Publication year2012
Vermont Bar Journal

Fall 2012, #2. RUMINATIONS

Volume 38, No. 3
Fall 2012


The Vermont Court of Chancery

by Paul S. Gillies, Esq.

In the midst of trying an adverse posses- I sion case this summer, before a jury, where damages were part of the relief of the counterclaim, it occurred to me that I was not so sure I understood the difference between the role of the jury and that of the presiding judge. Those of us who have been practicing for less than forty years have known only one civil action, composed of legal and equitable parts, depending on the relief requested, and separating those two functions, particularly when a trial is of mixed parentage, takes some effort and study, when we think about it.

Vermont was one of the last of the states to merge its common law and chancery courts, by statute in 1969 and formally by the adoption of the first rules of civil procedure in 1971. The merger of law and equity had at least as dramatic impact on the way we sought justice in Vermont courts as did the latest reforms of the judiciary, which centralized the administration of the court system, wrested it from the previously county-based organizational conundrum, and made it into a wholesome unity.

It is too late to object to that change, and most would celebrate the merger compared to the previous system, which had been first implemented in 1839. Vermont had a merged judiciary for sixty years of experience before separation, during which the judges of the Supreme Court also served together as the court of chancery. But merger has cost the system its clarity. Too often there is confusion over what aspects of a case should be addressed in legal or equitable terms. Some days, to me, it looks like mud; lately, considering the history of the court of chancery in Vermont, some parts of the hydra are clearer.

The First Experiment

The first Vermont Constitution (1777) provided for limited equity power within the courts of the state:

The supreme court, and the several courts of common pleas of this State, shall, besides the powers usually exercised by such courts, have the powers of a court of chancery, so far as relates to the perpetuating testimony, obtaining evidence from places not within this State, and the care of persons and estates of those who are non compotes mentis, and such other powers as may be found necessary by future General Assemblies, not inconsistent with this constitution.(fn1)

The first reported exercise of equitable powers in Vermont came in 1778, when the superior court decided Galusha v. Griffin, a suit over the ownership of a horse, and ordered the mare returned to Jacob Galusha following a trial on the merits.(fn2) Damages were also awarded Galusha, without a jury. Plaintiffs could reap both money and recovery of property in a single action. Law and equity were one system.

In 1779 the legislature created the first court of chancery as the equitable complement of the Supreme Court. The act explained, "on consideration of the several pleas and allegations made by either party, [the court of chancery] may moderate the rigor of the law, decree and enter up judgment therein agreeable to equity and good conscience, and ... award execution thereof." Equity was necessary, according to the act, because, "from the universality of the law, many cases will arise, wherein it is necessary that some further provision be made for relief in equity, than can be obtained by the rules of common law."(fn3)

The question of whether this joining of law and equity was the right choice was first raised in 1785. That year the Council of Censors recommended amending the constitution, to read, "A future legislature may, when they shall conceive the same to be expedient and necessary, erect a court of chancery, with such powers as are usually exercised by that court, or as shall appear for the interest of the commonwealth. Provided they not constitute themselves the judges of said court."(fn4) This recommendation became Section V of the 1786 Constitution. It did not mandate a separate court, but it was an option.

The prohibition against the legislature constituting a court was a course correction. The legislature made itself a court of last resort, with sole jurisdiction over some disputes. In October of 1779, the legislature set itself up as a court with legal and equitable powers-absolute powers, out of reach of the judiciary.(fn5) That act gave the court powers to decide cases where the amount in dispute was over 4,000 pounds and "for the decision of all disputes between proprietors holding under different charters issued by the same authority." If the whole idea seems appallingly insensitive to the separation of powers, remember there was no separation of powers clause in the Constitution prior to 1787.

The Council was clearly troubled by this

grasp at the agreeable desideratum of uncontrolled dominion; trials by jury, in the most important disputes concerning property, wholly thrown aside: the Legislature assuming to themselves the judicial power, so far as respected all the permanent property in the State, and casting aside all restraints of law in their decisions, they were to determine every cause, without being shackled with rules, but by their crude notions of equity; or in other words, according to their sovereign will and pleasure ...

So the legislature stepped back into balance, and left equity to the courts. Instead of "crude notions of equity," the court would be guided by hundreds of years of English equity jurisprudence. In 1788, the legislature further defined the authority of the court of chancery, and provided it with authorities on which to hang its decision, including, "such powers as are usually exercised in the Kingdom of Great-Britain and the neighboring States, and not repugnant to the Constitution," with procedures "conforming as near as may be to the rules and presidents [sic], established in the courts of chancery in the Kingdom of Great Britain."(fn6) From 1779 until 1839, because the courts were the same, there was no appeal from a judgment of the court of chancery.(fn7) A court cannot review itself. One persona of the Court cannot review another persona.

Law and equity are complementary systems, but equity, where there is jurisdiction, prevails over the common law. In 1797, the legislature built this preemptive authority into statute, expressly empowering chancery to moderate the rigor of the law in cases of forfeiture of agreements, altering jury verdicts and granting "so much as is due according to equity and good conscience, and award execution accordingly."(fn8) The changes made in 1797 included an express limitation on chancery's authority, conditioning the statute's former respect for English authority, "so far as shall be consistent with the constitution and laws of this state."(fn9)

In 1802, the legislature endowed the court of chancery with the power to grant new trials, "under such restrictions, and regulations, as to them shall be deemed lawful, or equitable."(fn10) Here the legislature was extending a power formerly withheld from the courts, but regularly exercised by the legislature through private acts. The 1820 Council of Censors found this judicial authority antithetical to the separation of powers, and condemned it.(fn11) The practice was eventually abandoned, as one more disentanglement of the branches.

In 1813, the Council of Censors pondered whether law and equity should be divided into separate courts. Law was taking all the court time, and there were delays in handling equitable issues. A separate court would be more focused, and fairer. The Council was firm.

Chancery powers cannot, from their nature, be accurately defined or limited; and are therefore, in some measure, dangerous; yet, when reduced to system, by practice and precedent, highly, useful, important and necessary. The inconvenience of the exercise of those powers, by the Judges of a court of common law jurisdiction, has been unhappily experienced by the suitors in our Courts. Great delay in causes in Chancery has been occasioned by want of time, and hurry of business, on the law side of the Court. Necessary rules and orders for bringing causes to a hearing and decision, cannot be adopted and maintained in our present system: And the unavoidable precipitancy, in the proceedings, forbids the expectation of the attainment of correct decisions, by the proper discussion of the parties, and due deliberation of the Court. The Council has, therefore, recommended the establishment of a Court, with Chancery powers, distinct from the Courts of law.(fn12)

That recommendation was not adopted by the Constitutional Convention the following year, but the idea that chancery is best addressed by a chancellor rather than a group of judges began to take hold. In 1821, the legislature first recognized the authority of a single chancellor (who was also a judge of the Supreme Court) to make interlocutory orders and decrees relating to the final hearing before the full Court.(fn13) Although the court of chancery remained within the powers of the full Supreme Court, the amendment was one sure step toward a separate court, the efficacy of having a single chancellor ever more apparent.

For sixty years, law and equity were merged in the high court. Chancery and the Supreme Court were the same. It was a trial court for equitable claims, high crimes, and other issues, and an appellate court for the rest. What started out as a policy of expediency and efficiency, however, turned sour, as the workload of the Court increased and the travel and intellectual burdens of the judges took their toll. The arc of history began to bend toward separation.

What Is Equity?

We must answer that question. I've put it off long enough. It is a long story. The system of justice is broken into two parts- the common law and...

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