9/17/2019 Principles of Equity including Maxims

Updated: Thursday January 14, 2010/AlKhamis Muharram 29, 1431/Bruhaspathivara Pausa 24, 1931, at 07:05:32
PM

Course Contents:

1. Principles of Equity Including Maxims of Equity as given in Snell on Equity.

Books Recommended:

1. The Maxims of Equity by Ch. Rahim Bakhsh.

2. Equity by Snell.

3. Osborn’s Concise Law Dictionary, Sixth Edition by John Burke.

4. Equity, Trust, & Specific Relief by B. M. Gandhi.

Interest protected by society is social right while interest protected by law is legal right. Right become valid by
performing duties towards others, i.e., compliance of duties to fulfill obligations.

Definition: Plato termed equity as “equity is a necessary element supplementary to the imperfect generalization of legal
rules.”

Aristotle expressed equity as eternal and immutable and reiterated that “the equitable is just and better than one kind of
justice – not better than absolute justice, but better than the error that arises from the absoluteness of the statement;………
it is a correction of legal justice.”

Blackstone defines equity as the soul and spirit of all law.

West, J., describing equity as “an intellectual energy”, expressed that “it moulds its deductions from one set of data as the
common law to another into continued adaptation to the growing need of society.”

According to Snell, equity is “a portion of natural justice which, although of a nature suitable for judicial enforcement, was
for historical reasons not enforced by the Common Law courts, and omission which was supplied by the Court of
Chancery.”

Story defines it as “that portion of remedial justice which was exclusively administered by a Court of equity as contra-
distinguished from that portion of remedial justice which was exclusively administered by a Court of Common Law.”

Maitland says that “we ought not to think of Common Law and equity as of two rival systems” but, “we ought to think of
equity as supplementary law, a sort of appendix added to our code, or a sort of gloss written round our code……which
used to be administered by the High Court of Justice as part of the code.”

Osborn’s Law Dictionary says primarily fairness to natural justice. A fresh body of rules by the side of the original law,
founded on distinct principles, and claiming to supersede the law in virtue of a superior sanctity inherent in those
principles. Equity is the body of rules formulated and administered by the Court of Chancery to supplement the rules and
procedure of the common law.

Equity is a sort of justice, which was emerged in England besides from Common Law, which was the responsibility of the
Common Law Courts. There were many issues, which were not fallen in the jurisdiction of the Common Law Courts. They
were referred towards King who was responsible to provide justice. He was decided the cases on the principles of natural
justice. Natural Justice is based on good consciousness, honesty, equality, truth, uprightness, good faith, fairness, ethics,
and morality etc. Later on when the cases exceeded then King delegated this power of administration of justice on his
behalf to the Chief of the House of Commons, named Chancery. This Court was called Chancery Court and was
responsible for the administration of justice on the base of principles of natural justice, which has been described earlier.
Basic principle of the equity is that one must be given that for which he is entitled. Courts are responsible to enforce right,
which is protected legally. Right is always qualified or conditional. It is connected with obligation. If you are entitled for

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the right of life, you must protect other’s right of life. Land can be acquired by lawful means, by operation of law, gift, or
inheritance.

Duty imposed by law is called obligation. Duty must be performed to acquire right. It results into peace. If one fails to
perform his duty and commits breach of duty, it losses to other in term of suffering from loss. Non-granting of right causes
violation of right of other. Act against the right is violation and causes suffering from losses. Person who is suffering from
losses must be protected from loss. He must be compensated and granted his right is called natural justice.

Why natural justice needs to apply:

1. Aggrieved party needs relief, which does not fall within the jurisdiction of common civil courts.

2. Aggrieved party must be compensated with appropriate relief.

Are the principles of natural justice applied in moral misconduct? We would be required to analyze whether what is right
and what is responsibility of Court in the administration of justice. If moral value is recognized by the legislature then it
becomes legal right. Right of life is protected by constitution so it becomes fundamental right. Law passed by parliament
creates right and obligation for person likes Contract Act, Companies Act, Labour Law etc. If a person is legally bound to
do something is obligation. In Contract of Sale, the seller is bound to deliver the goods. It is his obligation and to receive
sale price is his right. On the other hand buyer is obliged to pay sale price being his obligation and to receive goods is his
right. Right is vice versa of obligation. If the contract is not performed in its true spirit and according the provision of
agreement, it is called breach of contract thus needs redress (relief or remedy) from the Court. This is called remedial
justice.

Where law is silent, i.e., there is right if contract exists and required to be performed but lacks specific performance then
Specific Relief Act comes into action for the granting of right. A (being seller) agrees to sell a suit to B (being buyer) on
the price of Rs. 500/-. B pays Rs. 200/- in advance. Upon the payment of balance amount A (seller) refuses to deliver the
suit pricing Rs. 500/- is breach of contract. Seller is responsible to deliver the exact suit to buyer or return the paid amount
to him. But if buyer compels to seller to deliver him agreed suit then what would happen? Is remedy available in law? This
sort of remedy is not available in law. But it is his right that he must be compensated. This is a situation where law is silent.
Here principles of natural justice are applied. In Equity “ubi jus ibi remedium” is applied meaning of which are where
there is right there is remedy.

1. Maxim: Where equities are equal law must prevail. 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. It means the person
bearing legal right shall precede however equity is under law.

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Application: This maxim has certain applications such as:

1. 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 B 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 under discussion.

2. Tacking (application in Pakistan): There are three different mortgages executed in respect of the same property to X,
Y, & Z respectively. The mortgagor executed on different date and non-of the parties have the notice of the prior
mortgage. In such as case the first mortgagee has to legal estate. According to maxim where equities are equal the first
in time shall prevail, the mortgages rank in order of time. If C, by paying off A’s mortgage, obtains the legal estate, i.e.,
obtains conveyance of A’s estate and an assignment of his securities, he is entitled to precedence over B and also to the
first mortgage. But in case the first mortgagee has not the legal estate, the third mortgagee acquires not property over
the second mortgagee even if he made the payment to the first mortgagee.

3. 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.

4. 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.”

It is clear in law that fraudulent transfer of property with intent to defraud or delay is void-able.

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.

Justice Lord Selborne held in famous case Ewing v Orr Ewing that “courts of equity are always supposed courts of
conscience in England.” They act in personam and not in rem. In exercise of this jurisdiction they put pressure for the
performance of agreements and securities even they do not come under their jurisdiction.

Exception: This maxim has two exceptions as follows:

1. 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.

In case of negligence or fraud legal property extinct priority right if equitable property comes subsequently.

2. Equal equities without legal right: Where there are equal equities but legal right lacks, this maxim shall not apply.

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2. Maxim: Equity imputes an intention to fulfill an obligation. Equity courts came into existence to do justice. A
person must do what is right and fair. Contract is made to discharge obligations created. Binding force behind the
contract is intention, which creates obligation. Contracts are made upon requirements on both under one is interested to
have profit while other one is interested in satisfaction of his needs and wants. One shows willingness to sell and other
one in buying. They both agree on common intention. During chilly weather seller is interested in selling of sweater in
exchange of benefit of buyer. This common intention creates obligation. Where the equity involves in contractual
obligations? Where there is possibility to perform the contact, it must be performed specifically.

Where a man is under obligation to do a certain act and he does some other act, which is capable of being considered
as a fulfillment of his obligation, the latter act will be so considered. Because it is right to put the most favorable
construction on a man’s act, and to presume that he intends to be just before he affects to be generous.

Equity Court is a Court established to do what is right, and, consequently, it seems only natural that it should impute to
persons an intention to do what is right.

A husband covenants with the trustees of his marriage settlement to pay to them £ 50,000/- to be laid out by them in
purchase of land in a particular area Devon. He, in fact, never paid the sum, but after marriage purchased land at
Devon in his own name, for £ 50,000/-. He died and could not bring the land into settlement. Equity Court construed
that the purchased land to fulfill his obligation created by the covenant.

There may be situation in which a person under obligation deviates. When compensation can be offered? If the specific
performance is impossible by operation of law or by an Act of God, then compensation is offered. Compensation may
also be offered upon the commission of mistake of fact.

Although reasonable time period should be given to other party in order to discharge obligations. But in inverse
situation full benefit received must be returned.

Subsequent illegality puts a person in deviation from performance. Party cannot compel him to perform contract
specifically. Here benefit is restored, i.e., return of received benefit.

In an instance, A owes Rs. 40,000/- from B. A is liable to repay to B Rs. 40,000/-. A dies making a Will for Rs.
40,000/- out of his legacy in favour of B without mentioning the repayment against credit to B. It would be presumed
that it discharges of debt by legacy.

If A makes a Will for the payment of Rs. 20,000/- out of Rs. 40,000/-, it will be assumed that the balance of Rs.
20,000/- is still outstanding on the part of A.

If A makes a Will of Rs. 60,000/- in favor of B, it will be assumed that A has discharged debt by legacy with above of
obligation. We can say that Will can be equal to obligation, less, or above.

Application: It applies in following cases:

1. Performance: Where a person covenants for valuable consideration to purchase and settlement land upon certain
trusts, and subsequently purchases lands of the nature of those covenanted to be purchased and settled. Equity, if he
retains such land unsettled till his death, will presume that such lands were purchased in performance of the covenant
and are bound of it. Where a person covenants for valuable consideration to leave by Will to or in trust for a certain
person a legacy and subsequently dies intestate, equity will presume that any share of the covenantor’s estate received
by such person under the intestacy is a complete performance of the covenant.

2. Satisfaction: Where a testator having contracted a debt before that date of Will, dies without having paid it and by his
Will leaves his creditor a pecuniary (monetary, fiscal, financial) legacy equal to or greater than the amount of debt,
equity, in the absence of any thing to show a contrary intention, will presume that the testator intended the legacy to be
in satisfaction of the debt.

Distinction: The distinction between satisfaction and performance is that satisfaction presupposes intention. It is
something different from the subject of the contract and is substituted for it. The question always arises, was the thing done
intended as a substitute for the thing covenanted, a question entirely of intent, but with reference to performance the
question is, has that identical act, which the party contracted to do, been done?
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Exception: Pakistani law has provided certain exception in this maxim. Under S. 177 of Succession Act, obligation
remains there, if not provided specifically in a document.

This Act provides that where a debtor bequeaths a legacy to his creditor and it does not appear from the Will that the
legacy is meant as a satisfaction of the debt, the creditor shall be entitled to the legacy as well as to the amount of the debt.

Under S. 178 of the said Act, if the name of parents is mentioned in Will, is not binding because it cannot be made in favor
of sharers.

Where a parent, who is under obligation by contract to provide a portion for a child, fails to do so, and afterwards
bequeaths and legacy to the child and does not intimate by his Will that a legacy is meant as a satisfaction of the portion,
the child shall be intended to receive the legacy as well as the portion.

Under S. 92 of the Trust Act, 1882, where a person buys the property of Trust knowingly will be treated as quasi-trustee
and not the owner.

This Act is founded on the maxim that equity imputes an intention to fulfill an obligation. It lays down that “where a
person contracts to buy property to be held on trust for certain beneficiaries and buys property accordingly, he must hold
the property for their benefit to the necessary to give effect to the contract.”

3. Maxim: Equity looks to the intent rather than the form. The rule of this maxim means that a Court of Equity is
concerned more with the real intention of the parties than with the actual form of the transaction in question. Equity
gives effect to what the real intention of the parties to a contract is, and, like law, it is not always to be guided by the
language in which that intention is expressed in the deed. If a party to a contract for the sale of land fails to complete
on the day fixed for completion, at law he is in breach of his contract, whereas in equity it will usually suffice if he is
ready to complete within a reasonable period thereafter. Equity as a matter of fact regards the spirit and not the latter of
the law.

As it is seen before, Common Law was very rigid and inflexible. It could not respond favorably to the demand of time.
In respect of acquisition and transfer of property, it regarded the form of a transaction to be more important than its
substance. Common Law was fond of mere technicalities. Equity looks to intention of parties and not to the words, and
it looks to the realities rather than to mere appearances.

Rights are created with transaction. Concentration on form defeats its objectives. It is inequitable to insist on form,
which defeats the intent, however it is an important element in any transaction. It is unjust to allow a person to insist
on form, which diminishes the value of intent. If transaction remains incomplete than intent is preferable.

Application: This maxim is applied in the cases where law is rigid and reasonable time concession may help in its
compliance. It is applicable in the following cases:

1. Penalties: It is applied in cases where obligation is imposed under law, but reasonable time relaxation may help in
completion the transaction with period of proceedings. The principle object of the contract which lies in its
performance and not in the implementation of penalty.

In some agreements, provisions are inserted to the effect that in case of breach the party responsible for breach will
have to pay a certain sum to the other party. When the sum payable on default is merely a pre-estimate of the loss
likely to result to the other party on account of the breach, it is called liquidated damages. When the sum payable is a
punishment for failure to perform the contract, it is in the nature of penalty.

At the time when the parties enter into a contract, they only contemplate (look, observe, watch) that it will be
performed, and that, in case of failure to perform, they assure that whatever loss a party suffers by the breach of the
contract by the other, would be made good. The naming of a sum as the amount payable on default is merely an
inducement or security for performance. a sum names by way of penalty is intended to terrorize the other party to
perform the contract, while the sum named by way of damages is intended to secure the performance of the contract by
the other party. The Court of equity does allow damages actually suffered by the breach but does not allow penalty.

2. Forfeiture: This maxim also applies where property comes under obligation due to non-performance of contract. A
property, which is mortgaged but the repayment of loan or credit, is delayed within stipulated time period; creditor
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reserves the right to dispose of it to recover his debt. But it is unfair to forfeit the property at once because the cause of
contract was not to forfeit the property but is was just protection of interest given to creditor. Creditor is liable to serve
notice to debtor before going to the sale proceed and reasonable time must be given for repayment. If the proceeding of
auction is started, foreclosure of property can be stopped upon the payment of debt with interest. Right is not created if
any mistake occurs in document and proved in Court.

Sometimes in a rent deed a condition is inserted that the landlord in case of non-payment of rent will be entitled to re-
entry and the lease would be forfeited. Such clause in a lease is merely incorporated as a security for the regular
payment of rent. The intention is not that lessee be ejected rather the intention is that he should pay the rent regularly,
having been induced to do so under a threat of forfeiture of the lease. The Court of equity, therefore, would not order
forfeiture for non-payment of rent, if the lessor could be compensated. It could be done when the lessee paid to the
lessor in Court the full amount due from him on account of rent together with interest thereon, and full costs of the
suit.

3. Redemption: Mortgager (the person who mortgages his property as security for the mortgage debt; the borrower) has
right to take his property back while it is the right of mortgagee (the person to whom property is mortgaged the lender
of the mortgage debt) to sell out property of the mortgagor in order to recover his advance given to mortgagor.
Mortgagor has right of redemption. Redemption means the paying off a mortgage debt or charge upon property
whereby the equitable interest and legal estate merge; the “buying back” of the property. An action for redemption is
brought by the mortgagor to compel the mortgagee to re-convey the property on payment of the debt and interest. It
also means the equitable right of a mortgagor to redeem the mortgaged property after the legal right to redeem has
been lost by default in repayment of the mortgage money at the due date. Further it means the equitable estate or
interest of a mortgagor in his mortgaged land in respect of which an equitable right to redeem subsists.

4. Specific performance: Sometimes, when a person contracts to purchase immovable property from another, a
condition is entered in the agreement of sale that on a certain date the agreement would become complete by the
execution of a deed of sale. If now the sale deed is not executed on the scheduled date and thereby a breach has taken
place and the question arises whether a person who has allowed that days to pass can file a suit for specific
performance. The answer depends upon the intention of the parties when they entered into the agreement. Primarily the
intention was to purchase the property and the day fixed for the completion of the sale deed was only to secure
performance of the agreement of sale.

Limitations and exceptions: This maxim has neither limits nor exceptions. It can be applied anywhere.

4. Maxim: He who seeks equity must do equity. Islam says if you want to exact the full measures, you must also be
prepared to reciprocate. The principle involved in this maxim is that any one seeking assistance of a Court of Equity
must as a condition to obtaining relief do justice as to the matter regarding which the interference of the Court is
prayed for. While giving relief Court looks upon the corresponding rights of defendant and duties of plaintiff. The rule
means that a man, who comes to seek the aid of Court to enforce his claim, must prepare to submit in such proceedings
against defendant in respect of which the assistance of equity is prayed. Where a plaintiff seeks a remedy to which he
is legally entitled the Court will grant him the relief and will take no account of his conduct. If however, he seeks an
equitable remedy, the conduct of the plaintiff relating to the transaction in dispute become a relevant matter, because
the plaintiff must convince the Court that he has acted conscientiously himself in order to obtain an equitable relief
which is discretionary with the Court.

A person, who seeks relief under the principles of equity, must do whichever is equitable. One who violates the rights
of other cannot claim his right until he fulfills his obligation toward others. At first plaintiff has to discharge his duty
toward others then he may pray for remedy or relief.

Application: This rule has many applications, e.g.,

1. Illegal loans: Illegal loans are first instance on which principles of equity apply. It was first propounded in Lodge v
National Union Investment Company Limited facts of which are as follows:

B borrowed money from M by mortgaging certain securities to him. M was unregistered moneylender. Under the
Moneylenders Act, the contract was illegal and therefore void. B sued M for the return of securities. The Court refused
to make an order except upon the terms that B should repay the money, which had been advanced to him. This decision
was based on the principle of this maxim.
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2. Doctrine of Election: A donor A gives his own property to B and in the same instrument purports (intention, claim) to
give B’s property to C. B will be put to an election. He either to retain his own property and reject the benefit under the
instrument or to accept the benefit granted to him by the donor, and allow the gift of his own property made by A to C
to take effect. But in no case can B choose to keep the benefit granted to him and at the same time retain his property
referred to in the instrument.

3. Consolidation of mortgages: In certain circumstances a person who has become entitled to two mortgages made by
the same mortgagor may consolidate the mortgages and refuse to permit the exercise of the equitable right to redeem
on mortgage without the other, i.e., unless there is simultaneous redemption of all. This is called equity of
consolidation. This is naturally on the principle that who comes into equity must do equity.

4. Notice to redeem mortgage: A mortgagor who wishes to exercise his equitable right to redeem his mortgage must
give his mortgagee reasonable notice of his intention. It is an equitable right of mortgagee.

5. Wife’s equity to settlement: There was time when in England at Common Law the wife could not hold independently
any property. This was the effect of marriage. Legal existence of the wife so to say merged into that of her husband, the
husband consequently becoming the absolute owner of her money, goods and cattle, things in action and estates. But
equity saw injustice in this situation and therefore departed from the Common Law principle in three cases, such as:

(1) By recognizing the wife’s equity to a settlement.

(2) Recognizing the wife’s right to a separate estate in certain circumstances.

(3) Restrain on anticipation.

Court refuses to aid husband in a case to get possession of property unless he makes a fair settlement of part of the
property on his wife and children.

The right of a wife to have a settlement on herself of part of her equitable property, which her husband was claiming
by suit in a Court of equity. Since a married woman holds her property separately from her husband, and has no need
to invoke this doctrine.

6. Equitable estoppel: Where maker of the representation is not allowed to go back is called estoppel. The rule of
evidence or doctrine of law, which precludes (prevent, exclude) a person from denying the truth of same statement
formerly, made by him, or the existence of facts which he has by words or conduct led others to believe in. If a person
by a representation induces another to change his position on the faith of it, he cannot afterwards deny the truth of his
representation.

7. Set off (conflicting claims in one proceeding): A judgement-debtor is entitled to set off a decree which he has against
his decree-holder and this right of set off he can also exercise against the transferee of the decree-holder.

A holds a decree against B for Rs. 500/-. B has decree against A for Rs. 300/-. C is a transferee from A of his decree. C
cannot execute the decree against B for more than Rs. 200/-.

Difference between the two maxims: Difference of present and past conduct lies in two maxims.

Present conduct lies in the maxim “who comes to equity must do equity”. If you want to acquire property, must give the
right of others first then you may demand your right. This conduct lies in “who comes to equity must do equity” maxim.
Then plaintiff may moulds according to the imposition of restrictions of the Court.

Past conduct lies in the maxim “who comes to equity must come with clean hands”. This maxim refers before the
plaintiff approaching to the Court. Plaintiff must be clean hand before he goes to Court to have equity. It also refers to the
conduct as the Court thinks it ought to be. If the conduct of plaintiff would unfair, he would not be entitled to get the relief.

Limitation: Some limitations are as follows:

1. It cannot be applied against the State legislature.

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2. Also it cannot be applied to Acts of Parliament because they are no representations.

3. No one can go against the statute.

4. Where liability is imposed by the statute.

5. Where there is statutory prohibition.

6. Where there is no representation or government makes out promise.

7. Where government policy is involved but where public authorities are involved there it can be applied.

8. Where there is fraud or collusion.

9. Where public interest suffers.

10. Where there it seems inequitable.

5. Maxim: Equity will not suffer a wrong without remedy. It means where there is right there is remedy (Ómi eAe ç{Ë
µY çBÈU). It deals with compensation in case of violation of legal right of an individual. It is also enforcement of
right. Right must also provide remedy against its infringement. Right has no value if there is not remedy. There is no
value of right without remedy or enforcement.

The idea expressed in this maxim is that no wrong should be allowed to go un-redressed if it is capable of being
remedied by Courts of Justice. It really underlines the whole jurisdiction of equity. Rights and remedy go together.
There is no wrong for which equity cannot provide remedy. Where common Law failed to provide remedy there
Chancery Courts supplied such remedies as was not obtainable in law. It is possible for the entire equitable jurisdiction
of the Court of Chancery to prevent failure of justice. The maxim must be taken as referring to right which are suitable
for judicial enforcement by which were not enforced at common law owing some technical defect. It should not
conclude that Court of Chancery furnished a remedy for every moral wrong.

This maxim regards exclusively rights which come within a class of rights recognized at law, or capable of being
judicially enforced without occasioning a greater detriment or inconvenience to the public. In a simple contract to sell
land, common law could provide just damages. But damages could not be adequate relief and plaintiff could not sue
for specific performance. The equity Court came to his aid and gave him the relief by way of specific performance.
Neither the breach of contract nor the commission of a wrong could be restrained by injunction by the common law
courts though this remedy was available in the Courts of Equity.

Application: This maxim is applied in the cases such as:

1. Violation of right: Where plaintiff’s legal right violates but he suffers from no loss. Here maxim injuria sine
demnum applies and nominal or small amount of damages is awarded. If A trespasses in B’s property but no damage is
occurred and A brings the tort case in Court, since no loss is happened, so Court will award nominal damages because
legal right of A is violated. In the case of Ashby – v – White, plaintiff was legally qualified voter. Defendant refused
willfully, maliciously, and fraudulently to cast him vote. Legal right was infringed but there was no actual loss because
candidate was elected in election. In another case of Constantine – v – Imperial Hotel, plaintiff was refused to allot
accommodation in hotel. Plaintiff got accommodation in other hotel. He received damages, which were very nominal.

2. Where defendant holds evidence: Any document which was lying with defendant and plaintiff was in need of it to
present as evidence in Court but common law Court were unable to get it discovered. Equity Court was in such a
position to help plaintiff in providing remedy.

3. Uses and trust: It is based on the principle that one has interfered in the enforcement of uses and trust.

In a case A conveys the certain land to B for the benefit of C. If B misappropriates the trust property, law cannot
provide remedy to C, a beneficiary. In this instance, equity interferes to provide remedy to C. Since the wrong use of
trust itself is injustice, so it can be remedied in Court of Equity.

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4. Interest of mortgagor: In a mortgage transaction the mortgagor agreed to pay the mortgage debt at a certain date and
the mortgagee to re-convey the mortgage property to the mortgagor if his claim was paid by the due date. If the debt
was not paid on or by the due date the property was forfeited to the mortgagee and the mortgagor was forever deprived
of it although the value of property was much more than the debt in lieu of which it become absolutely vested in the
mortgagee.

The mortgagor in such cases had no remedy at law to recover his property, as common law did not recognize any right
in favour of the mortgagor in the property after the date of payment. Equity took different view. Equity Court held that
intention of the mortgage was not to forfeit the property but it was just security of debt given. If the mortgagor paid his
debt even after the fixed date, he was entitled to recover the property.

Therefore this maxim created the very important right known as the right of redemption or equity of redemption in
favour of mortgagor.

The equitable right of a mortgagor to redeem the mortgaged property after the legal right to redeem has been lost by
default in repayment of the mortgage money at the due date.

The equitable estate or interest of a mortgagor in his mortgaged land in respect of which an equitable right to redeem
subsists.

5. Right of trusteeship: Common law Court does not recognize the rights of trusteeship. But in equity author of trust is
supposed owner of the trust. If trustee commits breach of trust, author can institute a suit for remedy against trustee for
breach of trust. Equity regards the intent of the contract rather than its form.

6. Protection of the right of creditor: This maxim applies in the cases where documentary evidence loses. Creditor
holds the receipt of debt which debtor gives to creditor. Creditor keeps the receipt in his safe custody. But there may be
a case where such receipt misplaces or destroys. Common law does not provide remedy in such a situation. Here
equity provides remedy to aggrieved party such as creditor who has right of repayment. Since equity Court is Court of
conscious therefore equity regards and keeps in view of facts rather than documents.

7. Enjoyment of right: Every person has a right to enjoy his rights within the limits which law prescribes. Owner of a
certain land may construct home on his land, which may include window towards adjacent land. He enjoys air and
light. Other person may build his own home which may cause prevention in the enjoyment of such right, i.e., air and
light. However prior builder suffers from injury by subsequent builder, but it is not violation of legal right. Every
person has right of construction on his land and he may enjoy by such construction. There may be a contrary situation
where prior builder has been acquired right of easement. Subsequent builder shall extinct his right.

8. Specific performance: This maxim also applies in the cases where right of specific performance is granted. Such
grant follows the rules of equity.

Limitation: There are three limitations in this maxim such as:

1. Legal rights: Only violation of legal right is subject of equity. Principles of this maxim applies where breach of legal
right is committed there equity provides sufficient remedy. Equitable rights are also subject of equity. Equity cannot
provide remedy mere on breach of moral right. Courts regard only those violations against which they enforce right.
However violation of recognized right is breach of violation of right cognizable under equity. Where equity does not
recognize right, equity does not provide remedy.

2. Where jurisdiction of common Court lies: Equity does not provide relief where both right and remedy is available
under the common Court. It means equity Court fails where jurisdiction of common Court is available. Equity regards
the jurisdiction of common courts. Cases, which come in the jurisdiction of Common Law courts cannot be presented
in equity courts, thus no relief can be granted.

3. Negligence of party: Law helps those who help themselves. Law aids the vigilant and not the indolent. Plaintiff is as
responsible to protect his right as courts are. Neither plaintiff has to destroy his evidence nor he has to allow others to
destroy evidence. Where his negligence destroys evidence or he waives off his right, equity shall not provide remedy.
Equity courts become unable where party destroys or let other party to be destroyed evidence in his own favour due to
negligence. If the right is waived off for the equitable remedy even then this maxim is not applied.
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6. Maxim: He, who comes to equity, must come with clean hands. It is meant that person claiming right is not willing to
fulfill his obligation. He must fulfill his obligation first and then come for equity. Plaintiff must come with clean hands.
Plaintiff should not himself wrongdoer. Where conduct of person is defective he is disentitled. Terms and conditions
will decide right of claimant.

S. 9 of Civil Procedure Code (CPC) gives unlimited powers to civil courts. Why these powers are given? In old system
there were heads of each and every case. If case was fallen within that heads then courts were liable to hear that
particular case. There are certain matters for which Court is not competent in normal circumstances to hear the case.
There was no provision for uncertain matters, therefore equity courts were given the authority to decide this sort of
matters. Every case is hearable for civil Court. Civil Court is only responsible to decide matters, which are civil in
nature, i.e., violation of civil legal rights. Civil Court is empowered for every kind of civil suit. S. 22 of Specific Relief
Act gives discretionary powers to civil courts. If the document has been lost then oral evidence is admissible to prove
the right.

Equity, as it was based on good faith and conscience, demanded fairness, uprightness, and good faith not only from the
defendant but also from plaintiff. It is therefore aptly said that, “he that hath committed an inequity, shall not have
equity.” This maxim goes a step ahead and expects the plaintiff’s conduct above reproach must be fair before he comes
to the Court.

Act of state (emergency or necessity) comes in exception while act of government (authority must prevail) may be
rebutted.

Application: This maxim is applied where act is done within the limit of legal rights. If a person exercises his legal rights
which affects the rights of other cannot be said wrongdoing on the part of defendant. It is applied in the cases where parties
disagree on the distribution of profits arriving from legal proceedings. Proceeds, which come from illegal bargain, can
never claim right under equity.

Inequitable conduct is also a case where person who commits fraud and gets certain amount losses his right to sue in equity
courts. Concealment of age by minor is the good example.

Limitation: As a whole the conduct of plaintiff is not taken into consideration. Plaintiff should have immediate and
necessary connection with the equity sued.

Exception: There are two exceptions to the maxim such as:

1. For the sake of public relief is granted even the transaction is against public policy. Parties may be relieved on moral
values.

2. Where party admits his wrongdoing before his unjust plans are carried out, the Court will not stick to the letter of the
maxim and will extend its assistance for doing justice.

7. Maxim: Equity follows the laws. It means that where law is defective and unable to provide justice and sufficient
remedy there equity provides remedy, keeping in view of existing laws. Procedure of equity Court is not in contrast
with existing law, but where there, injustice or justice lacks there equity interferes to grant remedy.

The direction of 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; this direction in some cases follows the law, in some cases assists the law, and advances the
remedy. Equity does not come to destroys the law, but for its fulfillment, for its explanation, and for its supplement.

In other words where there is some important circumstances disregarded by the existing law and rules there equity
interferes.

Application: S. 17 of Registration Act governs the rules of compulsory registration of document, while s. 18 of the same
Act governs the rules of optional registration of document, and s. 50 deals with the priority rights. In case where
registration is compulsory and document is not got registered, that document is invalid in the eyes of law. In other case
where registration was optional and one of two persons had got registered that document while other one had not got it
registered. Here equity would follows the laws and provides the remedy to the person who had got registered the
document, despite it was optional. Here s. 50 of Registration Act applies.
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In Quran owner of property is obliged to make Will in his life as he wants, but keeping in view of justice. If he dies by
making Will, which is based on inequality or bias-ness, can be rebutted in Court.

Where the law was based on fudal tenure, equity refused to follow it.

Limitation: It has two exceptions as follows:

1. Where specific and clear law is not applied.

2. Where analogy is not applied. Equity formulates and applies its own rules, on the reason that injustice must be
remedied.

8. Maxim: Delay defeats equities. It is self-evident truth (axiom) that eternal vigilance is the price of liberty. This maxim
means “Equity aids the vigilant and not the indolent.” If one sleeps upon his rights, his rights will slip away from him
and therefore this maxim is expressed. If someone has any right, he must come to Court for remedy within stipulated
time period as laid down in the law. If he comes within fixed time period, then his right would be recognized and
enforced. Delay in claim defeats right. There are two types of delays. One is explainable and other one is not
explainable. If the case is referred toward the concerned authority and they have retained the case, which caused delay,
it is explainable and does not defeat the right.

In other instance, if the case was not put to the concerned authority and was being referred toward irrelevant
authorities and caused delay, is not explainable and thus defeats rights.

Application: This maxim applies only when a claim is made to equitable relief.

Where there is no limit of period, how the matter would be decided? Courts are allowed to use their discretionary powers.
They have power to accept or reject the arguments. Application of this maxim became less valuable when Limitation Act
passed. Now the period of limitation commences when the matter is brought in the knowledge of the aggrieved party. If
law restricts the matter to bring into the Court within one year and matter is brought after one year with proper explanation
then Court would consider its limitation from the date of its explanation. Proper forum must be adopted for remedy.
Insanity, outstation in abroad, sickness, pending case with relevant authorities, illegal confinement, late bringing into
knowledge of aggrieved party, draft was prepared but the time of Court was over, there was delay in the typing, last day
was off, transportation breakdown, or any other valid causes are sufficient reasons to make ground for delayed matters.

Bonafide purchaser does not know whether property he has acquired is encumbered. He is one who purchases property in
good faith. Here Specific Relief Act applies.

Set off means counter claim. It means adjustment of the right, which I have to get from other and the right, which I have to
give to other. Adjustment of difference regardless maturity of other’s right is called set off. Liability of other person in
other transaction does not affect the right of other. If you have any claim, must give right of others.

A claim in a liquidated amount by the defendant to a sum of money as a defence to the whole or part of a money claim
made by the plaintiff, which may be included in the defence and set off against the plaintiff’s claim, whether or no it is
added as a counterclaim. There can, in general, be no set off against the Crown.

A has mortgaged his piece of land to B for the Rs. 100,000/- for three year. A is liable to pays B Rs. 100,000/- after three
years. In another transaction B has to pay A Rs. 200,000/-. A can adjust his payment against the liability of B. It is only
allowed if Court satisfies and allow.

9. Maxim: Equality is equity. Equality is a sort of justice in words of Plato. In the absence of other thing, it is the best
solution. Equality is not equality in its ordinary meaning but it is proportionate equity. In absence of any sufficient
reasons for any other basis of division, those who are entitled to property should have the certainty and fairness of
equal decision. Nobody should be given undue benefit. If there is no duty there is no right.

Application: This maxim is applied in the following situations:

1. Equal distribution of joint funds and joint purchases. This maxim applies where more than one seller or purchasers
are there. If loss occurs, it would be distributed proportionately among them upto the extent of their share in proceeds.
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If Court imposes fine, all are responsible equally. If one pays the whole of fine, may recover the balance of fine from
other but proportionately.

2. Contribution between co-trustees, co-sureties, and co-contractors: Creditor has right to claim his advance from
any one of co-sharers. The debtor who thus compelled to pay the whole of the claim had no remedy against the others.
Equity made it possible for him to recover the share of other but proportionately.

10. Maxim: Equity looks on that, as done which ought to be done. Contract is based upon the act of parties, which
creates rights and liabilities.

For instance, B pays as advance money to A, for the purchase of a plot and seller who is A receives the money. A is
liable to transfer ownership upon the receipt of full payment from B within stipulated time period, which is to say 3
months. If buyer pays the remaining money within time specified then seller is obliged to transfer ownership, but in
contrary situtation he is liable to pay damages against the breach of contract. Seller cannot sale the plot during the
course of fixed period. He is liable to pay compensation if he resells it to third party. But if buyer fails to pay
remaining portion to seller, buyer may neither bind seller to wait for reselling nor he can demand advance amount
back.

Conversion makes movable property immovable within fixed time and vice versa.

If the contract is not executed or buyer becomes insolvent and both seller and buyer agree to alter the contract will
reconvert the contract to same position as it was before the agreement. Decision of parties is sufficient cause for re-
conversion.

11. Maxim: 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.

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 interest nothing. However if his own conduct is defective
then again Court refuses to issue injunction. Place of suing of suit: Case may be initiated or proceeded where there
defendant resides or property is situated. It relates to territorial jurisdiction of Court. If property is situated in Sialkot and
plaintiff resides in Lahore, he may initiate proceedings either in Lahore or Sialkot, but he cannot initiate this case in
Gujranwala.

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

Limitation: Personal conduct may disentitle the person. Criminal and tortuous acts fall in its limitation.

Who can serve notice?

1. The claimant can give notice.

2. Legal representative may give notice in case of death of any person.

3. Authorized agent who has expressed authority or have power of attorney may give notice.

4. Official assignee may give notice in case of liquidation.

To whom it may be given?

1. Defendant is a person to whom notice may be given.

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2. Agent or legal representatives are also liable to give notice.

3. In case of insolvency, notice can be given to official assignee.

When notice may be given?

1. Under express statutory provision notice is given.

2. Where cause of action (Ô̧e šÖBÄI) arises (on the default of other party).

When notice is not required?

1. Where facts are within the knowledge of defendant.

2. Where defendant himself is responsible for the irregularity, i.e., involve in fraud etc.

Pre-requisites of notice:

1. Notice must be for a reasonable time period.

2. Opportunity must be given to defendant for his defence.

3. Notice even after proceeding is also lawful, especially in tortuous acts or in criminal cases but it is not considered valid
in civil cases.

4. Delay in notice serving is also valid in some cases.

5. Public document is also notice, like statute law, personal law applicable on self, and in newspaper. Personal law, which
is not applicable to the concerned person, is not a public document.

Constructive notice means implied notice. It means where it is conceived that it is notice.

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