Equity

• Author: Jeffrey Lehman, Shirelle Phelps

Page 199

In its broadest sense, equity is fairness. As a legal system, it is a body of law that addresses concerns that fall outside the jurisdiction of COMMON LAW. Equity is also used to describe the money value of property in excess of claims, liens, or mortgages on the property.

Equity in U.S. law can be traced to England, where it began as a response to the rigid procedures of England's law courts. Through the thirteenth and fourteenth centuries, the judges in England's courts developed the common law, a system of accepting and deciding cases based on principles of law shaped and developed in preceding cases. PLEADING became quite intricate, and only certain causes of action qualified for legal redress. Aggrieved citizens found that otherwise valid complaints were being dismissed for failure to comply with pleading technicalities. If a complaint was not dismissed, relief was often denied based on little more than the lack of a controlling statute or precedent.

Frustrated plaintiffs turned to the king, who referred these extraordinary requests for relief to a royal court called the Chancery. The Chancery was headed by a chancellor who possessed the power to settle disputes and order relief according to his conscience. The decisions of a chancellor were made without regard for the common law, and they became the basis for the law of equity.

Equity and the common law represented opposing values in the English legal system. The common law was the creation of a judiciary independent from the Crown. Common-law courts believed in the strict interpretation of statutes and precedential cases. Whereas the

Page 200

common law provided results based on years of judicial wisdom, equity produced results based on the whim of the king's chancellor. Commonlaw judges considered equity ARBITRARY and a royal encroachment on the power of an independent judiciary. Renowned seventeenth-century judge JOHN SELDEN called equity "a roguish thing" and noted that results in equity cases might well depend on the size of a chancellor's foot.

Despite this kind of opposition, equity assumed a permanent place in the English legal system. The powers of the Chancery became more defined; equity cases came to be understood as only claims for which monetary relief was inadequate. By the end of the seventeenth century, the chancellor's opinions became consistent enough to be compiled in a law reporter.

Because of its association with the king, equity was viewed with suspicion in the American colonies. Nonetheless, colonial legislatures understood the wisdom of allowing judges to fashion remedies in cases that were not covered by settled common law or statutes. The Framers of the U.S. Constitution recognized the providence of equity by writing in Article III, Section 2, Clause 1, that the "judicial Power shall extend to all Cases, in Law and Equity." All states eventually allowed for the judicial exercise of equity, and many states created SPECIAL COURTS of equity, which maintained procedures distinct from those of courts of law.

In 1938, the Federal Rules of CIVIL PROCEDURE established one system for processing both law and equity cases. Soon after, most states abolished the procedural distinctions between law and equity cases. In federal courts and most state courts, all civil cases now proceed in the same fashion, regardless of whether they involve legal or equitable redress.

The most important remaining distinction between law and equity is the right to...