Civil Law

HE WHO SEEKS EQUITY MUST DO EQUITY

Equity Meaning

The maxim means that to obtain an equitable relief, the plaintiff must himself be prepared to do ‘equity’, that is, a plaintiff must recognize and submit to the right of his adversary because you must do unto your neighbor what you wish him to do unto you.

Application and Cases

This rule has many applications. For Example,

Illegal Loans

In Ledge vs.National Union Investment Co. Ltd., the facts were as follows. One B borrowed money from M by mortgaging certain securities to him. M was an unregistered money-lender. Under the Money Lenders Act, of 1900, the contract was illegal and therefore void. B sued M for the return of the securities. The court refused to make an order except upon the terms that B should repay the money that had been advanced to him. This decision was based on the principle of this maxim.

Doctrine of Election

Stating the gist of the doctrine succinctly it may be said that where a donor A gives his own property to B and in the same instrument purports to give B’s property to C, B will be put to an election, either to retain his own property and reject the benefit under instrument or to accept the benefit granted to him by the donor, and allow the gift of his own property made by A to C to take effect. But in no case can B choose to keep the benefit granted to himself and at the same time retain his property referred to in the instrument.

Consolidation of mortgages

Where a person has become entitled to two mortgages from the same mortgagor, he may consolidate these mortgages and refuse to permit the mortgagee to exercise his equitable right to redeem one mortgage unless and until the other is redeemed, i.e., unless there is simultaneous redemption of all. This is called equity of consolidation. This is naturally on the principle that he who comes into equity must do equity. It is to be noted that if the mortgagor exercises his legal right to redeem within the time mentioned in the deed, this doctrine does not apply, but when this time has passed, only the equitable right to redeem remains to which this maxim will apply.

Notice to redeem a mortgage

Notice to a mortgagee to redeem one’s mortgage is an equitable right of the mortgagor.

Wife’s equity to settlement

There was a time when in England at Common Law the wife could not independently hold any property. This was the effect of marriage. The legal existence of the wife, so to speak, merged into that of her husband, the husband consequently becoming the absolute owner of her money, goods, and chattels, things in action, and estates.

But equity saw injustice in this situation and therefore departed from the Common Law principle in three cases—by recognizing the wife’s equity to a settlement, recognizing the wife’s right to a separate estate in certain circumstances, and by putting fetters on the wife’s right to alienate that separate property or disabling her to anticipate future income called the restraint on anticipation.

When therefore a husband sought the aid of the Chancery Court to obtain possession of his wife’s equitable property to which he was entitled in right of his wife, the courts refused to assist him unless he accepted the terms and conditions imposed by the equity courts to compel him to make a reasonable provision for her and her children. Thus, in securing his equitable right, the husband had to do equity.

Equitable estoppel

Whether by words or by conduct, which was acted upon by a person before whom it was made and the maker of the representation was not allowed to go back upon it. However, this doctrine obviously can’t apply against the state legislature and to Acts of Parliament because there are no representations, and no one could be compelled to act against the statute. Estoppel is often described as a rule of evidence, but more correctly, it is a principle of law. As a principle of law, it applies only to representations about past or present facts. But there is also an equitable principle of “promissory estoppel,” which can apply to public authorities.

Restitution of benefits on cancellation of transaction

It is but proper justice to return the benefits to a voidable contract, and equity enforced this principle in cases where it granted relief of recession of a contract. If A induces B by fraud to enter into a contract, and when the same is set aside at the instance of B, B has to restore any benefit he may have received from A and to make compensation to A as the justice of the case may require. A party can’t be allowed to take advantage of his own wrong.

Set-off

Where there have been mutual credits, mutual debts, or other natural dealings between the debtor and any creditor, the sum due from one party is to be set off against any sum due from the other party, and only the balance of the account is to be claimed or paid on either side, respectively. The following are the salient features of a set-off claim:

The claim should not be a time-barred one
It should be of a liquidated sum
The claim was to be enforceable by action
The parties must be the same
The claim should exist in the same right
The assignee of the defendant may claim set-off
The cross-demands must arise out of the same transaction and the demands must be so connected in their nature and circumstances that they can be looked upon as part of one transaction.

Waiver

For its lotteries, the government appointed an organizing agent under an agreement. The agent failed to deposit agency fees and prize money for several draws. The state condoned his past lapses and defaulted on the condition of his good conduct. Due to further defaults, the state terminated his agency. The agent sued the state for damages under The Contract Act 1872 , sections 63 & 73. Held States condonation would not amount to a perpetual waiver of the agent’s lapses and defaults. An agent has behaved against the equitable principle, that “He Who Seeks Equity Must Do Equity.” State conduct does not amount to perpetual waiver.

Limitation of this Maxims of Equity

So that equity courts can stretch their helping hands to a defendant by applying this maxim, the demand for equitable relief must arise from a suit that is pending. It should arise from the same transaction or the same subject matter. In cases wherein it arose from two different suits, the maxim will not apply.
This maxim applies to a party seeking equitable relief. Those who wish to prosecute and exercise their legal rights and ask for legal relief from a court of equity are not allowed to avail themselves of this maxim.