UNIT 1 HISTORY OF EQUITY
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main content
3.1 Law and equity
3.2 Conscience
3.3 Difference and conflict
3.4 Equity and the common law in the narrow sense
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignments
7.0 References / Further Reading
1.0 INTRODUCTION
This is an introductory unit. It introduces us to the law of equity and how it was developed in the court of Chancery in England. There is a wealth of literature on equity jurisprudence; its origin, development and the part it has played in those countries having the common law as the founda- tion of their legal systems. From its origin to the present period, equity has been kept under strict and constant surveillance. Its origin and development have been emphasized and its main princi- ples have been amplified all in a determined attempt to ensure that the principles of equity do not fall behind society’s immediate needs and aspirations. Equity came to mitigate the rigours of the common law.
2.0 OBJECTIVES
By the end of this unit you should be able to:
(i) Trace the origin of equity;
(ii) Explain the notions of conscience; and
(iii) Differentiate Equity from the common law.
3.0 MAIN CONTENT
3.1 Law and equity
Definition
The word ‘equity’ literally means fairness. Equity is defined in the Oxford Advanced Learner’s dictionary 6th edition as “a system of natural justice allowing a fair judgment in a situation where the existing laws are not satisfactory”. To a layman, the question ‘what is equity?’ does not create any difficulty. It simply means right doing, good faith, honest and ethical dealings in transactions and relationships. Conception of the term ‘equity’ in this sense is usually classified as equity in its most popular sense, which is of no juristic significance.
According to Jegede, for obvious reasons, no municipal legal system, however highly developed can take cognizance of or regulate all acts that may be inconsistent with this broad conception of equity. Moreover, the demands of the term equity in this sense are not capable of enforcement, for they do not create or produce any legal obligation. Yet the use of the term equity in this sense is not peculiar to the unlearned in the science of law. However, the lawyer takes a different and more cautious view of the term ‘equity’ when it is used in a limited but legal sense and clothed with the cloak of juristic significance.
Juristic Sense of Equity
The juristic sense of the term ‘equity’ may be subdivided into two, one complementary to the other and both affecting the administration of law and justice by recognized judicial tribunals.
In the first place, there is the general juristic sense of the term ‘equity’. Here ‘equity’ means the power to meet the moral standards of justice in a particular case by a tribunal having discretion to mitigate the rigidity of the application of strict rules of law so as to adapt the relief to the cir- cumstances of the particular case or a liberal and humane interpretation of law in general, so far as that is possible without actual antagonism to the law itself.
In the second place, there is the technical sense of the term ‘equity’. Equity in this sense means a special and peculiar department of the English legal system which was created, developed and administered in the Court of Chancery. This may be a satisfactory definition of English equity before the Judicature Act of 1875 which provides for the administration of law and equity by the same tribunal. According to Maitland, in his book “Equity (Brunyate Ed.) 1949,” prior to 1875,
‘Equity is that body of rules which is administered only by those courts which are known as Courts of Equity.’
But after 1875, it is no longer satisfactory to define equity in terms of a court, that is, the Court of Chancery as distinct from the other superior courts. The Judicature Act of 1875 has amalgamated all the superior courts into a Supreme Court of Judicature administering both the rules of equity and the rules of common law. Thus, ‘Equity now is that body of rules administered by our Eng- lish courts of justice which, were it not for the operation of the Judicature Acts, would be admi- nistered only by those courts which would be known as Courts of Equity.’ The extent to which the same definition may be applied to the technical rules of equity received into the Nigerian Le- gal System will be discussed later.
At the beginning of the nineteenth century, the court structure in England and Wales was in a mess. The population was subject to the jurisdiction of a dual system of superior courts. On the one side were the three ‘common law’ courts, viz – the Common Pleas, the Queen’s Bench and the Exchequer of Pleas. On the other hand was the Court of Chancery. The three common law courts had grown up under the authority of the English kings during the Middle Ages. They were known as courts of ‘common’ law because according to royal propaganda, that law applied to all subjects and the whole realm.
Only an historical explanation can be offered for why there were three such common law courts with substantially overlapping jurisdictions. They could and often did give different answers to the same questions and there was no reliable method of ironing out those differences. But rules based on judgments given in these common law courts and even the judgments themselves were in some cases being denied or added to in the Chancery. This was not by way of appeal. The common law judgment was not formally set aside or reversed; the Chancery, while leaving it in- tact, simply issued an order which was inconsistent with that of the common law judges. The constitutional position was that this second order prevailed, leaving the common law answer as an overshadowed solution to the problem.
These Chancery orders had come to be made by applying a body of doctrine and principles in- vented initially by the Chancellor and later by his subordinate the Master of the Rolls. These rules, principles and doctrines of the Court of Chancery, bearing this complex relationship with the doctrines of the common law, were to be known as Equity. This body of law did not, however, cover the entire area of business which the common law courts had taken as their jurisdiction. It was essentially a ‘private law’ jurisdiction, dealing with matters raised by private individuals, protecting their private interests. There was no involvement with the common law of crime.
The principal focuses of attention were the laws of property and contract. Only incidentally to these was it to develop a law of private wrongs. Equity was not the only jurisdiction exercised in the Chancery, but it was the one which was to leave the greatest impression on the development of the legal system.
The system of justice administered by the early Chancery was based on common law rules, though the rules were administered in a more liberal and more humane manner with a view to achieving the end of justice. This is borne out of the fact that early petitions were in respect of indubitable legal wrongs, assaults, batteries, imprisonments, disseisins and a variety of outrages inherent in the feudal society.
These wrongs were cognisable in the common law courts, but were presented before the Chancery in form of petitions because of the inflexible position of the common law courts in respect of writs; and because of certain ills of the society which made it difficult for commoners and people of poor means to obtain justice from the common law courts.
3.2 Conscience
Jurisdiction
The jurisdiction of the Chancery in granting reliefs to the various petitions was based on reason, conscience and justice in the administration of law. Chancery had a reputation as a court administering an individual discretionary justice in contrast to the inflexible monoliths of the common law. Whether this was perceived by all litigants in Chancery (or even common law) may be doubted.
Much of the jurisprudence of the court has been concerned with working out the detailed ad- ministrative implications of having taken an earlier moral stance. Many of these decisions, like much administration, have little reference to individuated notions of right and wrong. But the tradition is fundamentally well based and it is impossible to read Equity cases of any period without being aware of it.
Pre-17th century Chancery jurisdiction was vague and elastic. As noted earlier, Chancery jurisdiction originated in the prerogative of the King to dispense extra-ordinary justice on the grounds of reason and conscience, where the ordinary processes of common law were inadequate or defective. The suitor or the petitioner humbly prayed in his petition to the Chancellor for the exercise of the ‘King’s Grace’. The early Chancellor was a church-man, versed in both the canon and the Roman law. From his training and background, he was well qualified to deal with appeals to ‘Grace, Charity and Conscience’; it was an elastic jurisdiction, the limit of which was difficult to define.
The early history of the jurisdiction is obscure. The history which leaves traces began at the end of the Middle Ages in the early 16th century. By that date, it can be said that the common law courts had in some areas become inadequate. Outside the law of tort, they had shown an insufficient ability to adapt to new claims, and the set forms of writs particularly restricted the development of new issues and defences.
There was also dissatisfaction with common law remedies. Despite having taken the inspired decision to enforce rights of property in land by actually delivering it up by force, if need be, to its owner, it enforced other rights, including property in chattels, as well as all contract and tort claims by a money judgment.
Finally, common law pleading had become both overly complex and also a monument to sin- gle mindedness in its stubborn refusal to allow more than one issue to be tried at a time. Re- form of these defects by statute was not seen to be an answer. Disappointed parties petitioned the King to get them out of the mess into which his common law courts had put them, and to receive the ordinary justice, the fair and commonsense solution, the equity, which they were otherwise denied.
According to Jeffrey Hackney in his book “Understanding Equity and Trusts”, p.17-18, these petitions came to be heard by the King’s greatest officer of state, the Chancellor. By the early 16th century, he was giving decisions in his own name and had established a jurisdiction over freehold land. It soon became a trademark of Chancery thinking to emphasize ‘good faith’
and to appeal to notions of ‘conscience’. The avoidance of unconscionability may be the central informing idea. These notions of conscience which do not figure prominently in the articulation of common law rules are familiar in the canon law. It is possible that the ecclesiastical background of early Chancellors accounts for this emphasis.
He explained that, Step by step they set about plugging the loopholes left by the common law’s shortcomings. Their pleadings were more flexible. They gave orders to parties to do things other than deliver up land or pay sums of money and so laid the foundation of the modern law of specific performance of contracts and of injunctions. They relieved against accidental hardship and certain kinds of oppressive behaviour. They allowed the creation and transfer of a new kind of intangible property, the right to payment of a debt, which developed into the branch of law known to us by the archaic name of the assignment of choses in action (‘things protected only by litigation’). Most dramatically of all, they invented the ‘use’, later to be reborn as the modern trust. By this device, they would order that property held on a common law title by Y, as his own, should rather be administered by Y only for the benefit of X, the beneficiary of the use.
This would often be in consequence of a voluntary undertaking by Y, but sometimes it would not. Of greater significance still is that even if there were a voluntary undertaking, it need not have been to X herself, but to a third party, often a relative of X, who had conveyed the property to Y. Uses were not contract. In this way, Chancellors supported, supplemented and corrected the common law.
The principles of conscience are, however, vague and uncertain and unless they are guided within well-defined limits, they may soon lead to a system of justice based solely upon indi- vidual and autocratic discretion. The vague and extensive jurisdiction of the early Chancery could not for long resist some of the inflexible attitude of the common law lawyers, some of whom later presided over the Chancery. Through their influence and the improved reports of equity cases in the middle 17th century, Chancery division lost its flexibility and adopted the common law system of precedent.
Henceforth, equitable rules have since become as fixed and systemized as the common law rules. Instead of abiding by the dictates of conscience and the society’s notions of justice and fair play in the exercise of its equity jurisdiction, the Chancery, from the Chancellorship of Ellesmere (1595-1617), began to apply the doctrine of judicial precedent.
SELF ASSESSMENT EXERCISE 1
What do you understand by the term ‘equity’?
3.3 Difference and conflict
According to Jeffrey Hackney (op.cit.), pp. 18-19, the Chancellor’s decisions had begun as individual decisions solving individual grievances or simply dilemmas posed by conscientious trustees wanting to know what to do. There were ‘suits’ in the Chancery, not actions, and the Chancellor gave ‘decrees’ not judgments. The contrast with the regular court system was enhanced by the absence of a jury and by the Chancellor’s practice of not taking oral evidence. But a combination of repeated circumstance and a desire to treat like cases alike was ultimately to drive the Chancellor into developing a system of rules: equity was to become Equity.
The early days of this development were not marked by hostility from the common lawyers, but in the 16th century it began to brew. Cardinal Wolsey, one of Henry VIII’s powerful Chancellors, had in the 1520’s caused much resentment by his encroaching and aggressive behaviour. The so- called ‘common’ injunctions denying litigants even the right of access to common law courts were also a cause of much friction. Matters came to a head in the early 17th century when Coke, then Chief Justice of the King’s Bench, challenged the right of the Chancellor, Ellesmere, to override common law results. Coke’s appeal to the King in 1616 failed. From that date it has not been questioned that when the rules of Equity and common law conflict, it is the rules of Equity which shall prevail. This will be considered in detail in Unit 3 of this Module.
3.4 Equity and the common law in the narrow sense
There are two usages of ‘common law’: the wider usage, meaning the whole of the royal law, includes Equity; the narrower usage, focusing on the contrast, excludes it. If there was resentment about the divergence after 1616, it did not surface. Relations between the two systems were on the surface amicable, much aided by the diplomatic formulations of equitable rules which hid the substance of what was going on: ‘we are not overturning the common law rules; all we are saying is that while Y may own at common law, X owns in Equity’, so disguising the fact that X may be happy – Y may not.
Equally effectively, decisions were often attributed to the demands of Equity as if it were some creature with a will of its own, some personified virtue, some Marianne, pulling the strings of the judicial marionettes.
Marianne is an image of a woman personifying the French republic, e.g. on French coins, usu- ally depicted in a light flowing robe and wearing the Phrygian cap of liberty. (Marionette is a puppet operated by means of strings attached to its hands, legs, head, and body).
4.0 CONCLUSION
The early history of the jurisdiction of equity is obscure. The history which leaves traces began at the end of the Middle Ages in the early 16th century. By that date, it can be said that the common law courts had in some areas become inadequate. Outside the law of tort, they had shown an insufficient ability to adapt to new claims, and the set forms of writs particularly restricted the development of new issues and defences. Equity, therefore, came to relieve the rig- ours of the common law.
5.0 SUMMARY
This unit has introduced you briefly to the law of equity. You should now be able to: trace the origin of equity; explain the notions of conscience; and differentiate Equity from the common law.
6.0 TUTOR-MARKED ASSIGNMENT
How is the conflict between common law and equity resolved?
7.0 REFERENCES / FURTHER READING
Oxford Advanced Learner’s Dictionary, 6th edition
Hackney Jeffrey, (1987) Understanding Equity and Trusts; London: Fontana press
Jegede M. I. (2007rep.) Principles of Equity; Ibadan: Unique Design/Prints