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Maxims of Equity Explained (With Application and Limitations)

Maxims of equity in Latin

Maxims of Equity: Maxims are pithy expression of general principle or rule. Maxims of equity are those principles developed by the court of chancery in its effort to ameliorate the hardship of common law. Through these maxims, the court of chancery found its way to escape the hardship of common law and provide fair and conscionable remedies where there is none.

There are majorly twelve of these maxims. Aside the major twelve, there are other sub-maxims which the court of chancery also employed while attaining the same end. But for the purpose of this article, we shall focus on the twelve maxims which are regarded as the majors. They also in one way or the other cover the end purpose of the sub-maxims.

Maxims of equity in Latin

Maxims of equity in Latin

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The 12 Major Maxims of Equity

1. HE WHO SEEKS EQUITY MUST DO EQUITY: this maxim means that any person who comes to the court of equity to ask for a remedy must be willing to submit to that which is required to do. The submission here refers to the person’s future conduct and not to the past.

Application of the Maxim

a. Doctrine of Marshalling: under equity, a person who has several means of satisfying his credit shall not be allowed to prejudice another whose credit can only be satisfied from one. This principle is applied where there is lending or property or mortgage.

By way of illustration: where A is entitled to satisfy his credit from two properties X and Y, and B is entitled to satisfy his own credit from property Y only, under equity, A would be required to proceed his satisfaction with property X while he leaves property Y for B to start collecting from. Under this setting, A has been required to do equity by being fair to a co-creditor in respect of one property, so that he shall not go with nothing. Where however, A refuses to leave property Y for B, equity will subrogate A’s interest with that of B and entitle B to start satisfying his credit from property X which is usually of higher means.

Law of equity notes pdf

Law of equity notes pdf

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Exception to the Application of Marshalling

Doctrine of marshalling will not apply where there is a third party encumbracer. This may arise where there is a third person who has an interest in the property or means from which parties are to satisfy their credit. In such a case, the court will devise other means to satisfy the parties.

b. Doctrine of Consolidation: where a person creates a charge or mortgage in respect of two distinct properties, the transaction is said to be consolidated. The rule therefore is that one of the properties in respect of which charge or mortgage is created cannot be redeemed to the exclusion of the other. In other words, both properties must be redeemed in order for the transaction to be deemed discharged.

By way of illustration: A mortgaged his property X and Y for a loan of two million naira, A should not be heard to pay one million naira in redemption of property X. the two million naira payment must be completed which entitles him to redeem X and Y property at once. Where A seeks to redeem a consolidated transaction, he must be willing to do equity by redeeming all so consolidated. The reason for this rule seems to be with respect of the value of the properties so consolidated, where one has a greater value than the other, considering the fact that a mortgaged property should be greater in value to the amount loaned.

Limitations to the Doctrine of Consolidation

The doctrine of consolidation has been abolished by section 17 of the property and Conveyancing Act and section 115 of Property and Conveyancing Law of Western Region. Therefore, now, consolidated mortgaged properties can be redeemed to the exclusion of the other.

What are the doctrines of equity?

What are the doctrines of equity?

Where the parties expressly agree that a consolidated mortgaged property can be redeemed to the exclusion of the other, the law shall give effect to their intention.

c. Doctrine of Election: this arises where a Donor makes a gift of his property to A and by the same instrument, gifts A’s property to B. under this setting, A has been put to election. He may elect either against or under the instrument. If he accepts the gift and surrenders his to B, he has elected under the instrument. Where he rejects the gift or refuses to surrender his to B, he has elected against the instrument. He may however, remedy this by paying B the value of that his property so gifted by the Donor.

For there to exist an election:

There must be a grant by the donor

A’s property so gifted to B must be belonging to A

The gift must be by the same instrument

The grant must be unequivocal

d. Illegal Loans: by the virtue of the Money Lenders Act of 1990, a money lender must be registered, otherwise he has no remedy. However, in LODGE V NATIONAL UNION INVESTMENT CO, the court held that a mortgagor who collected loan from an unregistered money lender must do equity by paying off the mortgage debt before he can redeem his property.

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2. HE WHO COMES TO EQUITY MUST COME WITH CLEAN HANDS: This implies that he who seeks to enforce an action in equity must have clean hands in respect of that transaction. Clean hands here imply that his conduct in respect of that transaction must be unimpeachable.

The conduct in question here is the parties’ past conduct in respect of the particular transaction which brings them to court. The parties’ personality or general good and bad conduct is immaterial.

What are the 12 maxims of equity? Explained

What are the 12 maxims of equity? Explained

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Application of the Maxim

a. Illegal contract: equity does not intervene when the subject matter of the suit emanate from an illegal transaction. In EVEREST V WILLIAMS (THE HIGHWAY MAN CASE), the parties brought question as to the fair share of their business transaction which was armed robbery. The court struck out the case for being impertinent, arrested the parties and awarded cost against the attorney.

b. Unclean Business: where the subject matter of a suit is an unclean business, the court of equity will not intervene.

c. Infant Misrepresentation: an infant who misrepresented herself to be of age and receives money from her trustee shall not be allowed to plead that she was an infant at that time in order to claim the money again. Overton V Bannister

d. Fraud: Equity does not intervene where there is element of fraud implicated against the plaintiff.

e. Breach of Restrictive Covenant in a Lease: a person who is in breach of covenant in a lease shall not be allowed in equity to succeed to succeed in an action against his landlord.

Limitations to the application of the Maxim

a. Public Policy: equity will intervene where public policy is at stake, even though a party’s hands are unclean.

b. General Conduct: equity is not interested in the general conduct of the parties.

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3. EQUALITY IS EQUITY: under this maxim. Equity seeks to ensure fair and equal share. Equity does not play favourite.

Maxims of equity explained with their applications and limitations

Maxims of equity explained with their applications and limitations

Application of the Maxim

a. Presumption of Tenancy in Common: equity abhors joint tenancy due to the rule of survivorship (jus accrescendi) which makes properties devolve to co-partners or co-owners instead of to the party’s estate. As a result, equity presumes tenancy in common in any slightest of its opportunity.

Instances Where equity Presumes Tenancy in Common

Purchase in Unequal Shares: where property is purchased through monies contributed unequally, equity presumes a tenancy in common and upon death of any of the contributors, his interest in the property devolves to his estate. See the case of Lake V Craddock.

Loan on Mortgage: where property is mortgaged in favour of more than on mortgagee, equity presumes it to be tenancy in common, so that where one of the mortgagees dies, the co mortgagees does not absorb his interest in the mortgage transaction, rather it goes to the deceased mortgagee’s estate.

Partnership: where there exist partnership, equity presumes tenancy in common, that upon the death of any partner, his interest devolves to his estate and not be absorbed by the co-partners.

Severance of Joint Tenancy: where a joint tenancy is severed, equity presumes tenancy in common in order to avoid the incidence of survivorship. Joint tenancy may be severed by alienation inter vivos, surrender, merger, forfeiture, etc.

b. Equal Division: Where a property is to be shared and there is no prescribed basis for its division, equity comes in and shares it equally. See Jones V Maynard. 

Failure of Vestment: where property has been shared but due to some reasons (for eg. death of a party), a share refuses to vest; equity will share his portion equally if there is need for it to be shared again.

Husband and Wives: upon dissolution of marriage between a husband and wife, equity shares their property amongst them equally if there is no predetermined mode of share between them.

Exception to the Maxim

Where husband and wife operate a joint account or business, this is clearly a joint tenancy. On the death of any spouse, the rule of survivorship will apply so that the surviving spouse absorbs the whole interest.

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4. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT REMEDY: this means that for equity, once there is wrong, there should be a remedy.

Application of the Maxim

a. Trustee: At common law, trustee is recognized as the legal owner of a trust property. The beneficiary is not recognized. Under equity however, equity recognized the interest of the beneficiary and requires the trustee to act conscionably with the trust property. The beneficiary can in equity, maintain action against the trustee if he misappropriates the trust property.

b. Mortgage: At common law, once the redemption date has passed, the mortgagor can no longer redeem. Equity recognizes the hardship which this setting causes to the mortgagor and invents the equity of redemption which gives the mortgagor the right to redeem even after redemption date has passed.

5. EQUITY SEES AS DONE THAT WHICH OUGHT TO BE DONE: 

Application of the Maxim

a. Contractual Agreement: where a party has performed his own part of the contract, equity seems the other party as though his own obligation has been performed. See the case of IRAGUNIMA V RIVERS STATE HOUSING AND PROPERTY DEVELOPMENT AUTHORITY & ORS. This however does not operate in favour of a volunteer.

b. The requirement of Deed: in WALSH V LONSDALE, there was an agreement for a lease which was above 3 years. At common law, a lease of above 3 years must be under deed. In this case, there was no such deed. The court still held the contract to be valid and enforceable because equity sees as done that which ought to be done.

c. Doctrine of Conversion: where a property is required to be converted from realty to personalty, equity deems it as so converted. See in FLETCHER V ARSHBURNER.

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6. EQUITY LOOKS AT INTENT RATHER THAN FORM: while equity is interested in the substance, common law is interested in the form.

Application of the Maxim

a. Contractual Obligation: At common law, time is of essence. At equity however, time is generally not of essence. Where the time for performance of contract has passed, equity can still order for specific performance. This is because; the intention of the parties was for the contract to be performed.

b. Mortgage: equity allows a mortgagor to redeem his mortgaged property even after the redemption date has passed. This is because; the parties did not intend the transaction to be a sale but a mortgage.

Limitation of the Maxim

Equity regards time to be of essence in the following cases:

a. Where parties has expressly agreed that time should be of essence

b. Where there has been a notice by either parties as to time being essential

c. Where the subject matter of the contract requires that time should be of essence. eg. Contract for perishable goods.

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7. EQUITY ACTS IN PERSONAM: While common law acts in rem, equity is said to act in personam. This means that equity is interested in the person while common law proceeds against the subject matter. Though equity tried to adjust its position, it is still not enforceable against a bona fide purchaser for value without notice.

Application of the Maxim

a. Committal to Prison: here, equity orders the defendant to be commuted to prison until he fulfills the obligation required of him.

b. Writ of Sequestration: Here, the court of equity appoints a third person in charge of the defendant’s property until he performs the obligation so ordered.

c. Vesting Order: The court may transfer the defendant’s property to another person and that other person obtains a good title.

d. Jurisdiction Abroad: The court can order the performance of an action against a person within its jurisdiction for or against a subject matter outside its jurisdiction. See the case of PENN V BALTIMORE, AYINULE V ABIMBOLA.

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8. EQUITY FOLLOWS THE LAW (BUT NOT SHEEPISHLY OR SLAVISHLY): This means that equity generally follows the common law rules. However, where following the common law rule will lead to injustice, equity was ever ready to depart from the law.

Application of the Maxim

a. Contract: equity follows the common law rules of contract: offer, acceptance, consideration, contractual capacity, privity of contract, etc.

b. Primogeniture Rule: equity follows the common law rule of primogeniture, where the eldest son inherits the property of his deceased father who dies intestate. However, where the first son promises the father that he would take care of his siblings, and the father as a result did not make a will, equity will deviate from the primogeniture rule and holds the first son bound by his words. See in STRICKLAND V ALDRIDGE.

c. Trust: equity just as common law sees the trustee as the legal owner of a trust property. Equity however went further to recognize the interest of the beneficiary.

d. Express Statutory Limitation: equity follows the common law rule of statutory limitation. Where a statute provides a time frame for institution of an action, failure to institute such action within the time frame renders the action statute barred.

e. Limitation by Analogy: where a subject matter is analogous to that which has an express statutory limitation, equity also follows the common law rule to bar a party coming outside the time frame so prescribed.

f. Creation of Estate: equity follows the common law rule of fee simple, fee tail and life estate. However, for equity, the precise words of limitation must not be employed. Any words which suggest that a particular interest is that which is intended to be created shall suffice.

Exceptions to the Maxim

Equity shall not allow a statute to be used as an engine of fraud. This is applicable where there is a concealed fraud, part performance and secret trust. For a concealed fraud, time begins to count at the time when the concealed fraud is discovered.

Also where there is a secret trust, the time for the beneficiary to bring an action against a trustee starts to count when the beneficiary discovers the existence of a secret trust in his favour.

And for part performance, where a contact is by statute required to be in writing but the requirement of writing is not complied with, equity will still enforce the contract as long as there is a consideration, if there has been a part performance by the other party. This is because, that party has shifted his position.

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9. DELAY DEFEATS EQUITY

Equity aids the vigilant and not the indolent.

Application of the Maxim

a. Express Statutory Limitation: where a statute provides for a limitation period by which an action n respect of a subject matter can be instituted, institution of the action later than the prescribed time frame renders the action fatal.

b. Limitation by Analogy: where a claim is not expressly covered by a statutory limitation, but it is analogous (similar) to a claim expressly covered, equity will apply that statutory provision by analogy.

c. Claims outside Statute: This is where doctrine of laches comes in. Here, the claims are neither covered expressly by statute nor by analogy. The court of equity still will not avail a person who brought an action after an unreasonable delay.

For doctrine of laches to apply, it must be shown that the plaintiff had knowledge of the existence of his right which was inconsistent with that of the defendant, and must have encouraged the defendant to make expenditures in respect of the subject matter in issue.

Limitations to the Maxim

Delay will not defeat equity where there is a concealed fraud, secret trust and disability.

10. EQUITY IMPUTES AN INTENTION TO FULFIL AN OBLIGATION: Where a person is placed under an obligation to perform a certain act and he goes on to perform another task which is similar to that originally contemplated, equity will impute that act to be the performance of the obligation so contemplated.

Application of this maxim is seen in the doctrines of performance and satisfaction.

(A) WHERE THE EQUITIES ARE EQUAL, THE FIRST IN TIME SHALL PREVAIL

(B) WHERE THERE ARE EQUAL EQUITIES, THE LAW SHALL PREVAIL

The above two maxims are employed to determine the priority of interests where there exist competing interest between two equities of the same juridical rank (equitable/equitable) and two equities of different juridical rank (equitable/legal), respectively.

Where the competing interests are equitable/equitable, the first in time shall prevail in equity only if the conduct of the first interest is unimpeachable.

Where the competing interests are equitable/legal, the law shall only prevail if the holder of the legal interest is a bona fide purchaser for value without notice of the prior existing interest.

The doctrine of temporal order rule and the doctrine of bona fide purchaser for value without notice are employed in handing these issues of priorities.

These last two maxims shall be discussed in details in our later article, for the purpose of information and clarity.

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Conclusion

Equity employed these maxims in order to justify the basis of its deviations from certain common law rules. Moreover, where there is conflict between common law and equity, equity prevails. This very principle made it feasible for equity to have its way in its effort in ameliorating the hardship of common law. Otherwise, the impact of these maxims may not have been possible. The maxims also made visible the considerable changes made by the court of equity. Common law was indeed harsh. Thanks to equity.

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