MAXIMS OF EQUITY

The maxims of Equity are guidelines of the jurisdiction of Equity that have evolved over time.
Rather than being rigid formulas for applying equitable rules, they should be viewed as a collection
of general principles that can be tailored to the specifics of each case. The maxims represent the
general principles that have been established throughout the history and practice of the courts of
Chancery administering equitable jurisdiction. Maxims overlap and should not be considered in
isolation as they do not cover the whole of the ground.

Although maxims are principles of positive laws and may not provide particular solutions to
particular legal issues, they have a role and significance in the current jurisprudence of Equity.
Maxims serve to symbolise, reflect, and disseminate some of the core and essential moral concepts
and ideas that form the basis of equitable jurisdiction. Maxims of Equity are used for two major
purposes:

(i) to illustrate how equitable procedures and rules have evolved historically; and
(ii) to provide direction for how those rules should be used both now and in the future.

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

This maxim is the basis and source of all equitable jurisdiction. The maxim states that if the
Common Law fails to recognise a right or give a remedy for a wrong, Equity will not stand by
and watch a party suffer unjustly, but will grant a remedy if it is suitable for judicial execution
or enforcement. This maxim serves as the foundation for the entire field of Equity, given that
the Court of Chancery was established as a result of the common law courts' inability to address
numerous injustices or right many wrongs. However, this maxim does not imply that equity will
remedy every moral wrong. The operation of the maxim is usually in relation to the three types
of equitable jurisdictions:
(a) Original Jurisdiction in Trusts
At common law, the trustee was the absolute owner of the trust property and could do whatever
he wanted with it; the beneficiaries' rights were not acknowledged. Viewing this as an injustice,
however, Equity compelled the trustee to hold the property for the benefit of the beneficiaries,
whose rights equity enforced against the trustee as well as against any subsequent transferee who
received notice of the trust.
 (b) Concurrent Jurisdiction of equitable remedies
Damages were the only remedy for a breach of contract under common law. Where this remedy
would be insufficient for the plaintiff (e.g. in the case of breach of a contract for the sale of land),
equity would grant specific performance, thus compelling the defendant to fulfil the terms of the
contract. Similarly, where damages would not be sufficient redress for a tort (e.g. nuisance),
equity would grant an injunction to prevent further invasion of the plaintiff’s rights.
(c) Auxiliary Jurisdiction of equitable procedure
The Court of Chancery was able to compel the production of documents held by a party to an
action, something that the common law courts lacked the power to do. Without this power,
several injustices would have remained without remedy. Another example of the maxim is
equitable execution. Equitable execution is another instance of the maxim in action. Under
common law, the judgment debtor's property, in which the latter had only an equitable interest,
could not be subject to execution by the judgment creditor. At common law, for example, an
equity of redemption or a beneficial interest in a trust could not be disturbed. But, the Court of
Chancery has the authority to appoint a receiver for the equitable interest and, in the event that
it becomes necessary, issue an injunction to prevent the judgment debtor from disposing of his
interest. See the following cases: Alaka v. Alaka (1904) 1 NLR 55; Martins v. Martins (1940)
15 NLR 126; Pinnock v. G.B.O. Ltd (1934) 2 WACA 164; Lyell V. Kennedy (1883) 8 App.
Cas. 217; Seddon v. Commercial Salt Co.Lts (1925) Ch. 187.

It should be noted that the application of the maxim is limited by what is realistic, practicable
and convenient for the court.

2. EQUITY FOLLOWS THE LAW

Equity does not exist outside of the law; it does not challenge or contradict legal principles.
Except in limited circumstances, equity will not deviate from statutory provisions. In fact,
without the common law, Equity could not have been in existence. This is because the
Chancellor initially only intervened to maintain fairness between the parties in cases where the
common law failed to provide a remedy. It was after some time that Equity evolved into a unique
body of rules and principles. The purpose of creating equity is not to upset or overthrow common
law standards. Rather, equity exists to supplement and enhance common law rules and, in some
cases, to reduce the harshness of common law rules.

Kayode Eso declared in the case of Trans Bridge Co. ltd v, Survey International Ltd [1986] 4
NWLR (Pt. 37) 576, that equity does not exist in vacuo. Definitely, most principles of Equity
would be meaningless and have no significance if separated from the rules of common law they
are supposed to supplement. The maxim is used in regard to the allocation of assets between
parties. Equity assumes that an equal distribution is to be preferred until there is a clear statement
to the contrary. Equity therefore adheres to common law principles, including those pertaining
to joint tenancies and errors in contract formation, while supplementing these with equitable
remedies.

Another example is the beneficiaries under a trust as the equitable owners of the property. Equity
never contested the trustee's legal title and, as a result, stops short of enforcing the trust against
a bona fide purchase of the legal estate from the trustee without notice of the trust, thereby
recognising the paramountcy of the legal estate. As a result, equitable interests in land
correspond to legal estate and interest. Also, Equity recognised some future interests that were
not recognised by law. The principle that a third party cannot be forced to complete a contract
is another instance of how equity does not deviate from common law. However, Equity declined
to abide by Common Law rules in cases where they were outdated or unduly strict. Or, as in the
case of Achibong v. Duke, equity will seek to stop the wrongful application of the law. As a
result, the technical rules governing legal contingent remainders were never applied to equitable
interests, and there was no escheat of equitable interest on intestacy.

3. WHERE THERE IS EQUAL EQUITY, THE LAW SHALL PREVAIL

This maxim covers the situation in which there are competing interests in property, one of which
is legal and the other equitable. Where both parties’ claims are equally legitimate, fair and
meritorious, the legal interest will take precedence. For example:
Ayeni obtains an equitable charge over Mango Island (worth N4million) as security for a loan
of N1.5 million. Babayari later acquires a legal mortgage on Mango Island (still worth
N4million), to finance a N1.5 million loan. When Babayari lent the money, he was unaware of
Ayeni's equitable charge; and the value of Mango Island has now reduced to N2 million. In this
case, Babayari is entitled to the full repayment of his loan (N1.5 million) from the proceeds of
the sale of Mango Island. Because Babayari's legal estate takes precedence over A's equitable
interest, Ayeni must settle for the remaining N500,000.00. If, on the other hand, Babayari was
aware of Ayeni's equitable charge before lending the money, Babayari would not have priority
over Ayeni, and the position would be reversed because there would not be equal equity. Equity
will not permit Ayeni, the innocent party, to have her interests defeated by Babayari's negligence
or imprudence in lending the money while knowing there was a prior charge on the property.

4. WHERE THE EQUITIES ARE EQUAL, THE FIRST IN TIME PREVAILS

This maxim controls the priority of competing equitable claims to the same property and can
also be phrased as "he who is earlier in time is stronger in law." Generally, equitable interests
are often ranked in the order in which they were created, with the period of acquisition serving
as the determining factor as to which one gets priority. The Supreme Court held in Ejuetami v.
Olaiya (2002) 1 SCM 87 at 109 that estates and interests mostly rank in the sequence of creation
both at law and in equity.

The case of Cave v. Cave (1880) 15 Ch. D. 639 exemplifies this perfectly. In the case, a sole
trustee in breach of trust purchased land with trust funds and had the land conveyed to his
brother. The land was then mortgaged by the brother to A via legal mortgage and then to B via
equitable mortgage. The trust was unknown to either A or B. It was decided that:

(i) A’s legal mortgage took priority over the equitable interests of the Beneficiaries
(“where there is equal equity the law shall prevail ”), but
(ii) The interests of the beneficiaries had priority over B’s mortgage, since they were
earlier in time (“where the equities are equal, the first in time prevails”).
However, there are times when the equities are not equal. For example, if the holder of the earlier
equitable interest commits fraud or gross negligence, his equitable interest will be transferred to
a later equitable incumbrancer. In Rice v Rice (1854) 2 Drew. 73, a vendor sold land signed a
conveyance that included a receipt for the money to the purchaser without receiving the purchase
money. The vendor's equitable lien for the unpaid purchase money was transferred to a
subsequent equitable mortgagee with whom the purchaser had lodged the title deeds, as the
mortgagee had no notice of the lien.
 The maxim does not apply where there are successive assignments or mortgages of an equitable
interest in pure personalty; for under the rule in Dearle v. Hall (1828) 3 Russ.1, Under this rule,
priority is determined not by the order in which the assignments were created, but by the order
in which the successive assignees gave notice of their assignments to the debtor, trustee or other
person liable to pay.

5. HE WHO SEEKS EQUITY MUST DO EQUITY

This maxim states that a plaintiff seeking an equitable remedy or seeking equitable redress must
be willing to act fairly towards the defendant. This is also known as the "unquestionable justice
rule." This maxim focuses on the claimant's future behaviour, as he will not be awarded an
equitable remedy unless he is willing to fulfil his equitable obligations relating to the dispute at
hand. In the case of Lodge v. National Union Investment Co. (1907) 1 Ch. 300, Lodge
borrowed money from National Union Investment Co (Ltd.), a moneylender and mortgaged
certain securities to him. Because the company was not registered under the English
Moneylenders Act 1900, the contract was illegal and void. When Lodge sued the company to
recover the securities, it was held that an order for delivery up would only be made if Lodge was
willing to "do equity" by repaying the loan amount. Also in the case of Brown v. Adebanjo, SC
132/1986 [1990] NGSC 77, the plaintiff was barred from suing the defendant for trespass after
agreeing to collect compensation.

This maxim applies to the doctrines of election and consolidation. Under the doctrine of election,
a person cannot reject an obligation imposed by a document while yet claiming a benefit under
it. Consolidation is the right of a person in whom two or more mortgages are vested to refuse
redemption of one mortgage unless the other(s) is also redeemed. For example: Remi has made
two loans of N2 million each to Sade, the first loan being secured by a mortgage of Mango Island
(worth N3 million). The second by a mortgage of Pawpaw Island (also worth N3 million). It
would be unfair to allow Sade to redeem Pawpaw Island while leaving Mango Island
unredeemed if the value of Mango Island subsequently reduced to N1 million and Pawpaw
Island grew to N5 million. Thus, Equity will allow Remi to consolidate and will not allow Sade
to redeem Pawpaw Island unless he is also willing to redeem Mango Island.
This rule applies to notice to redeem a mortgage as well as to illegal loans, as demonstrated by
the previously mentioned case of Lodge v. National Union Investment Co. (1907) 1 Ch. 300.
A mortgagor must provide the mortgagee adequate notice of his intention to redeem before he
can use his equitable right to redeem.

6. HE WHO COMES TO EQUITY MUST COME WITH CLEAN HANDS

This maxim states that a claimant must demonstrate that his prior behaviour in the transaction
has been lawful, honest, and fair; in contrast to the previous maxim, which stated that the claimant
must be willing to do what is right. Thus, he who has committed iniquity shall not have equity.
For example, in Awojugbagbe Light Industries Ltd. v. P. N. Chinukwe & Anor. [1995] 4
NWLR (Pt. 390) 379, the appellant was given a loan of N215,000.00 by the second respondent.
The Mortgage Deed, also known as the Loan and Mortgage Agreement, contained the terms and
conditions of the loan. Long before the Mortgage Deed was executed, the loan was negotiated
and granted, even though the governor's approval was still pending. Meanwhile, Section 22 of
the Land Use Act provides that the governor's consent must be obtained before the holder of a
statutory right of occupancy granted by the governor may alienate all or part of that right through
assignment, mortgage, transfer of possession, sublease, or any other method. The Deed was,
however, duly executed after the Governor had given his consent.

Consequently, the appellant instituted this suit in the High Court of Oyo State claiming among
other things, a declaration that the loan and Mortgage Deed between the plaintiff and the second
defendant are invalid, unenforceable, illegal, and null and void due to their failure to comply with
the terms of the consent that is annexed to the Deed. The appellant also argued that the second
defendant is unable to exercise its statutory right to the above without first complying with the
provisions of the Land Use Act 1978. The Supreme Court held that it is inequitable and morally
despicable for the appellant to claim that the agreement is void after getting a loan and using it.
See also: Alhaji Ferdinard Ibekwe v. Mrs Lucy Maduka [1995] 4 NWLR (Pt. 392) 716.
 7. DELAY DEFEATS EQUITIES OR EQUITY AIDS THE VIGILANT AND NOT THE
INDOLENT

It is a general principle of equity that a person will not be granted an equitable remedy if he has
been guilty of undue delay in bringing his action. Such delay is known as “laches”. A court of
equity "has consistently declined to assist stale demands, where a party has slept upon his right
and acquiesced for a long time.” Only conscience, good faith, and reasonable diligence can spur
this court to action; in the absence of these, the court remains inactive.

This means that a defendant can effectively contest an equitable claim if it can be demonstrated
that the claimant has acquiesced or stood by and allowed the defendant to unknowingly, alter his
position to his detriment in reasonable reliance of the claimant’s acceptance of the status quo. In
Nwakobi v. Nzekwu (1964) 1 WLR 1019, the Privy Council stated that where it would be
practically unjust to grant a remedy, either because the party has, by his conduct, done that which
might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he
has though perhaps not waving that remedy, yet put the other party in a situation in which it would
not be reasonable to place him if the remedy were afterwards to be asserted. However, the doctrine
of laches does not apply to cases governed by the Statutes of Limitation. Wherever the Statutes
apply, no delay short of the limitation period will bar the claim.

In Aganran v. Olushi (1907) 1 NLR 66, land held by a family under customary law was sold in
1902 to the defendants by certain members of the family whose assent was necessary to the
validity of the sale. The sale was therefore voidable by the plaintiff and he was legally allowed
to nullify the sale. The plaintiff did not make any attempts to stop the sale until 1905, when he
commenced the present action. The court held that:

(i) the plaintiff had at one stage agreed, for a consideration, to ratify the sale (though he
subsequently resiled from his promise);
(ii) the defendants had at one stage sued as owners of the land to eject trespassers, and
the plaintiff knew of this but did not interfere;
(iii) the defendants had erected houses on the land and the plaintiff did nothing to stop
them. It was held that all these circumstances, coupled with the three-year delay in
bringing the action, amounted to lashes, and the plaintiff had lost his right to set aside
the sale. Winkfield J. at p. 68 said: ‘I think that the actions of the plaintiff amounted
 to an expression of intention or a promise not to exercise the right which he
possessed.’

Ibeziako v. Abutu (1954) 3 ENLR 24 is another example of the doctrine's use in Nigeria. In this
case, A in 1949 was granted for value the lease of a plot of land by L. B alleged that the same
plot formed the subject-matter of a grant to him by L’s predecessor-in-title in 1942. It was held
that if B could prove that A had notice of his (B’s) interest when he acquired the lease, prima
facie B would be entitled to a decree of specific performance of his equitable interest to convert
it into a legal estate. But since he took no steps to enforce his rights until the time of the present
action in 1954, B was guilty of laches and had therefore lost whatever rights he may have had.
But the doctrine of lashes is certainly not confined to specific performance and rescission of
contracts. In Ephraim v. Asuquo (1923) 4 NLR 98, for instance, the plaintiff sought to have a
grant of letters of administration set aside. It was held that as nearly two years had elapsed since
the grant, and the administrator had in all probability completed distribution of the estate, there
had been laches, and the plaintiff’s claim failed.

It should be highlighted that any acceptable explanation for the delay, such as the plaintiff's
ignorance of the facts on which the claim is founded, the plaintiff's infancy or other impairment,
or the defendant's dishonesty, will absolve the plaintiff..

8. EQUALITY IS EQUITY

It is a long standing principle of equity that in the absence of sufficient reasons for any other basis
of division, those who are entitled to property should have the certainty and fairness of equal
division. The maxim also operates to give effect to the idea that loss should be shared equitably
by the parties, and that the recognition of an entitlement in equity should not result to undue
hardship. The maxim applies in the following ways:

(i) Presumption of tenancy in common

Equity is opposed to joint tenancy which operates at common law. In accordance with common
law, upon the death of a joint tenant, the surviving partner inherits the entire property, with no
portion going to the dead tenant's estate. In equity, tenancy in common is favoured. Here, the
surviving tenant will hold the portion of the deceased tenant in trust for the (estate) beneficiaries
of the deceased. The presumption of tenancy in common is made in three instances:

(a) Where property is purchased in unequal share: Where two persons, X and Y, purchase
property, providing the purchase money in unequal shares, and have the property
conveyed to them as joint tenants, when X dies, Y becomes entitled to the whole property
at law, but in Equity he takes on the role of trustee for X's estate, holding the share of the
property that is proportionate to the amount that X advanced (Y being, of course,
beneficially entitled to his own share).
(b) In case of loan on mortgage by two persons: Where two persons, X and Y, lend money to
Z who then mortgages his property to them jointly, it is immaterial whether the amounts
lent were equal or unequal; since the transaction is a loan, a tenancy in common will be
implied, so that the surviving mortgage will be a trustee for the estate of the deceased
mortgagee of that part of the property which is in proportion of the sum lent by the
deceased.
(c) In partnerships: It assumed that partners hold any real estate they purchase as beneficial
tenants in common. Therefore, there is no place for the right of survivorship in business.

(ii) Severance or Termination of joint tenancy

A joint tenancy can also be converted or changed into a tenancy in common thereby excluding
the right of survivorship.

(iii) Equal division by the court

When there is no other fair and practicable basis for distributing property among two or more
contending claimants, the court will follow the maxim and divide the property equally among
them. An example is sharing the balance in the joint account of a husband and wife equally in the
case of divorce or judicial separation.
 9. EQUITY LOOKS TO THE INTENT RATHER THAN TO THE FORM

In Common Law, it was essential to follow the correct procedures or forms when carrying out
transactions. A party's legal rights would often be entirely lost or a transaction would be declared
void for failure to do so. However, equity makes a distinction between issues of form and that
which relate to substance. The maxim "equity looks to the intent rather than the form" suggests
that when it comes to fairness and justice, equitable factors and considerations take precedence
over strict adherence to formalities or technicalities. In legal and ethical situations, this adage
highlights the need to look beyond the superficial or literal understanding of laws, agreements,
or procedures. Rather, it concentrates on understanding the fundamental objectives or driving
forces behind them. It suggests that the spirit or goal of the law or agreement should guide fair
decisions rather than its exact wording.

In contract law, for example, equity may step in to prevent unfair results if there is a technical
breach of the agreement but the parties have behaved in good faith and have sincerely attempted
to execute the agreement's goal. In this situation, it may be unjust to rigidly adhere to the contract's
formalities; rather, it is crucial to consider the underlying intentions. Similarly, when a literal
interpretation of a statute would result in injustice or inequity, courts or decision-makers may
seek beyond the literal interpretation of a law to obtain a fair and just outcome.

Another example is in a time clause, where, if a party to a contract for the sale of land fails to
complete on the date stipulated in the agreement, at Common Law he is in breach of contract,
and the other party may repudiate the transaction. But, in Equity, time is generally not of the
essence of a contract, and breach of a time clause will not be ground for repudiation by the other
party, provided the party in default is ready and able to complete within a reasonable time. Equity
will never follow technicalities at the detriment of the substance.

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

According to this maxim, where there is a specifically enforceable obligation, equity regards the
parties as already in the position which they would be in after performance of the obligation. The
doctrine in the case of Walsh v. Lonsdale (1882) 21 Ch. D. 9, is to the effect that if someone
enters into possession of land under an agreement for a lease of which the court will grant specific
performance, is in the same position (as between himself and the landlord) as if the lease had
actually been granted to him. In other words, “an agreement for a lease is as good as a lease.” In
that case, the landlord agreed in writing to grant to the tenant (the plaintiff) a lease for 7 years at
a rent. No formal deed of lease was executed by the parties as required by law for any lease
exceeding 5 years. When the tenant defaulted in payment, the landlord distrained for rent. The
tenant brought an action for illegal distress and an injunction. The Court held that although the
transaction was illegal at common law for absence of deed, however, where there is an agreement
for a lease under which possession has been taken, the tenant is deemed to hold in equity as if a
lease had actually been granted. The tenant’s action therefore failed.

This maxim also applies to the doctrine of conversion. If a trustee or another person is under a
binding obligation to sell land and convert it into money, or to invest a sum of money in the
purchase of land, Equity considers that to be done and treats the property as being in its converted
state from the time the duty to convert arose.

11. EQUITY IMPUTES AN INTENTION TO FULFIL AN OBLIGATION

Where a person is required to do an act, whether by law (in the broad sense) or by moral, and he
performs an act that may be seen as satisfying that requirement, Equity will interpret his
motivations in the most favourable way and he will be presumed to have performed the act in the
course of his duty. This maxim is the foundation of the doctrines of performance and satisfaction.

12. EQUITY ACTS “IN PERSONAM”

The decrees of the Court of Chancery were directed against defendants personally and not against
his property. As a result, in property cases, the Court of Chancery would act against the person of
the defendant by imprisoning him for contempt if he failed to follow an order, rather than in rem,
i.e. against the property involved in the dispute.
Equity developed the alternative method of sequestration of the defendant’s property until he
obeyed a decree. The court still has the authority to commit and sequester property, but it also has
many more convenient ways to enforce its orders today. Thus, if a defendant fails to convey land
to the plaintiff as ordered by a decree of specific performance, the court, instead of merely
imprisoning him or confiscating his property, may appoint another person to execute the transfer
on his behalf. The court may also make a vesting order, which has the effect of transferring the
property from one person to another without the need for a conveyance. Furthermore, since the
Judicature Acts 1873 to 1875, equitable decrees are enforceable by any appropriate legal writ;
thus, e.g. an order for the repayment of money can be enforced by a writ of fiery facias.
Another major application of this maxim is the rule that the court may make an equitable decree
relating to property situated outside the jurisdiction, as an exception to the general jurisdictional
limits of the courts. Thus, the court may enforce a trust relating to land abroad where the trustees
are present within the jurisdiction (see Rochefoucauld v. Boustead (1897) 1 Ch. 196), or similarly,
where the executors are present, administer assets abroad. See Ewing v. Orr-Ewing (1883) 9 App.
Cas. 34. In the leading case of Penn v. Lord Baltimore (1750) 1 Ves. Sen.444, it was held that the
English court could decree specific performance of a contract to sell land in America, since the
defendant was within the jurisdiction. Also in Bata Shoe Co. v. Melikan (1956) 1 FSC 100, the
Federal Supreme Court held that the High Court of Lagos had jurisdiction to order specific
performance of a contract to assign a lease of land situated at Aba which was outside the
jurisdiction of the Lagos Court on the ground that the defendant resided in Lagos.