'The evolution of the equity of redemption can only be properly understood by reference to the complex interplay between the legal, economic, political and cultural dimensions of land ownership.' Discuss.

But what did the aristocracy do with the money? Servicing the debts was very different to reducing them. The Equity of Redemption gave life tenants had very little incentive to repay the capital debts of their ancestors, and so they were happy to simply pay the interest and enjoy the rest of their disposable income themselves. There was little incentive to put away a few thousand a year if it would not make a dent in interest charges.

Debt increased because the only way to increase revenue was to outlay more. Family portions were substantial unavoidable charges, reoccurring at each generation. House-building was a frequent expenditure as mansions were rebuilt and servants’ housing created, usually financed by mortgages. Acquisition of land was a trend which continued right up until 1870 as families attempted to enlarge their estates and thereby generate more revenue to cover their spiralling debts. The ‘agricultural revolution’, prompted by new drainage and agricultural technology, led to expenditure on the improvement of land. Various nineteenth century statutes actually made treasury money available for loans for land improvement. Finally, investment in non-agricultural enterprises pushed families further into debt, the goal being a short-term increase in debt for long-term gains.

In the period 1870-1914, land rentals and capital value dropped significantly with the agricultural depression. Industrialisation moved the source and position of wealth from the land to the industrial centres. In some cases, mortgages had to be reviewed because the securities were insufficient to balance the debts. Furthermore, the drop in rentals caused problems for families bearing fixed jointures, portions or interest charges.

The landowners responded by selling land in record quantities, resulting in the very rapid self-destruction of their class. The period 1870-1914 saw a major shift in land ownership from aristocratic landholders to small owner-occupants. At the outbreak of the First World War in 1914, it was calculated that over 800,000 acres had changed hands in the previous five years.

With the landowning classes rapidly disposing of their defining feature and the rise of mass-commerce mandating a stable means of exchange, the Equity of Redemption quickly gave way to the freedom and enforceability of private contracts. Economics could no longer justify special protection for a dying class.

III
Cultural and Political Dimensions: Changing Attitudes

Up until 1870, as Sugarman & Warrington put it, England was a 'patrician polity' in which the landed aristocracy owned four-fifths of the British Isles. They dominated parliament, government, the church, the civil service and the armed forces. The assembled nobility in the House of Lords even dominated the law as the highest court in the land. The first half of the nineteenth century was a time of conservative, reactionary politics. Blackstone defended the position of the landed aristocracy. He believed that they held the whole of English society together, and that by tampering with the law of real property, one “endangers the dissolution of the whole [of society]”. Edmund Burke argued along similar lines, and both agreed that the position of the landed aristocracy was both just and essential. The Equity of Redemption was a product of this domination, a creature of self-interest propagated by those who stood to benefit from its protection.

This social entrenchment of aristocratic superiority was firmly based in English culture. Authority in England is largely based on appeals to custom, tradition and the past. These ideas are clearly illustrated in the continuing authority of monarchy and common law precedent, and are ideas which sit well with the law of property, with its notions of relational title and ownership grounded in time immemorial. The law of property, and the aristocracy it supported, accordingly gained the acceptance of English culture. The politics of the time were merely a manifestation of prevailing cultural values.

As with all things political, however, nothing stays the same forever. The Reform Acts of the late nineteenth century began a liberalisation of politics which was to continue well into the twentieth century. The establishment of ‘real’ democracy brought with it demands for reform of the great social divider: land. The new liberal government listened to the calls of the Irish and Scottish land protestors and responded with the (Irish) Land Act 1881 and the Crofter’s Act 1886. Land reforms were finally brought to England and Wales with Lloyd-George’s People’s Budget of 1909, which imposed heavy taxes on land ownership and made provision for surveys to allow even greater taxation in the future. Lloyd-George detested the unearned privilege of the landowning classes, and sought to bring about their destruction by first severing their link with the soil. His budget also had the effect, through the ensuing Constitutional Crisis, of substantially reducing the political significance of the Lords.

To a certain extent, even the conservatives – the new captains of industry – welcomed the reforms and stood to benefit from freedom of commerce and exchange. Furthermore, they saw freedom of contract as entrenchment of individualist values which would allay their fears of the rising collectivism.

It was in this climate that the Equity of Redemption, a doctrine conceived to protect a now dying class, slowly dissolved.

IV

Legal Dimensions: The Rise and Fall of the Equity of Redemption

An explanation of the construction of the Equity of Redemption is a helpful starting point for analysing its demise.

As mentioned above, the roots of the Equity of Redemption may be found in the responses of the courts of chancery to a series of particularly outrageous cases involving the strict operation of the evolving common law, somewhere between the fifteenth and seventeenth centuries. From here, it quickly hardened into a formal claim before making the transition from a ‘thing’ to an estate in equity that could take precedence over other claims (for example, a wife’s right to dower). Lords Nottingham and Hardwicke were instrumental in the latter transition. In order to circumvent the Equity of Redemption, mortgagees tried to write postponement or penalty clauses into the mortgage agreement which would operate to block or reduce the effectiveness of the Equity of Redemption. These ‘collateral advantages’ were outlawed.

By the end of the nineteenth century, however, doubts were cast over whether the ban on collateral advantages could be ‘fair and reasonable’. In a new world of freedom, liberalism and mass commerce, “one conception of fairness (the fairness needed to protect and entrench the superior position of the landed oligarchy) had been largely supplanted by another conception of fairness (the fairness demanded by the financier)”.

A new middle-class judiciary found themselves privileging a social group they deemed no longer worthy of such privilege. Furthermore, commerce was the role historically played by the middle classes – the same middles classes that democratic reform had swept into power.

While a firm assertion of the absolute ban on collateral advantages may be found as late as 1912, by the start of the First World War the courts were willing to consider such ‘clogs’ as valid provided they fitted within strict criteria. This was evidenced by the Kreglinger v New Patagonia Meat & Cold Storage Co Ltd (1914) judgment, and the successive rulings in Knightsbridge Estates Trust Ltd v Byrne (1939), Cityland and Property (Holdings) Ltd v Dabrah (1968) and Multiservice Bookbinding Ltd v Marden (1979) all widened the law's definition of what was ‘fair and reasonable’. The ultimate result was a firm respect for the enforcement of private contract and the consequential collapse of any special protection for landed interests.

V

Law, Politics, Culture and Economics

As this paper has shown, the rise and decline of the Equity of Redemption can be charted by reference to the complex interplay between the legal, economic, political and cultural dimensions of land ownership. It is a prime example of the way not only in which law is moulded around the changing society it serves, but also the way that it affects that society to preserve cultural heritage for many years after that heritage is no longer economic to sustain.

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Bibliography

Statutes

Crofter’s Act 1886.

(Irish) Land Act 1881.

Cases

Casborne v Scarfe (1735).

Cityland and Property (Holdings) Ltd v Dabrah [1968] 1 Ch 166.

Fairclough v Swan Brewery Co. Ltd [1912] AC 565.

Knightsbridge Estates Trust Ltd v Byrne [1939] 1 Ch 447.

Kreglinger v New Patagonia Meat & Cold Storage Co Ltd [1914] AC 25.

Multiservice Bookbinding Ltd v Marden [1979] 1 Ch 84.

Perrin v Blake (1772).

Thornborough v Baker (1675).

Journals

Cannadine, D. Aristocratic Indebtedness in the Nineteenth Century: The Case Re-Opened (1977) 30 Economic History Review 624.

Sugarman, D. & Warrington, R. Telling Stories: Rights and Wrongs of the Equity of Redemption in Harris, J.W. (Ed) Property Problems from Genes to Pension Funds. London, Boston: Kluwer law International, 1997.

Reports

Other Materials

Beckett, J. V. The Aristocracy in England 1660-1914. Oxford: Basil Blackwell, 1986.

Burke, Edmund. Reflections on the Revolution in France. Stanford: Stanford University Press, 2001.

Cannadine, D. The Decline and Fall of the British Aristocracy. New Haven: Yale University Press, 1990.

Dicey, A. V. Lectures on the Relation Between Law & Public Opinion in England During the Nineteenth Century (2nd Ed). London: Macmillan, 1914.

Murphy, W. T. & Roberts, S. Understanding Property Law (3rd Ed). London: Fontana, 1998.

Offer, A. Property and Politics 1870-1914. Cambridge: Cambridge University Press, 1981.

Simpson, B. A History of Land Law (2nd Ed). Oxford: Oxford University Press, 1986.

Thompson, M. P. Modern Land Law (2nd Ed). Oxford: Oxford University Press, 2003.

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