Maxims of equity
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The maxims of equity evolved, in Latin and eventually translated into English, as the principles applied by courts of equity in deciding cases before them.
Among the traditional maxims are:
Equity regards as done that which ought to be done.
Problems may sometimes arise because, through some lapse or omission, cover is not in force at the time a claim is made. If the policyholder has clearly been at fault in this connection, because, for example, he has not paid premiums when he should have, then it will normally be quite reasonable for an insurer to decline to meet the claim. However, it gets more difficult if the policyholder is no more at fault than the insurer. The fair solution in the circumstances may be arrived at by applying the principle that equity regards that as done which ought to be done [See para 1, above]. In other words, what would the position have been if what should have been done had been done?
Thus, in one case, premiums on a life policy were overdue. The insurer' s letter to the policyholder warning him of this fact was never received by the policyholder, who died shortly after the policy consequently lapsed. It was clear that if the notice had been received by the policyholder, he or his wife would have taken steps to ensure the policy continued in force, because the policyholder was terminally ill at the time and the cover provided by the policy was something his wife was plainly going to require in the foreseeable future. Since the policyholder would have been fully entitled to pay the outstanding premium at that stage, regardless of his physical condition, the insurer (with some persuasion from the Bureau) agreed that the matter should be dealt with as if the policyholder had done so. In other words, his widow was entitled to the sum assured less the outstanding premium. In other similar cases, however, it has not been possible to follow the same principle because there has not been sufficiently clear evidence that the policy would have been renewed.
Another illustration of the application of this equitable principle was in connection with motor insurance. A policyholder was provided with cover on the basis that she was entitled to a ' no claims' discount from her previous insurer. Confirmation to this effect from the previous insurer was required. When that was not forthcoming, her cover was cancelled by the brokers who had issued the initial cover note. This was done without reference to the insurer concerned, whose normal practice in such circumstances would have been to maintain cover, but to require payment of the full premium until proof of the no claims discount was forthcoming. Such proof was eventually obtained by the policyholder, but only after she had been involved in an accident after the cancellation by the brokers of the policy. Here again, the fair outcome was to look at what would have happened if the insurer's normal practice had been followed. In such circumstances, the policyholder would plainly have still had a policy at the time of the accident. The insurer itself had not acted incorrectly at any stage. However, in the circumstances, it was equitable for it to meet the claim.
Equity will not suffer a wrong to be without a remedy
When seeking an equitable relief, the stronger hand is that which has been wronged. The stronger hand is that hand which has the capacity to ask for a remedy. In equity, this form of remedy is usually one of Specific Performance. This is a superior remedy to that which is adminstered at common law: damages.
Equity is Equality
Where two persons have an equal right, the property will be divided equally. Thus Equity will presume joint owners to be tenants in common unless the parties have expressly agreed otherwise. Equity also favours partition, if requested, of jointly-held property.
Equity regards substance rather than form
For example, if a contract is missing a standard section that is usually present, the court will treat the contract as if it were present. Substantively, the parties were seeking a normal contract that's only defect was the missing section.
Alternative:
- Equity looks to the intent rather than to the form
One who seeks equity must do equity
In order to receive some equitable relief, the party must be willing to complete all of their own obligations as well.
Equity aids the vigilant, not those who slumber on their rights
Vigilantibus non dormientibus aequitas subvenit.
Once the party knows they have been wronged, they must act relatively swiftly to preserve their rights.
Equity favours the vigilant, and those who "sleep on their rights" may be deprived of equitable remedies. This maxim is often displaced by statutory limitations, but even where a limitation period has not yet run, equity may apply the doctrine of "laches", an equitable term used to describe delay sufficient to defeat an equitable claim.
Alternatives:
- Delay defeats equity
- Equity Aids the Vigilant, Not Those Who Sleep on Their Rights
Equity imputes an intent to fulfill an obligation
Generally speaking, near performance of a general obligation will be treated as sufficient unless the law requires perfect performance, such as in the exercise of an option. Text writers give an example of a debtor leaving a legacy to his creditor equal or greater to his obligation. Equity regards such a gift as performance of the obligation so the creditor cannot claim both the legacy and payment of the debt.
Equity acts in personam.
Basically, the act is against the person, and not their property in rem.
Equity asserts jurisdiction over the person of the defendant, and enforces its orders against him or her by contempt or other means.
Equity will not concern itself with abstract wrongs
Equity abhors a forfeiture
The courts, using their jurisdiction to apply notions of fundamental fairness to the issues before them, do not want to take a property right away from a party unless it is unavoidable.
Equity does not require an idle gesture
It would be an idle gesture for the court to grant reformation of a contract and then to deny to the prevailing party an opportunity to perform it as modified.
One who comes into equity must come with clean hands
For example, if you desire your tenant to vacate, you must have not violated the tenants rights.
Alternatives:
- Equity will not permit a party to profit by his own wrong
An example was Riggs v. Palmer (1889) 115 N.Y. 506, where a man who had killed his grandfather in order to receive his inheritance more quickly lost all rights to the inheritance.
Equity delights to do justice and not by halves
Equity must fully satisfy the wronged party, and not simply offer her a compromise.
Equity will take jurisdiction to avoid a multiplicity of suits
Thus, "where a court of equity has all the parties before it, it will adjudicate upon all of the rights of the parties connected with the subject matter of the action, so as to avoid a multiplicity of suits." Burnworth v. Hughes, 670 P.2d 917, 922 (Kan. 1983). This is the basis for the procedures of interpleader and the more rarely used bill of peace.
Equity follows the law
Equity will not allow a remedy that is contrary to law.
Equity will not aid a volunteer
Basically, the person involved in the action must have a real interest in the issue. See Strong v Bird.
Between equal equities the law will prevail
Equity will provide no specific remedies where the parties are equal, or where neither has been wronged.
Between equal equities the first in order of time shall prevail
This maxim operates where there are two or more competing interests, one legal and the other equitable. where the calims of both parties are fair and meritorious, precedence will be given to the legal interest. This maxim was developed in connection with interests in lands. When a purchaser acquires property bona fide without notice of a defect in the vendor’s title, the equities are equal and the legal estate will prevail. If the purchaser takes title with notice of the defect, the earlier title, if valid, will prevail. The force of this maxim has largely been displaced by legislated systems of land title registration.