Equity

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File:Court of Chancery edited.jpg
The Court of Chancery, London, early 19th century

Equity is the name given to the set of legal principles, in countries following the English common law tradition, which supplement strict rules of law where their application would operate harshly, so as to achieve what is sometimes referred to as "natural justice." It is often confusingly contrasted with "law," which in this context refers to "statutory law" (the laws enacted by Parliament), and "case law" (the principles established by judges when they decide cases).

Contents

[edit] History

Template:Unreferenced The concept of "law" as opposed to "equity" is an accident of history. The "law courts" or "courts of law" were the courts all over England that enforced the king's laws in medieval times. At the end of the 13th century, under political pressure from the nobility, the courts of law gradually froze the types of claims they would hear, and the procedure that governed the hearing of those claims. Because the range of legal claims at that time was quite narrow, legal procedures were painfully hypertechnical, and jurors were often bribed, the result was that many meritorious plaintiffs were denied relief.

However, remedies could also be obtained through filing a petition with the king, who held residual judicial power; these filings were usually phrased in terms of throwing oneself upon the king's mercy or conscience. Eventually, the king began to regularly delegate the function of resolving such petitions to the Chancellor, an important member of the King's Council. At the time, the Chancellor was usually a clergyman and the King's confessor, so he was literally the keeper of the King's conscience. Soon the Chancery, the Crown's secretarial department, began to resemble a judicial body and became known as the "Court of Chancery".

By the 15th century, the judicial power of the Chancery was recognised. Equity, as a body of rules, varied from Chancellor to Chancellor, until the end of the 16th century. After the end of the 17th century only lawyers were appointed to the office of Chancellor.

One area in which the Court of Chancery assumed a vital role was the enforcement of uses, a role which the rigid framework of land law could not accommodate. This role gave rise to the basic distinction between legal and equitable interests.

[edit] Development of Equity in England

People started petitioning the King for relief against unfair judgments and as the number of petitioners rapidly grew, the King delegated the task of hearing petitions to the Lord Chancellor. The first Chancellors were men of the cloth, and were required to pass judgment guided by conscience and based on morals and equality. It has been suggested that ecclesiastics were chosen for this position as they belonged to the small class of people who were able to read and write.

As these Chancellors had no formal legal training, and were not guided by precedent, judgments were often widely diverse. 17th Century Jurist John Selden once said that “equity varies with the length of the Chancellor’s foot”. However, in 1529 a lawyer, Sir Thomas More, was appointed as Chancellor, marking the beginning of a new era. After this time, all future Chancellors were lawyers, and from around 1557 onwards, records of proceedings in the Courts of Chancery were kept, leading to the development of a number of equitable doctrines.

SOURCES: Andrew Edgecomb 2006; Equity in a Nutshell by T. Cockburn & M. Shirley, Lawbook Co, Syndey, 2005; Equity & Trusts by T. Cockburn, W. Harris & M. Shirley, Butterworths, Syndey, 2005.

[edit] Distinction between law and equity

Template:Unreferenced In modern practice, perhaps the most important distinction between law and equity is the set of remedies each offers. The most common remedy a court of law can award is money damages. Equity, however, enters injunctions or decrees directing someone either to act or to forebear from acting. Often this form of relief is in practical terms more valuable to a litigant. A plaintiff whose neighbor will not return his only milk cow, which wandered onto the neighbor's property, for example, may want that particular cow back and not just its monetary value. Law courts also enter orders, called "writs" (such as a writ of habeas corpus) but they are less flexible and less easily obtained than an injunction.

Another distinction is the unavailability of a jury in equity. Equitable remedies can only be dispensed by a judge as it is a matter of law and not subject to the intervention of the jury as trier of fact. The distinction between "legal" and "equitable" relief is an important aspect of common law systems, including the American legal system. The right of jury trial in civil cases is guaranteed by the Seventh Amendment of the Constitution, but only in cases that traditionally would have been handled by the law courts at Common Law. The question of whether a case should be determined by a jury depends largely on the type of relief the plaintiff requests. If a plaintiff requests damages in the form of money or certain other forms of relief, such as the return of a specific item of property, the remedy is considered legal, and the American Constitution guarantees a right to a trial by jury. On the other hand, if the plaintiff requests an injunction, declaratory judgment, specific performance or modification of contract, or other non-monetary relief, the claim would usually be one in equity.

A final important distinction between law and equity is the source of the rules governing the decisions. In law, decisions are made by reference to legal doctrines or statutes. In contrast, equity, with its emphasis on fairness and flexibility, has only general guides, known as the maxims of equity. As noted above, a historic criticism of equity as it developed was that it had no fixed rules of its own with the Lord Chancellor from time to time judging in the main according to his own conscience. As time went on the rules of equity did lose their flexibility and from the 17th Century onwards equity was rapidly consolidated into a system of precedents much like its cousin Common Law.

Charles Dickens' Bleak House parodied the excessive time and expense associated with the Court of Equity in 19th century England.

[edit] Statute of Uses 1535

NOTE: This section is in relation to English, Australian and New Zealand equity law.

In order to avoid paying land taxes and other feudal dues, lawyers developed a primitive form of trust called ‘the use’. This enabled one person (who was not required to pay tax) to hold the legal title of the land for the use of another person. The effect of this was that the first person owned the land under the common law, but the second person had a right to use the land under the law of equity.

Henry VIII enacted the Statute of Uses in 1535 in an attempt to outlaw this practice and recover lost revenue. The Act effectively made the beneficial owner of the land the legal owner, and liable for feudal dues.

The response of the lawyers to this was to create the ‘use upon a use’. The Statute only recognised the first use, and so land owners were again able to separate the legal and beneficial interests in their land.

SOURCES: Andrew Edgecomb 2006; Equity in a Nutshell by T. Cockburn & M. Shirley, Lawbook Co, Syndey, 2005; Equity & Trusts by T. Cockburn, W. Harris & M. Shirley, Butterworths, Syndey, 2005.

[edit] Fusion Fallacy

NOTE: This section is in relation to English, Australian and New Zealand equity law.

As the law of equity developed, it began to rival and conflict with the common law. Litigants would go ‘jurisdiction shopping’ and often would seek an equity injunction prohibiting the enforcement of a common law court order. The penalty for disobeying an equity ‘common injunction’ and enforcing a common law judgment was imprisonment.

The Chief Justice of the King’s Bench, Sir Edward Coke began the practice of issuing writs of habeas corpus, which required the release of people imprisoned for contempt of chancery orders.

This tension grew to an all-time high in the Earl of Oxford’s case (1615), where a judgment of Coke CJ was allegedly obtained by fraud. The Court of Chancery issued a common injunction prohibiting the enforcement of the common law order. The two courts became locked in a stalemate, and the matter was eventually referred to the Attorney-General, Sir Francis Bacon. Sir Francis, by authority of King James I, upheld the use of the common injunction and concluded that in the event of any conflict between the common law and the law of equity, equity would prevail. Equity's primacy in the U.K. was later enshrined in the Judicature Acts of the 1870s, which also served to fuse the courts of equity and the common law into one unified court system.

SOURCES: Andrew Edgecomb 2006; Equity in a Nutshell by T. Cockburn & M. Shirley, Lawbook Co, Syndey, 2005; Equity & Trusts by T. Cockburn, W. Harris & M. Shirley, Butterworths, Syndey, 2005.

[edit] United States

Template:Unreferenced In the United States today, the federal courts and most state courts have combined law and equity in the same courts, so a plaintiff can get legal and equitable relief in one proceeding. This reflects the position in England where the fusion of law and equity was substantially affected by the Judicature Acts 1873–1875.

Equity courts were widely distrusted in the northeastern U.S. following the American Revolution, and the northern states eliminated their equity courts by the late 1700s. However, the mid-Atlantic and southern states were slower to abandon their equity courts. The federal courts did not abandon the old law/equity separation until the promulgation of the Federal Rules of Civil Procedure in 1938.

Even today, several states still have separate courts for law and equity. Delaware is one notable example, as its Court of Chancery is where most cases involving Delaware corporations are decided. Some other states have separate divisions for legal and equitable matters in a single court. Besides corporate law, which developed out of the law of trusts, areas traditionally handled by chancery courts included wills and probate, adoptions and guardianships, and marriage and divorce.

After U.S. courts merged law and equity, American law courts adopted many of the procedures of equity courts. The procedures in a court of equity were much more flexible than the courts at common law. In American practice, certain devices such as joinder, counterclaim, cross-claim and interpleader originated in the courts of equity. Also, the modern class action evolved out of joinder. Template:Law

[edit] See also

[edit] External links

id:Modal ja:エクイティ pl:system equity pt:Eqüidade

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