3 6 Lecture 2 Part 6 Common Law And Equity

[MUSIC]. In this lecture we're going to look at the development of equity and see how it developed in a way, in competition with common law principles. And then see how over time equity has merged with common law principles and merged formally in the 19th century with the Judicature Acts. So, starting at the beginning, equity, what does it mean? The word equity means fair or just in the wider sense. But its legal meaning is the rules developed to mitigate the severity or the constraints of the common law. Equity developed around the 15th century. There were problems with the common law courts. We talked previously about the development of common law courts, how we developed a unified common law system throughout England and Wales, and that these courts were operated by the King's justices. But by the 15th century, there were beginning to be some problems with the court. In fact, some of the complaints about the courts in the 15th century sound very familiar nowadays. So the common law courts, by the 15th century, were said to have become rather slow, rather expensive and in particular they'd become very technical. As I said, these are problems that people talk about today. It was also true that juries were being used in both criminal and civil cases and there was a concern that there was scope for juries to be either intimidated by defendants or friends of the defend or in deed that juries could be bribed. So, there was a concern about the use of juries in civil and criminal cases but there was also a concern that the system of writs had been very, had become very rigid. A writ was essentially permission granted by the king for a party with a complaint to sue another party, one of the king's subjects, in the King's Courts. So the writ is a permission that a person needs to bring their grievance to the king or to one of the King's Justices to have that case decided. So despite the development of common law courts, the king himself continued to be a source of English law. Even after the law courts had developed people still sometimes petitioned the king for justice. This is known as Petitioning the King. The King was regarded as the fountainhead of all justice, from whom redress could be sought if a subject felt that he couldn't get justice in the ordinary courts. People petitioned the King to redress their grievances, and that meant that they would plead directly with him to hear their complaints and provide them with a remedy. The procedure for petitioning the King at this time was to present him with a petition or bill asking him to do justice in respect of some complaint. And this was going on at the same time as the common law courts were dealing with cases. So people would sometimes throw themselves on the King's mercy or the King's conscience when they felt for some reason that they weren't able to get a remedy through the ordinary system, through the common law courts, the common law justices. They would petition the King directly and appeal to the King's conscience for some kind of remedy. Now, for a time, the King, or the King in Council with his advisers, dealt with these petitions himself. But gradually the work, the number of petitions coming directly to the King began to grow and the ling developed the practice of passing these petitions onto his chancellor. The chancellor was known as the Keeper of the King's conscience. The chancellor was usually a clergyman, bishop somebody who would be learned in civil and cannon law. So the chancellor, trusted adviser, a cleric, knew about the law. The King, over time, the King, through his chancellor, eventually, set up special court known as the Court of Chancery and the idea of the Court of Chancery was to deal with these partitions that were going not to the common law courts but directly to the King and appealing to the King to decide the case on the basis of his conscience. The chancellor supervised the Chancery and clerks in the Chancery would issue writs, that's permissions, and other legal documents. The chancellor dealt with these petitions in a different way from the common law justices. Rather than looking at common law precedents, what the chancellor would do was to deal with petitions on the basis of what was morally right, or what seemed fair in the circumstances. So the chancellor would give or withhold relief, not according to some strict precedent, but according to the effect produced on his own individual sense of right and wrong by the merits of the particular case before him. Now, one has to be careful about this, because chancellors were not doing this in a completely arbitrary fashion. They were drawing on legal principles or what were known as equitable maxims in applying, in reaching a decision. So they weren't doing it in a wholly arbitrary way. But they were not doing it in the strict common, they were not using the strict common law approach adopted by the king's justices in the common law courts. So if we think of equity as a more fluid approach a broader more flexible approach to dealing with disputes and grievances you get a bit of sense of how the chancellor operated. in 1474 the chancellor issued the first decree in his own name which began the independence of the Court of Chancery from the king's council. So what we see in the 15th century It's the Court of Chancery establishing itself separately from the King's Court. So we have initially the petitions coming directly to the court. You have the chancellor dealing with those petitions in a sort of delegated way. But actually in the 15th century, you have the chancellor establishing a separate court of chancellery and the Court of Chancery had new procedures, new rights, and new remedies. So what we're seeing is the development of a, of a almost alternative system of law, the new rights. Equity created rights by recognizing things known as trusts. So the chancellor would recognize the idea, was prepared to recognize the idea that an individual could hold legal title to something, but on behalf of another person. That's the concept of a trust. So you may have the title to land, but the person entitled to have the land or have the benefit of the land, the beneficiary is actually somebody else. Although, you hold the bare legal title, somebody else has the benefit of the land. That's the idea of the trust. That was a form unknown and unrecognized in the common law. But actually, the chancellor was prepared to recognize the concept of a trust and to give beneficiaries rights against trustees, the person holding the legal title. Common law didn't recognize this device and regarded the trustee as an owner. So we see a difference in approach in equity to the holding of rights. Equity also developed the idea of the equity of redemption. So a common law under a mortgage, if the mortgager hadn't repaid the loan, once the legal redemption date had passed, he would lose the property, but remain liable to repay the loan. But equity took a different approach, equity allowed the mortgagor to keep the property if he repaid the loan with interest, and the right to redeem the property is known as the equity of redemption, so it's offering more. It's offering some remedy that the Common Law courts couldn't offer. There were however conditions seeking what's known as equitable relief, seeking to achieve a remedy under equitable principles. So they had to show first of all that they would not be able to obtain justice in the common law courts. So they wouldn't have an opportunity to get a remedy in the Common Law Courts. They also had to show that the person bringing the claim, the claimant, the plaintiff is without is himself without blame. So, blame, so the claimant must come to the court with clean hands. And they would also have to show that there hadn't been any delay in bringing the case. So the idea is, that if the chancellor is dispensing justice based on fairness and equity then the person seeking that, remedy or relief has to show that they themselves are blameless. That an injustice has been done to them and that they were not that they did not have any blame in that case, so new rights, some conditions, but also interestingly new remedies. The Courts of Chancery, if, if the chancellor was convinced that a person had suffered a wrong, then the court would grant a remedy. The court would devise a way to ensure that something was done to put right the wrong that had been done to the person making the claim. And now, the Common Law Courts had a very limited range of remedies. And essentially, the main remedy provided by the common law courts to somebody who is complaining about a breach of contract, or some other wrong done to them. The Common Law Courts would provide the remedy of compensation. So, when somebody had suffered a wrong, the main remedy that would be provided to them is that they would be given money by way of compensation to help to put them back into the position they would have been, if the wrong hadn't happened to them. But there are circumstances where actually you may be in a dispute or in some difficulty where having compensation or being given money isn't actually what you want, it's not much help, and the Court of Chancery. The chancellor developed new remedies, the remedy of specific performance, remedy the injunction, rectification and decision. I'm not going to say a bit more about specific forms of injunction to try and give you a sense of why these developed, how they developed, and how these remedies were preferable in certain circumstances to the remedies that could be offered by the common law courts. So let's start with the remedy of specific performance. Suppose that you have found your dream house. Don't think this is a medieval house, but anyway, let's suppose you found a dream house. You want to buy the house. The owner is selling the house. You offer to buy it. The seller agrees to sell it to you. You have a contract. You're very happy, this is your dream house. Just at the point where you're going to complete the sale to move into it, the owner says he's changed his mind and he doesn't want to sell you the property. Now, what you have there is a breach of an agreement. You have a breach of contract. If you go to the Common Law Courts for a remedy, the Common Law Courts will say absolutely, you said you would buy it. You had a legally binding agreement. You are entitled to a remedy. What we will give you is compensation. We will give you money. But you say, I do not want money, I want my dream house. There's no other house I want, that's the only place that I want. The common law can offer you nothing. If you go to Courts of Equity, or at the time you went to Courts of Equity, you could say we had an agreement. He agreed to, sell me the house. He now refuses to sell me the house. Give me a remedy. And the chancellor would say, in fairness, you must do what you agreed. And he would grant an order for specific performance. That means, the person must do the thing that they have agreed to do. And in that respect, in this particular instance what would happen is that the person who owns the house will be compelled to sell it to, to sell it to you. And that is a much more valuable remedy than having the compensation that you didn't want. another example is the example of an injunction. You've moved into your dream house. You love it, but the problem is that your next door neighbor decides to keep pigs in their back garden. So you're living in your house, but your neighbor has these pigs that honk and snort and make a smell, and you've got mud, and it's hideous. And, what do you do? You go to the Common Law Courts, and say, what can I do about this? And the Common Law Courts say, we agree, this is awful. It's a nuisance. It's all kinds of things. We can give you compensation. You don't want compensation. You want the neighbor to get rid of the pigs. In equity, you would be entitled. You might be able to get an injunction. An injunction is essentially an order from the court prohibiting somebody from doing something. So an injunction to stop your neighbor from keeping pigs next door to you. And that will make you much happier than having the money. So, those are some of the ways in which equity provided something more, something more flexible and something more and often something more valuable than would have been available under the common law system or in the Common Law Courts. the system of equity, the Court of Chancery, developed and grew over the years In the 19th century, however, the Court of Chancery had begun to develop some of the same problems that had be visible in the common-law courts in the 15th century. There was a problem with a sense that some of the decisions in equity were somewhat arbitrary. Some of the cases became very expensive and lengthy and during the century, during the 19th century, particularly, under Lord Chancellor Lord Eldon cases in Chancery began to take an enormously long time become enormously expensive and indeed become positively traumatic for people seeking a remedy through Chancery. And in fact, it was around this time that Charles Dickens wrote his novel Bleak House. I recommend this to anybody who wants to have any understanding of how the legal system was operating in the 19th century. the story of Bleak House, the central issue in the novel of Bleak House, is the case of Jarndyce and Jarndyce. It's a case over a disputed will that is being decided in Chancery. And this case runs throughout the entire book. And the punchline is that the case goes on for so many years, so many generations, endlessly coming back to court, endlessly being debated by the lawyers. It takes so long and costs so much money. That by the time decision is given by the judge in the Chancery court in the end, there is nothing left to dispense. Once he gives his decision as to who should inherit under the will, there's actually no money left, because it's all been spent on lawyers' fees and this was Charles Dickens' view. Charles Dickens actually spent some time as a lawyer. And he had a particular loathing for some of the procedures of English civil justice. And I certainly recommend anyone interested in this to read Bleak House. He says in Chapter 1, he describes the Court of Chancery. This is the Court of Chancery, which has its decaying houses and its blighted lands in every shire, which has its worn-out lunatic in every madhouse and its dead in every churchyard, which has its ruined suitor with his slipshod heels and threadbare dress borrowing and begging through the round of every man's acquaintance. Which gives to monied might the means abundantly of wearing out the right, which so exhausts finances, patience, courage, hope, so overthrows the brain and breaks the heart, that there is not an honorable man among its practitioners who would not give, who does not often give, the warning, suffer any wrong that can be done you rather than come here. So as you see Charles Dickens was not a fan of the Court of Chancery. In 1873, the Common Law Courts and the Courts of Equity were actually combined in the Judicature Acts 1873 to 85. Although, one of the divisions of the current High Court is still called the Chancery Divisions, still called the Chancery Division, all courts now deal with both common lore and equitable principles and remedies. We'll talk about the divisions of the High Court in one of the subsequent, subsequent lectures. So that's the development of equity and the bringing together of equity and common law in the 19th century. [MUSIC].