Nature of Equity
Equity is a body of law and procedures which developed side by side with common law and statute law. It originated with the Court of Chancery. It sought to mitigate the harshness of the early common law which was as set out in separate chapters, rigid and such as to produce arbitrary unjust results in certain cases.
Equity is synonymous with conscience, fairness, even-handed dealing or impartiality. It emphasizes the consonance of equity with common sense and fairness. Equity has always been more flexible and correspondingly more discretionary and tailored to circumstances than common law.
Equity evolved as a modification and supplement to the common law. It rivaled the common law but did not seek to destroy it.
The maxims of equity are epitomes or short statement of key principles of equity. See separately the chapter on the maxims of equity.
Court of Conscience
Equity as a court of conscience was not bound by the rigors of common law. The early chancellors had ecclesiastical backgrounds and were trained canon lawyers. They dispensed justice in accordance with principles of conscience and laws of God.
Some of the earlier chancellors considered themselves keepers of the King’s conscience. In the 15th century the chancellors took the view that the law should accord the law of God.
Equity was said to be based on reason, right and justice and conscience. Chancellors examined the defendant personally. Where the common law was producing results contrary to the law of God the chancellor assumed the right to prevent its operation to prevent hardship.
The jurisdiction was discretionary. It was exercised personally against the defendant and not against his assets as such. Witnesses were examined both orally and in writing.
Bills and petitions which were characteristic of courts of Chancery originated in petitions and requests to the King and Council for intervention in administrative matters. The subpoena which is an important equitable remedy procedure had its origin in common law actions
Proceedings in Chancery were commenced by presenting a bill. A bill is a petition which is originally drawn up in Anglo French. By the reign of Henry V, a petition was commenced by a bill in writing. The defendant would be obliged to attend court personally and be examined. He was obliged to do so under the writ of subpoena. The defendant who failed to comply with the writ might be arrested and his assets might be sequestered.
The Chancellor determined the facts of the case without a jury. A decree was issued declaring the position or restraining a person from a particular course of action or otherwise. The Chancellor gave remedies in relation to matters where there was no appropriate common law remedy.
In some cases the common law rules of evidence were rigid and unforgiving. A error in pleading could destroy an otherwise just the case. The approach of Chancery was to look at substance over form.
It appears that seignorial and manorial courts may have exercised equitable type jurisdiction by analogy with the common law jurisdiction.
Common law remedies were narrow. Damages might not be an adequate or sufficient remedy in many cases. Chancery intervened with orders of specific performance.
Equity contributed new remedies to English law. Where common law remedies were not sufficient, equity supplemented them with more flexible remedies. This is seen clearly in the remedies of specific performance and injunction which are available where damages would be an inadequate remedy.
Equity introduced new procedures including particular discoveries. It enforced new rights and institutions in particular the trusts.
At common law a contract required a sealed document or performance of an obligation. The Chancellor was concerned with the good faith nature of the underlying obligation and was prepared to enforce certain agreements without common law formalities.
The Chancellor gave relief in matters relating to fraud and unconscionable dealings. He might prevent the operation of a common law judgment where one party had engaged in equitable fraud. By the end of the 15th century the rivalry between the common law and equitable courts intensified.
The King was the fountain of justice. He had a residuary duty and jurisdiction to ensure justice was done. Petitions might be made directly to the king when justice had been denied or the requisite remedies did not exist.
The King’s Council heard petitions for relief in the early period. The Council included the chancellor and other royal judges.
Certain writs existed which were more flexible than the general common law writs and were early styles of equitable procedure. A writ was available to reopen a judgment in certain cases under equitable principles.
The common law courts derived their authority directly from the King. The chancellor’s rights derived from the King’s residuary jurisdiction to do what was right. This facilitated the application of some equitable principles in common law courts. However, the courts of Chancery developed independently from the King’s chancellor.
Chancellors originated in the early medieval period. The Chancellor’s initial duties included acting as the King’s secretary, chaplain to the King and keeper of the royal seal.
In the early days the Chancellor dealt with petitions to the King. Most early Chancellors were ecclesiastical. The practice of appointing ecclesiastics ended with Cardinal Wolsey who was succeeded by Sir Thomas Moore, a common lawyer. After that very few almost all chancellors were laymen.
Common law equitable type principles were also expressed in other parts of the law. There was an early type of specific performance existed by way of the common law action. Writs of prohibition were analogous to an injunction. Another writ was equivalent to the equitable remedy of injunction.
13th to 15th Century
In the 13th and 14th centuries the common law courts developed and became independent of the King and government. The Chancery developed and separated from the King’s Council and from the common law courts.
The Chancellors’ role as King’s secretary involved drawing up documents to which the royal seal was affixed to authenticate them. Writs were issued from Chancery. Accordingly the chancellor was directly involved in the form of writ. By the 13th century the Chancery had become a separate department. The Chancellor, however, was linked to both. He sat on the King’ Council. He issued writs on the common law side and had certain common law jurisdiction in limited areas.
The common law jurisdiction of the chancellor was referred to as Latin jurisdiction and his equitable jurisdiction as English jurisdiction. Common law court records were in Latin and those concerning equitable jurisdiction were in English.
Where a claimant could not have obtained a writ he could petition the king for a remedy. Urgently petitions were passed to the King and his Council. The Chancellor heard petitions and a decree was issued in the name of the Council. By the late 15th century petitions, came to be presented directly to the Chancery.
The common law became particularly rigid in the 14th and 15th century. Procedural technicality predominated and justice might be readily denied.
In the 13th and 14th century equitable jurisdiction was exercised by the itinerant common law courts, common law justices of the general Eyre. Bills in Eyre petitioned for justice and including matters for which common law writs existed.
Cardinal Wolsey, Henry VIII’s Chancellor created new courts of equity. The courts granted injunctions which heightened conflict with the common law courts. An injunction might be granted to prohibit a claimant taking an action at law.
A bill signed by the claimant’s counsel commenced proceedings. A subpoena ordered the defendant to attend. Interrogations were administered to the defendant and witness. Witnesses were examined both orally and in writing.
The defendant could offer demurrer to the bill i.e. state that even if the matters claimed were true they did not warrant intervention. He could submit a plea which involved questioning jurisdiction. He could submit an answer which was equivalent to a defense.
During the Tudor and early Stuart period, the common law and equity were engaged in a struggle. Ultimately equity prevailed.
The conflict between the courts of equity and common law culminated in disputes between Lord Chief Justice Coke and Lord Chancellor Ellesmere. In a number of cases in the second decade of the 17th century, common law courts purported to declare equitable remedies in inoperative .
Lord Justice Coke refused to give hearing to counsel who had participated in equitable proceedings against judgments of common law courts. The Lord Chancellor appealed to the King James I. He referred the matter to his Attorney General Bacon and a group of lawyers. The latter decided in favor of Chancery.
In the 16th and 17th century equitable relief was extended. The equity of redemption and relief against penalties evolved. Relief was granted against fraud and mistake in an increasing number to a greater extent. The jurisdiction in administration of personal mistakes developed.
The Chancery was associated with the prerogative rule of the Stuarts. The Chancellors Ellesmere and Bacon supported the royal prerogative. Following the English civil wars the Commonwealth Protectorate demanded abolition of the Chancery. Ultimately this did not occur and following the Restoration, the proposals were abandoned.
By the latter part of the 17th century the discretionary elements of the Chancery jurisdiction were beginning to be exercised on the basis of precedent rather than discretion. Jurisprudence became reasoned. Chancery reports cases were published the role of certainty was emphasized.
By the 18th century a mass of equitable rules and principles had developed and equity came to be a distinct system. It became focused increasingly on certain areas including trusts, certain property rights, administration of assets of deceased, specific performance and injunctions, guidance of infants, care of persons of unsound mind and certain bankruptcy issues.
Lord Hardwicke in the 18th century emphasised the principle that the courts of equity were banned by precedent.
Equitable remedies developed considerably in the 18th century. This included in particular the taking of accounts. By this stage equity was a standalone system in itself and had it begun to be more formalised.
By the 19th century the procedures and principles of equity have become more rigid. Legislation was passed to reform Chancery procedure.
The Vice Chancellor at the beginning of the early part of 19th century was conservative and during his tenure the Chancery became notorious for delay. Numerous judgments came to establish many of the principles of equity, including those referring to injunction. He affirmed that precedent was binding on the courts of Chancery.
By 19th century precedent played a greater role and the discretionary morality and conscience elements declined. Ultimately, Judicature Acts fused law and equity.
The Judicature Acts fused equity and law. In the case of conflict between law and equity the rules of equity generally prevailed. It is assumed that no new equitable interests or doctrines will be created at this stage.
In modern times this is likely to be seen as usurping the role of the legislature. The existing principles may be developed and refined. The modern courts do not regard themselves as entitled to invent new rules of principles of equity on the basis of conscience justice or fairness.