trustee’s property. They have a
right to sue the trustee for breach of trust.

GENERAL RULE:
Under general rule, the interest takes effect in order of their creation. FOR INSTANCE, whose
rights are created first will receive priority in the court of equity. However, an equitable interest
might be defeated by a legal interest, even though it has been created prior to the legal interest.
For example, if the purchaser of a legal interest is bona fide and without notice of any equitable
interest, then the equities are equal and legal interest prevails.

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

APPLICATION:
1:This maxim operates where there are two or more competing interests,provided both the
interests are equitable.

2: When two parties each have a right to possess something, then the one who acquired an
interest first should prevail in equity.

ILLUSTRATION:
For example, a man advertises a small boat for sale in the classified section of the newspaper.
The first person to see the ad offers him $20 less than the asking price, but the man accepts it.
That person says he or she will pick up the boat and pay for it on Saturday. Meanwhile another
person comes by, offers the man more money, and the man takes it. Who owns the boat?
Contract law and equity agree that the first buyer gets the boat, and the second buyer gets his or
her money back.

For more clarity refer the link below:

https://www.slideshare.net/AhmadFarouqAmir/maxims?next_slideshow=12621282