Duhaime's Law Dictionary


Equity Definition:

A branch of English law which developed hundreds of years ago when litigants would go to the King and complain of harsh or inflexible rules of common law which prevented "justice" from prevailing.

Related Terms: Common Law, Chancery, Ex Aequo Et Bono, Fraud, Clean Hands, Vigilantibus Et Non Dormientibus Jura Subveniunt, Ubi Jus Ibi Remedium, Ex Turpi Causa Non Oritur Actio, Equity Delights to do Justice, and not by Halves, Equitable Estoppel, Justice, Boni Judicis Est Ampliare Jurisdictionem

The second great branch of English law; a supplement to the common law.

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

"Equity is a roguish thing, for Law we have a measure know what to trust too. Equity is according to ye conscience of him yt is Chancellor, and as yt is larger or narrower soe is equity. Tis all one as if they should make ye standard for ye measure wee call a foot, to be ye Chancellors foot; what an uncertain measure would this be; One Chancellor has a long foot - another a short foot - a third an indifferent foot; tis ye same thing in ye Chancellors conscience."1

EquityIn Securities & Exchange Commission v Glass Marine, Justice Leahy of the United States District Court (Delaware) wrote:

"Few legal niceties bind a court of equity in its attempt to do right and justice. It functions through flexibility rather than rigidity, in framing its decrees, and it recognizes there is no limit to the various forms and kinds of specific remedy which it may grant, adapted to novel conditions of right and obligation, which are constantly arising from the movements of society.

"The Supreme Court has recently repeated2 that District Courts, in the framing of equitable decrees, are clothed with large discretion to model their judgments to fit the exigencies of the particular case."

But if equity has a crucial, softer and supplemental role in the law, it has no application in cases which are governed by some statute. This role has often been described by the reference to two basic principles, as aptly stated by Canadian judge Ritter of the Alberta Court of Queen's Bench in Seward:

"If there is an adequate legal remedy to the Plaintiff, then in my view I need not deal extensively with the equitable remedies claimed by the Plaintiff. This flows from the first equitable maxim, which indicates equity will not suffer a wrong without a remedy.

"It also flows from the second equitable maxim. The second equitable maxim is that equity follows the law. Where a rule, either of common or statute law, is direct, and governs the case with all its circumstances, or the particular point, a court of equity is as much bound by it as a court of law, and can as little justify a departure from it. Consequently, if there is an adequate legal remedy available to the Plaintiff I need not slavishly examine equitable remedies that might also be available to him."

Consider this observation of Justice (Lord) James Atkin (1867-1944):

"If, in 1815, the common law halted outside the banker's door, by 1879 equity had had the courage to lift the latch, walk in and examine the books."

An example of equity's importance in the development of English law is in the strict common law rules which could not recognize unjust enrichment. This form of legal relief was developed by courts which specialized in equity.

In fact, most legal historians hold trust law to have been the most important child of equity.

Law professors hold that equity acts only in personam.

The typical Court of Equity (also known as Court of Chancery) decision would prevent a person from enforcing a common law court judgment.

The kings delegated this special judicial review power over common law court rulings to a judge called chancellor, the court the Chancery. Later, this was too much work for a single judge and more judges were appointed, called chancellors.

The term Chancellor is still in use in England today and now refers to the British minister of justice.

Thus, a new branch of law developed known as equity, with their parrallel decisions eventually even gaining precedence over those of the common law courts, although not without some deep-rooted jealousies developing:

"Chancery had long been hated by common law lawyers (led by Edward Coke) because it took business from KIng's Bench and Common Pleas.... A member (of the House of Commons) said ... Chancedry ... is an inextrcable labyringhe nwherin reisdeth such a minotaur asd gourmandizeth the libert of all subjects whatever."3

In the Halsbury's Laws of England, equity is stated to have begun during the reign of Edward I, or about 1300 and:

"... because of deficiencies of the common law courts. Powerful litigants could, by bribery or intimidation of juries, render their proceedings abortive.

"In cases where the courts were thus at fault, petitions for redress were presented to the King .. and convenience required that these should be dealt with by a special tribunal ... the Court of Chancery."

The Court of Chancery has a rich history.

At first, its members were clergy or untrained judges, with decisions having no consistency whatsoever, based on a case-by-case basis on the judge's arbitrary exercise of his "conscience".

Thomas More, when he became Chancellor, finally insisted that all Chancery judges be selected from trained lawyers.

The Court of equity battled the common law courts for centuries until the split came to a head in 1615 and James I gave the equity court precedence, but not without creating tensions that would last for centuries. In 1769, in Perrin v Blake (1 Coll. Jurid. 283), Lord Mansfield wrote:

"If courts of law will adhere to the mere letter of law, the great men who preside in Chancery will ever devise new ways to creep out of the lines of the law and temper with equity".

In The Origins of Equity, F.. Maitland wrote:

"Equity was not a self-sufficient system. At every point it presupposed the existence of common law. Common law was a self-sufficient system.

"If the legislature had passed a short act saying 'equity is hereby abolished'. we might still have got on fairly well. In some respects, our laws would have been barbarous.... but still the great elementary rights ... would have been decently protected.

"On the other hand, had the legislature said 'common law is hereby abolished', this decree ... would have meant anarchy.

"At every point, equity presupposed the existence of common law."

In the 1870s, England and its colonies merged the courts but not the doctrines (in statutes called "judicature"). Although under the umbrella of a unified judiciary, where the principles conflicted, equity was stated to have precedence over the common law.

Ontario's initiative is a good sample, now known as the Courts of Justice Act (1990 RSO Chapter C-43; v. 2007), where at §96:

  • It gives equity rank over the common law ("where a rule of equity conflicts with a rule of the common law, the rule of equity prevails");
  • Merges the Courts by requiring that there shall no longer be a separate court for equity ("Courts shall administer concurrently all rules of equity and the common law"); and
  • Only federally-appointed judge, also known as "superior-level courts", may consider equity claims or grant equity relief ("only the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, may grant equitable relief, unless otherwise provided").

Equity had a good run by itself - from 1300 to about 1875.

A whole set of equity law principles were developed based on the predominant fairness, reason and good faith characteristics of equity as reflected in some of its maxims:

Many legal rules and doctrines, in countries that originated with English law, have equity-based law such as the first sparks of what is now family law, the rich law of estates and trusts and mortgages.

But equity has its obvious limitations, as Blackstone wrote:

"Law, without equity, though hard and disagreeable, is much more desirable for the public good than equity without law, which would make every judge a legislator, and introduce most infinite confusion, as there would be almost as many different rules of action laid down in our courts as there are differences of capacity and sentiment in the human mind." (I Blk. Comm. 62)

And these words from John A. Finch relating the answer of a great judge to the question, "What is the difference between the common law and equity?":

"Very little in the end.

"At common law you are done for at once.

"In equity you are not so easily disposed of.

"The former is a bullet which is instantaneous and charmingly effective.

"The latter, the angler's hook, which plays its victim before it kills him.

"Common law is prussic acid (cyanide), equity is laudanum."

In the 1876 Comic Blackstone, author Gilbert Beckett wrote:

"Law without equity is better than equity without law.

"And, therefore, though in law there is very often no equity, nevertheless there is no equity that has not sufficient law to make its name of equity a pleasant fiction."

REFERENCES:

Categories & Topics:


Always looking up definitions? Save time with our search provider (modern browsers only)

If you find an error or omission in Duhaime's Law Dictionary, or if you have suggestion for a legal term, we'd love to hear from you!