Lecture Notes Maxims of Equity 27 PDF

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Lecture Notes Maxims of Equity 27
Equity (Quaid-i-Azam University)
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Department of Law
Quaid-i-Azam University
Islamabad
Lecture
Notes
on
Equit
y
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Lecture Notes on Equity 2
Shaukat Hayat
Copy Right © Shaukat Hayat2015

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The Origin and Development of

Equity
Definition of Equity:
In its literal sense the term “equity” denotes fairness,
impartiality and justice. In its legal and technical sense the
term has been defined as, “A system of law designed to
furnish remedies for wrongs which were not legally
recognized under the Common Law of England or for
which no adequate remedy was provided by the Common
Law.” It has also been defined as, “A branch of English
Common Law which developed hundreds of years ago
when litigants would go to the King and complain of harsh
or inflexible rules of Common Law.”
World Legal Systems:
Most nations today follow one of two major legal
systems, i.e. the Common law system or the Civil law
system. The common law system emerged in England
during the Middle Ages and was applied within British
colonies across continents. The civil law tradition
developed in continental Europe at the same time and was
applied in the colonies of European imperial powers such
as Spain and Portugal.
Common Law System:
English Common Law emerged from the changing
and centralizing powers of the king during the Middle
Ages. After the Norman Conquest in 1066, medieval kings
began to consolidate power and establish new institutions
of royal authority and justice. New forms of legal action
established by the crown functioned through a system
of writs, or royal orders, each of which provided a specific
remedy for a specific wrong. Before the Norman conquest,
different rules and customs applied in different regions of
the country. But after 1066 monarchs began to unite both
the country and its laws using the king’s court. Justices

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created a common law by drawing on customs across the

country and rulings by monarchs. These rules developed
organically and were rarely written down.
The Common law is a body of law based on custom
and general principles embodied in case law which serves
as precedent and is applied to situations not covered by
statute. The Common Law was applied within British
colonies across the continents. In its initial age, the
Common law was un-codified. The Common law is largely
based on precedent, i.e. the judicial decisions that have
already been made in similar cases.
Civil Law System:
The term "civil law" is derived from the Latin words
“jus civile”, by which the Romans designated the laws that
only the Roman citizens or “cives” were originally
privileged to enjoy. For the other people there was the “jus
gentium”. The civil law is based on Roman law, especially
the Corpus Juris Civilis of Emperor Justinian.
The case law in civil law systems does not have
binding force. In civil law the courts have the task to
interpret the law as contained in a legislation, without
being bound by the interpretation of the same legislation
given by higher courts. In a Civil Law system, the judge’s
role is to establish the facts of the case and to apply the
provisions of the applicable code.
Countries following a civil law system are typically
those that were former French, Dutch, German, Spanish or
Portuguese colonies or protectorates, including much of
Central and South America. Most of the Central and
Eastern European and East Asian countries also follow a
civil law structure.
Comparison between the Common Law and the Civil
Law Systems:
Following are certain points of distinction between the
Common Law and the Civil Law system:
 Codification of Law:
The difference between civil law and common law lies
not just in the mere fact of codification, but in the
methodological approach to codes and statutes. In civil

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law countries, legislation is seen as the primary source of

law. By default, courts thus base their judgments on the
provisions of codes and statutes, from which solutions in
particular cases are to be derived. Courts thus have to
reason extensively on the basis of general rules and
principles of the code, often drawing analogies from
statutory provisions to fill lacunae and to achieve
coherence. By contrast, in the common law system, cases
are the primary source of law, while statutes are only seen
as incursions into the common law and thus interpreted
narrowly.
 Sources of Law:
In the common law system, the law has been
dominantly created by judicial decisions. While in civil law,
the main principles and rules are contained in codes and
statutes, which are applied by the courts codes. The case
law constitutes only a secondary source of law.
 Binding Nature of Precedents:
A lawyer in the common law court starts with the
actual case and compares it with the same or similar legal
issues that have been dealt with by courts in previously
decided cases. The civil law is based on codes which
contain logically connected concepts and rules, starting
with general principles and moving on to specific rules. A
civil lawyer usually starts from a legal norm contained in a
legislation, and by means of deduction makes conclusions
regarding the actual case.
 Main Functions of the Courts:
In the common law the courts are supposed not only
to decide disputes between particular parties but also to
provide guidance as to how similar disputes should be
settled in the future. The courts in the civil law system
have as their main task deciding particular cases by
applying and interpreting legal norms.
 Interpretation of Laws by the Courts:
The interpretation of a legislation given by a court in
specific case is binding on lower courts, so that under the
common law the court decisions still make the basis for
interpretation of legislation. On the other hand, in contrast

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to common law, the case law in civil law systems does not
have binding force. In civil law the courts have the task to
interpret the law as contained in a legislation, without
being bound by the interpretation of the same legislation
given by higher courts.
The Common Law Writs System:
When the royal courts became more organized
during the 13th century, the royal judges and legal officers
wrote down the common law forms of action in standard
form documents called “writs”.
Those writs set out the cause of action or complaint.
It commanded the defendant to appear in the King’s
Court. Each writ was based on some principle of law. The
facts were stated in the writ.
The writs developed their special names. For instance a
Writ of Right used to be granted for a proprietary action, a
Writ of Convenant for an action for breach of contract.
The Emergence and Development of Equity:
Equity was founded upon the principles of fairness
and conscience. Its piecemeal1 development took place
over the years as a result of the strict application of the
rigid provisions of the Common Law. Consequently,
equitable principles developed in a piecemeal and
responsive way. Equitable remedies were both flexible and
specific to the circumstances of each case and the
granting of equitable relief was always discretionary. An
understanding of the history and development of equity is
fundamental to an understanding of this area of the law.
Common law proceedings used to be commenced by
a relevant writ which was only available for specified
causes of action. If a plaintiff could not bring his action
within those writs, the common law courts could not
provide any remedy to an aggrieved person. Due to
corruption within the court system and the nature of the
common law, many decisions of the common law courts
were considered to be harsh and unjust. Dissatisfied
litigants began petitioning the King for relief and leniency.
As the number of petitions grew, the King delegated that
1
Unsystematic and partial development taken over a period of time.

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review function to the Lord Chancellor and it was from that

function that the Court of Chancery was established. The
first chancellors were ecclesiastics with no formal legal
training whose decisions were largely shaped by questions
of conscience and fairness.
The decisions issued by the Court of Chancery in its
formative stages were framed according to canon law,
rather than the common law and as a result this area of
the law was not developed upon any clear doctrinal
foundations. During the 16th century the character of the
Court of Chancery changed with the appointment of a
lawyer, Sir Thomas Moore as Chancellor. From that point in
time all future chancellors were lawyers, reports of
proceedings were kept and equitable doctrines began to
develop.
In the Common Law courts the only remedy in civil
suits was award of a decree for damages. The Common
Law had no other remedy. The Court of Chancery brought
new remedies that were not known to the writs system of
the Common Law courts such as injunctions, specific
performance of a contract etc. Another and greatest
innovation of the Court of Chancery was the introduction
of the concept of trusts.
Conflict between Common Law and Equity:
The two court systems were soon in conflict and
there are many examples of such conflict as the two
systems of law were in confrontation with each other
regarding the issue of supremacy. The growing tension
between the two bodies of law culminated in the Earl of
Oxford’s case in 1615. In that case, Coke CJ gave
judgment in a common law action which was alleged to
have been obtained by fraud. The Lord Chancellor, Lord
Ellesmere, then issued a common injunction from the
Court of Chancery, preventing proceedings to enforce the
common law judgment.
As the two courts were deadlocked the matter was
referred to the Attorney -General, Sir Francis Bacon, who
upheld the use of the common injunction and determined
that whenever there was conflict between the common
law and equity, that equity would prevail. The Judicature

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Act 1873 during the 17th to 19th centuries the

fundamental principles of equity were developed and
followed in the court of chancery by way of precedent.
However the common law and equity continued to be
administered by separate courts and litigants who had
commenced their claim in the wrong jurisdiction were
forced to start again in the other.
The cost and time implications of this duality led to
the enactment of the Judicature Act 1873 which fused the
administration of the common law and equity. This Act
abolished the old court system and replaced it with a new
High Court of Justice which was vested with all of those
jurisdictions previously exercised by the separate courts.
There was one code of procedure for all claims and the
dominance of equity in any situation of conflict with the
common law was specifically preserved.

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Maxims of Equity
The Nature and Role of the Maxims of Equity:

The maxims of equity can be defined as rules of
equity. The maxims were not written down in an organized
code or enacted by legislatures, but they have been
evolved through generations of judges. The maxims can
be termed as the set of general principles which are
governed the way in which equity operates. None of the
maxims were in the nature of a binding rule. These
maxims are only guidelines for the courts apply equity. In
other word the maxims of equity are principles developed
by the English Court of Chancery and other courts who
have administered equity jurisdiction. They were often
expressed in Latin but are translated into English.
Historically equity developed not on any formal
process of precedent, but on the discretion of the Lord
Chancellor that is why it has been said, “The equity is as
long as the Chancellor’s foot. However, as time went on,
the decisions of the Court of Chancery began to form a set
of principles and doctrines. What emerged in the course of
the development of equity were a set of maxims which
explained the way in which equity would intervene in
given situations.
1. Equity will not Suffer a Wrong to be without a
Remedy:
The maxim means that where there is a right there is
a remedy. This idea is expressed in the Latin Maxim ubi jus
ibi remedium. It means that no wrong should go un-
redressed if it is capable of being remedied by courts. This
maxim indicates the width of the scope and the basis of
on which the structure of equity rests. This maxim imports
that where the common law confers a right, it gives also a
remedy or right of action for interference with or
infringement of that right.
In Ashby v. White, wherein a qualified voter was not
allowed to vote and who therefore sued the returning

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officer, it was held that if the law gives a man a right, he

must have a means to maintain it, and a remedy, if he is
injured in the enjoyment of it.
In cases where some document was with the
defendant and it was necessary for the plaintiff to obtain
its discovery or production, a recourse to the Chancery
Courts had to be made for the Common Law becoming
‘wrongs without remedies.
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. There is no wrong for which
equity cannot provide remedy. Where common Law failed
to provide remedy there Equity Courts provided such
remedies.
Application of the Maxim:
In the following lines there are few examples of the
application of the maxim:
(a)- Infringement of a Legal Right where the
Plaintiff Sustains no Damage– Injuria Sine
Damnum:
Where plaintiff’s legal right violates but he suffers no
loss. Here maxim injuria sine demnum applies and
damages for the infringement of a legal right shall
awarded. For instance if A trespasses the B’s property but
no damage is caused by him to A’s person, property or
reputation and A brings an action in tort, the court shall
award damages to B because his legal right is infringed.
(b)- 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.
(c)- 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,

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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.
(d)- The Right of a Mortgagor - Equity of
Redemption:
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 the Common 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.
(e)- Right of Author of a Trust:
The Common law Court does not recognize the rights
of an author of trust to bring action against a trustee in
case of breach of trust by him. However, 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.
(f)- Specific Performance of Contracts:
In the cases of breach of contract the Common Law
had the only remedy of awarding a decree for damages.
There may be circumstances in which damages may not
be adequate remedy for a plaintiff such as the case of
purchase of houses or antiques etc. The Equity realized
this defect and harshness of the Common Law and
invented the remedy of specific performance of contract

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under which a defendant could be compelled to perform

the contract specifically.
2. Equity Follows the Law:
This maxim means that equity respects the law.
Accordingly equity will refrain itself from unnecessarily
overriding or replacing the law instead it will try to uphold
the law as much as possible.
This maxim is demonstrated largely and illustrated
by the many instances in which equity has adopted the
same position as the law. By upholding the statutory
provision of time frames for the institution of cause of
action, equity is simply following the law
The maxim indicates the discipline which the
Chancery Courts observed while administering justice
according to conscience. The discretion of the Court of
Chancery was governed by the rules of the Common Law.
In his regard the famous jurist, Maitland said,
“Thus equity came not to destroy the law but to
fulfill it, to supplement it, to explain it.”
The goal of equity and law is the same, but due to
their nature and due to historic accident they chose
different paths. Equity respected every word of law and
every right at law but where the law was defective, in
those instances, these Common Law rights were controlled
by recognition of equitable rights. The famous writer on
law Snell therefore explained this maxim in slightly
different way by saying,
“Equity follows the law, but not slavishly, nor
always.”
a) Registration of Documents:
Section-17 of Registration Act governs the rules of
compulsory registration of document, while Section-
18 of the same Act governs the rules of optional
registration of document. 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

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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.
b) Promisory Estoppel:
At common law, where a person died intestate who
owned an estate, leaving sons and daughters, the
eldest son was entitled to the whole of the land to
the exclusion of his younger brothers and sisters.
This was unfair, yet no relief was granted by the
English Common Law. But in this case it was held that
if the son had induced his father not to make a will by
agreeing to divide the estate with his brothers and
sisters, equity would have interfered and compelled
him to carry out his promise, because it would have
been against conscience to allow the son to keep the
benefit of a legal estate which he obtained by reason
of his promise.
3. He who Seeks Equity Must Do Equity:
The maxim means that to obtain an equitable relief
the plaintiff must himself be prepared to do ‘equity’, that
is, a plaintiff must recognize and submit to the right of his
adversary.
a) Illegal loans:
In Lodge v. National Union Investment Co. Ltd., the
facts were as follows. One “B” borrowed money from
“M” by mortgaging certain securities to him. “M” was
a unregistered money lender. Under the Money
Lenders’ Act, 1900, the contract was illegal and
therefore void. “B” sued “M” for return of the
securities. The court refused to make an order except
upon the terms that “B” should repay the money
which had been advanced to him.
b) Benefit Taken under the Viodable Contracts:
Under sec 19-A of the Contract Act, 1872 if a contract
becomes voidable and the party who entered into the

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contract voids the contract, he has return the benefit

of the contract.
c) Doctrine of Election:
A donor A gives his own property to B and in the
same instrument purports to give B’s property to C. B
will be put to an election. 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.
d) Equitable Estoppel:
Estoppel is a rule of evidence which does not allow a
person to deny a 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.
e) Set off:
A judgement-debtor is entitled to set off a decree
which he has against the 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/-.
4. He Who Comes to Equity Must Come with Clean
Hands:
Equity demands fairness not only from the defendant
but also from the plaintiff. It is therefore said that “he that
had committed an inequity, shall not have equity.” While
applying this maxim the court believed that the behavior
of the plaintiff was not against conscience before he came
to the court.
In Highwaymen case, two robbers were partners in
their own way. Due to a disagreement in shares one of
them filed a bill against another for accounts of the profits

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of robbery. Courts of equity do grant relief in case of

partnership but here was a case where the cause of action
arose from an illegal occupation. So, the court refused to
help them.
This maxim has application on the following cases.
(a) Specific performance:
If the plaintiff has been guilty of undue advantage
the court of equity will refuse the specific
performance of a contract.
(b) Illegality:
Where the parties to an illegal agreement appear
before the court of equity for division of their
respective shares towards the property obtained. It
is revealed to the court that they have obtained the
property by robbery, equity will refuse to give relief
to any party.
(c) Fraud:
In case of fraud, equity will not grant relief to a
party who has committed fraud.
(d) Benami Transaction:
Benami transaction is the purchase of real property
by one person in the name of another. In such
transaction the real owner is not allowed to recover
the property.
(e) Minor’s Misrepresentation:
Where a minor beneficiary fraudulently concealing
his age and obtains a an amount of money from his
trustee which he was entitled to get only at the age
of majority, such minor will be refused to get such
amount of money from the court of equity at his
attaining the age of majority.
5. Delay Defeats Equities:
Another Latin term in this regard is means “Equity
aids the vigilant and not the indolent”. So, if one sleeps on
his rights, his rights will slip away from him. Legal claims
are barred by statutes of limitation and equitable claims

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may be barred not only by limitation law but also by

unreasonable delay, called laches.
Once the party knows they have been wronged, they
must act relatively swiftly to preserve their rights.
Otherwise, they are guilty of laches. Laches is a defense to
an action in equity. The maxim means that equity requires
that those who wish to seek its assistance must move with
speed to do so. Equity requires that a party whose rights
have been infringed should not delay for too long without
seeking to move remedy for infringement. If the party
delays without seeking remedy, he will be said to have
slept upon his rights and therefore not worth the favors of
equity. In the words of Lord Camden in the case of Smith v.
Clay (1976):
“Equity has always refused its aids to stale
demands where a party has slept his rights for a
great length of time. Nothing can call forth this
court into activity but conscience, good faith
and reasonable diligence where these are
wanting the court passive and does nothing”
A court of equity has always refused its aid to stale
demands, where a party has slept on his right and
acquiesced for a great length of time. Nothing can call
forth this court into activity, but conscience, good faith,
and reasonable diligence; where these are wanting, the
Court is passive, and does nothing. Delay which is
sufficient to prevent a party from obtaining an equitable
remedy is technically called “laches”2.
A person who seeks an equitable relief must do so
within reasonable time. The very maxim was applied in
the Leaf v. International Galleries case where the claimant
bought a painting of Salisbury cathedral innocently
described by the seller as genuine constable. Five years
later, the buyer discovered that it was nothing of the sort
and claimed the equitable remedy of rescission. The court
held that the delay had been so long and thus the plaintiff
was described to have slept on his equitable remedy
6. Equality is Equity:
2
Unreasonable delay in asserting a claim, which may result in its dismissal.

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Plato defined that “If you cannot find any other,

equality is the proper basis.” This maxim, which means
that as far as possible equity would put the litigating
parties on an equal level so far as their rights and
responsibilities are concerned. In this regard Justice Fry
said, “When I say equality, I do not mean equality in its
simplest form, but which has been sometimes
called proportionate equity.”
This maxim means that as far as possible equity
would put the litigating parties on an equal level so far as
their rights and Liabilities are concerned. Under this
maxim equity will treat all members of a class alike. Those
under a liability will be compelled to share such liability
either equally or proportionally, according to the
circumstances of the particular case. While the members
of a class possessed of a common right will be given the
benefits accruing therefrom either equally or
proportionally.
Application:
This maxim is applied in the following situations:
(a)Equal Distribution of Joint Funds and Joint
Purchases.
This maxim applies to the cases of more than one
seller or purchasers. If loss occurs, it would be
distributed proportionately among them up to the
extent of their share in proceeds. If Court imposes
fine, all of them will contribute equally. If one pays
the whole of fine, may recover the balance of fine
from other but proportionately.
(b) 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.
7. Equity Looks to the Intent rather than the Form:
The maxim means that equity concentrates on the
substance of a transaction, rather than its form. Thus, it

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may hold that a trust has been created even though the
word “trust” has not been used.
Equity will not permit justice to be withheld just because of a
technicality. It means that
equity enforces the spirit rather than the letter.
The Courts of equity do not disregard the words used
in a written document, but they give effect to what was
the intention of the parties. One classic instance was the
mortgage. Equity insisted on treating a transaction in
which land was made security for a loan as a mortgage,
however, it might be described. Similarly, the use of the
word “trust” is not required for a case in which some
property is transferred to one person for the benefit of
another.
The Common Law was very rigid and inflexible, it
could not respond favourably to the demand of time. The
Common Law regarded the form of a transaction to be
more important than its substance. It looked to the very
letter of the contract and not the intention behind it. On
the other hand, Equity looks to the spirit not to the letter,
it looks to the intention of parties and not to the words.
The application of the maxim can be seen in the
following instances:
a) Late Performance of Contract of Sale of Land:
In case of sale of land, if a party fails to
complete it within the time fixed for it, he is at
Common Law, in breach of the contract, but equity
does not take this rigid attitude. It allows a
reasonable time to the party to complete it.
b) Trust:
A person transfers his real property to another
by saying in the deed of transfer,
1) “I hope that the income of this property would
be used for the benefit of my grandchildren;”
2) “I request that the income of this property
should be used for the benefit of my
grandchildren;” or

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3) “I recommend that the income of this property

should be used for the benefit of my
grandchildren;”
To the Common Law the transferee of the
property is the legal owner and it is not obligatory
upon him to use the income of the property to the
grandchildren of the transferor or not. This is because
the Common Law did recognize a trust. While the
court of equity would treat it a trust and will obliged
the transferee not to use the income of the property
for himself instead the equity would compel the
transferor to use such income for the benefit of the
beneficiaries, i.e. the grandchildren of the transferor.
Where “A” asks “T” to buy some land in his own
name and use the income of the land for the minor
grandchildren of “A”. According to the rules of equity
in this situation the transaction would be termed and
treated as a trust even if “A” has not used the term
“trust” in his instruction to “T”. In this case the
ownership of “T”, the trustee is legal ownership while
the ownership of the grandchildren i.e. the
beneficiaries is an equitable ownership. This type of
trust is called “Precatory Trust”
c) Relief in regard to Mortgages:
Where a person borrows money from another
and transfers his immovable property to the lender
as security for the repayment of the loan the
transaction is called “mortgage” In this transition the
borrower i.e. the transferor is known as “mortgagor”
while the transferee i.e. the money lender is termed
as “mortgagee”. The mortgagor has a right to obtain
his property back by paying off the debt and his this
right is called his right of redemption. The
mortgagor’s right of redemption is the invention of
equity.
8-Equity considers done that which ought to be
done:
Where one party has incurred an obligation to do
something for the other but have not yet performed the
obligation, the equity presumes and act as the obligation

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has been performed b such person even if such person

has not performed the obligation.
Illustrations:
a) A seller and buyer have entered into a contract of
sale of a house, however, the property has not yet
been transferred from the seller to the buyer. During
such transitory period the buyer acquires an
equitable ownership of the house although he will
become the legal owner when the house would be
transferred to his name. Thus, if either party fails to
proceed with the contract, the injured party has the
option to claim for damages or specific performance.
b) If “A” makes “T” trustee and pays him 500,000
Rupees to purchase a 10 marla plot as well as a new
Toyota Fielder car for the benefit of his t0w children.
“T” does not purchase the plot and the car and by
the time, “B” dies leaving, by way of a will, all
immovable properties to his son “S” and all his
movable property to his daughter “D”. The question
in such a situation would be that who is entitled to
get 500,000 Rupese? Equity in such a case would
presume that the land and the car which ought to
have been purchased have been purchased (even if
they have not been purchased). Therefore, out of
500,000 Rupese the amount equivalent to the price
of 10 marla plot would be awarded to the son of the
deceased, “S”. While the amount equivalent to the
price of a Toyota Fielder car would be awarded to his
daughter, “D”.
a) Walsh v Lonsdale (1882) 21 Ch D 9, CA:
An agreement to enter into a lease has been
treated as equivalent to a lease and the parties’
rights and duties have been ascertained as if the
lease had been actually executed.
b) Industrial Properties (Barton Hill) Ltd v
Associated Electrical Industries Ltd [1977] QB
580; [1977] 2 All ER 293:

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In this case “A” agreed to sell property to “B”,

but a transfer was never registered. “A” thus
remained the legal owner while “B” was equitable
owner. “B” leased the property to C and a ‘lease’
between “B” and “C” was entered into. “C” defaulted
under the lease, and “B” sued “C”. Since “C”
discovered that “B” was not the legal owner,
therefore, he denied his liability to “C”. The Court
held that even though the ‘lease’ was defective at
law it was nevertheless an agreement for a lease.
Thus, C was found liable to “B”.
c) Specific Performance of the Contract of Sale of
Land:
The maxim also applies to a contract for the sale of
land capable of being specifically enforced. X
contracts to sell his land to Y. the land thereafter
should be transferred to Y and Y should pay
purchase money to X. Y having become owner of
the land, may sell, lease, or gift away the property.
9. Equity Imputes an Intention to fulfill an
Obligation:
Equity considered and estimated acts of parties. Thus
where a person is under an obligation to do a certain act,
and he does some other act which is capable of being
regarded as an act in fulfillment of his obligation. In other
words a person is presumed to do what he is bound to do.
For example of a debtor leaving a legacy to
his creditor equal to or greater than his obligation. Equity
regards such a gift as performance of the obligation so the
creditor cannot claim both the legacy and payment of
the debt.
In Sowden v. Sowden, a husband covenanted with the
trustee of his marriage settlement to pay to them £50,000
to be laid out by them in purchase of land in a particular
area D. He, in fact, never paid the sum, but after marriage
purchased the land at D in his own name, for £50,000. He
died and could not bring the land into settlement. Equity
courts construed that he purchased land to fulfill his
obligation.

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i) Doctrine of performance and satisfaction

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

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A defective execution will always be aided in equity under

the circumstances mentioned, it being the duty of every
man to pay his debts, and a husband or a father to provide
for child.
Recognition
i) The Succession Act- Presumption against satisfaction
is mentioned here. In Hasanali v. Popatal, a testator, who
had a sum of Rs 9000 as deposit from his brother, gave to
is brother a legacy of Rs 9000 and it was held that the
brother was entitled to both, the legacy and his deposit.
But as decided in Rajmanuar case where a will contained a
clear indication that the legacy was meant as a
satisfaction of the debt due to X, X could not claim both as
the section explains.
ii) The Trust Act- Where a person contracts to buy
property to be held on trust for certain beneficiaries and
buys the property accordingly, he must hold the property
for their benefit to the extent necessary to give effect to
the contract. Equity thus imputes an intention to fulfill an
obligation.
The doctrine of advancement does not apply in
Bangladesh.
9. Equity Acts in Personum:
At the Common Law a judgment of damages was
enforced against the property of the defendant. The assets
of defendant could be attached in order to execute the
decree awarded to the plaintiff.
As against this, in equity, remedies attached to the
person of the defendant, consequently, the decree of a
court could only be executed by compelling the defendant
to pay off the due of the plaintiff. In this regard the
plaintiff could be imprisoned if he would not pay off the
due of the plaintiff against him, however, the assets of
defendant could be attached in order to execute the
decree.
One effect of this maxim, in many cases, is to render
the location of the property immaterial, where the court
can acquire jurisdiction over the person of the defendant.
Equity has the power to decree the conveyance of land

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outside of the territorial jurisdiction of the court. Equity

could grant its remedies provided the defendant was
within the jurisdiction of the court, even if the property in
question was outside the jurisdiction of the court.
Illustrative Cases:
a) Richard West and Partners (Inverness) Ltd v
Dick [1969] 2 Ch 424; [1969] 1 All ER 289:
Specific performance of a contract for the sale of land
located in Scotland was ordered because the parties
were within the jurisdiction of the English court.
b) Chellaram v. Chellaram [1985] Ch 409; [1985] 1
All ER 1043:
The court held that London-based trustees of shares in
a company, with assets in Africa, were capable of
removal by an English court, notwithstanding the
foreign location of the trust property.
10- Equity Imputes and Intention to fulfil an
Obligation:
Where a person has incurred, under a contract, an
obligation to do one thing, however, does another, equity
will presume that he has done such other act for the
fulfilment of his obligation under the contract. In other
words a person who has undertaken an obligation, will,
through his later conduct be interpreted as fulfilment of
that obligation.
Sowden v Sowden [1785]:
A legally binding agreement made between the parties
under which the husband and wife agree to put certain
property into trust for the benefit of themselves and their
children. Husband promised to pay £2000 to trustees with
which they would buy property to provide income for his
wife in the event of his death. In fact, husband had bought
a property after their marriage for £2150. After the death
of the husband the wife was held to be entitled to her
claim of the said property. It was presumed that the
husband bought the property in the performance of his
obligation under their marriage settlement.

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11- Equity will not Permit a Statute to be used as an

Instrument of Fraud:
Meaning of the Maxim:
Equity will not ignore statutory requirements but will do so
only where it would be unjust to allow a party to rely on a
statutory requirement to another’s disadvantage of
another person. A person is prevented from relying on the
absence of statutory requirements if doing so would result
in unfairness to another.
Illustrative Case:
Bannister v Bannister [1948] 2 All ER 133: A conveyed
house to B. B agreed orally to allow A to live in it rent free
for as long as she wished. The contract between them was
not in writing. B attempted to evict A, claiming that A had
not fulfilled the statutory requirements of furnishing a
tenancy agreement. Appeal: The agreement was
enforceable notwithstanding the absence of requirement
of writing.
12- Where there is equal equity, the law shall
prevail:
When two parties claim the same property and the
court cannot decide that one of them has a better right to
the property, the court of Equity will leave it to the court
to decide. This maxim operates where there are two or
more competing interests, one legal and the other
equitable. Where the claims of both parties are fair and
meritorious, precedence will be given to the legal interest.
This maxim was developed in connection with
interests in lands. When a purchaser acquires property
bona fide without notice of a defect in the vendor’s title,
the equities are equal and the legal estate will prevail. If
the purchaser takes title with notice of the defect, the
earlier title, if valid, will prevail. The force of this maxim
has largely been displaced by legislated systems of land
title registration.
Illustration:
A company that had been collecting sales tax on
behalf of the government found that it has overtaxed the
customer and overpaid the government by two percent.

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The company appealed for a refund, however, the court

refused the refund to the company on the ground that the
money belonged to the customers of the company and
that the company had no better right to the money than
the state.
13- Where there equal equities the first in order of
time shall prevail:
The maxim means that when two parties both have a
right to possess a same property, the one who acquired an
interest first should prevail in equity.
This maxim is concerned with the priority that is to
say which of interests prevails in the time of confl ict.
The general rule, is that interests take eff ect in order
of their creation, but, as regards equitable interests,
these may be defeated if a bona fide purchaser acquires a
subsequent legal estate without notice of the
equitable one. The position of the bona fi de
purchaser of a legal estate is stated in the case of Pilcher
v Rawlins. For the purchaser of the legal estate to gain the
priority, it is the must to show off that he is bona
fi de. Moreover, the purchaser would be interrogated
to the valuable consideration where he has given the
opportunity to his bona fi de and to prove the presence
of the absence of notice
Illustration:
A man advertises a small boat for sale in the classifie
d section of a newspaper. A person came and offered him
$20 less than the demanded price upon which the seller
agreed. It was agreed upon the parties that the price
would be paid after a week time and the buyer will take
the boat. Meanwhile another person came and agreed to
buy the boat for the demanded price. The seller agreed to
sell the boat to him. Now question arises who owns the
boat. The law of contract as well as the rules of Equity
agree that the first buyer is entitled to get the boat.

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Lecture Notes Maxims of Equity 27

Equity (Quaid-i-Azam University)

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Lecture Notes on Equity 2

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The Origin and Development of

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created a common law by drawing on customs across the

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law countries, legislation is seen as the primary source of

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review function to the Lord Chancellor and it was from that

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Act 1873 during the 17th to 19th centuries the

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The Nature and Role of the Maxims of Equity:

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officer, it was held that if the law gives a man a right, he

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equity interferes to provide remedy to C. Since the wrong

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under which a defendant could be compelled to perform

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persons had got registered that document while

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contract voids the contract, he has return the benefit

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Lecture Notes on Equity 15

of robbery. Courts of equity do grant relief in case of

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Lecture Notes on Equity 16

may be barred not only by limitation law but also by