property law

Disappointed litigants, who felt that they had not got abstract justice from the judges in applying the common law, therefore petitioned the King directly, on the basis that if the judges did not have the discretion to apply abstract equity, then the King must still retain it.  Consideration of these petitions was also delegated by the King, to the Chancellor.  The Chancellor did, however, have the power to apply equity in considering them and would look at the justice of the matter and at what a party’s conscience should tell that party to do.  The chancellor would issue personal orders to a party to do something or to refrain from acting in a way that was against conscience.  These included orders, which became known as common injunctions, not to sue at common law or not to enforce a common law judgement if it would be against conscience to take advantage of the narrowness and rigidity of the common law.  The Chancellor did not, however, deny that the rules of the common law were the law, nor that the orders of the common law courts were validly made.  What was said was that, in the particular case, the rules, and/or procedure, of the common law were inadequate to achieve equity and additional rules, relating to conscience, needed to be applied.

As the petitions for equity grew in volume, the Chancellor’s work in considering them developed, in the fifteenth century, into a court, the Court of Chancery.   The cases considered there were varied and were considered on an individual basis.  However, similar cases would tend to be dealt with in a similar manner so that some predictable “rules” could begin to be recognised.   The most common cases considered, and therefore the first set of equitable rules to develop, were those relating to the enforcement of uses of land, as is explained in the next chapter.  Other cases dealt with by the medieval Court of Chancery included those related to matters of relief from the consequences of fraud, or of accident, or of the lack of the formalities required at common law..

The Relationship of Equity to the Common Law

The jurisdiction developed by the Court of Chancery did not contradict that of the common law, it was a matter, even as predictable rules developed, of a need to apply additional, rather than substitute, rules in order to achieve equity.  The relationship between the Court of Chancery and the Common Law courts was well stated by Lord Ellesmere LC in The Earl of Oxford’s Case:

“The cause why there is a chancery is, for that man’s actions are so diverse and infinite, that it is impossible to make any general law which may aptly meet with every particular act, and not fail in some circumstance……..The office of the chancellor is to correct men’s consciences for frauds, breaches of trust, wrongs and oppressions, of whatsoever they may be, and to soften and mollify the extremity of the law……when a judgement is obtained by oppression, wrong or hard conscience, the chancellor will frustrate it and set it aside not for any error or defect in the judgement, but for the hard conscience of the parties”

This case arose in the cause of a dispute between the Court of King’s Bench and the Court of Chancery regarding the power to grant common injunctions restraining action at common law.  As a result of the case, King James I sought the advice of the Attorney-General, Sir Francis Bacon. That advice was that common injunctions issued by the Court of Chancery did not run counter to the law or amount to a denial of the validity of law applied in the common law courts:

“When the cause is called into chancery only upon a point of equity, there as the point of equity was never in question in the common law courts, so the point of law or fact, that concerns the law, is never in question in the chancery; and so the same thing is not twice in question, or answered anew for the chancery doth supply the law and not cross it.…and only meddleth with the corrupt conscience of the party.”

The King then issued a Royal Degree, confirming the power of the Court of Chancery to issue a common injunction.  In other words, where, in the same matter, the common law court, applying common law rules, and the Court of Chancery, applying the additional rules of Equity, have both made an order, the order of the Court of Chancery should prevail. This is not quite the same thing as saying that Equity prevails over common law.  As Bacon explained, the Court of Chancery did not contradict the common law but applied additional rules, building on those of the common law, in order to reach equity.  The point was also well put a few decades later by Wright LK in Dudley v Dudley:

“This is the office of equity, to support and protect the law from shifts and crafty contrivances against the justice of the law.  Equity therefore does not destroy the law, nor create it, but assist it.”

Later Development

In the latter part of the seventeenth century, and through the eighteenth century, there were considerable developments in the formation of a body of rules of equity, by way of similar cases being treated similarly, although there was still no formal system of binding precedent.  Development was particularly influenced by the tenures as Lord Chancellor of Lord Nottingham, who is often called “the father of equity”, and Lord Hardwicke.  In this period, the Court of Chancery came to have a three-fold jurisdiction in supplementing the common law: an auxiliary, a concurrent and an exclusive jurisdiction.  

The auxiliary jurisdiction was concerned with matters of procedure and the obtaining of evidence. The more personal approach in the Court of Chancery would allow orders to be made in aid of actions taking place in the common law courts, such as discovery of documents.  The concurrent, or remedial, jurisdiction was concerned with granting personal remedies for the breach of common law obligations, particularly specific performance of contracts and injunctions to restrain or correct other conduct in breach of common law obligations.  The rules of common law would decide whether there was a breach of obligation and equity did not seek to change this.  The remedial jurisdiction sought to support the principles of the common law by giving more appropriate remedies where the common law remedy was inadequate and where, as a matter of conscience, a more personal remedy was appropriate.  

The exclusive jurisdiction involved areas of substantive law where the court would apply further rules, building on those of the common law, with the aim of preventing unconscionable conduct.  Much of this jurisdiction was concerned with property.  In particular it included the administration of trusts, which were a development from the uses of land that were enforced by the medieval chancellors.  It also included the administration of estates of deceased persons and the enforcement of mortgages.  In adding and enforcing these additional rules about property, the Court of Chancery did not deny the validity of the common law rules.  The common law defined the nature of ownership and who was to be regarded as owner and the rights of an owner as a right in rem enforceable against the world. Equity could not alter this but could add obligations, founded in questions of conscience, to the rights given by the common law.  Also within the exclusive jurisdiction was the giving of relief from the consequences of fraud or other unconscionable conduct and the protection of minors and mentally ill persons.  This part of the jurisdiction also often involved issues about property.  

After the period of development in the eighteenth century, the long tenure as Lord Chancellor of Lord Eldon at the beginning of the nineteenth century was a period of consolidation.  It also saw the introduction of a formal system of precedent within the Court of Chancery.   Equity thus now became a firmer body of rules, complementary to those of the common law, rather than the Court of Chancery applying abstract equity as a court of conscience.  This did not mean, however, that development totally ceased.  One of the major equitable doctrines in relation to property, that of the restrictive covenant, developed in the mid-nineteenth century.