EQUITY

BRIEF HISTORY OF EQUITY

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.

MAXIM :1

UBI JUS IBI REMEDIUM (Equity will not suffer a wrong to be without a remedy)

1. INTRODUCTION:

Equity courts are the courts of natural justice. When ever a right is infringed, a remedy is available.
There is always a remedy for a wrong.Only rights recognized by law can be enforced by the court,
Ubi Jus ibi Remedium is the crux of the whole jurisdiction of equity. It expresses that every right will
be enforced and wrong redresssed by equity of not by common law then equity will not provide a
remedy against such law.

2. MEANING:

Equity will not suffer a wrong to be without a remedy means no wrong should be allowed to remain
unredressed if it is capable of being remedied by the court of justice.

3. EXPLANATION:

Ubi Jus ibi Remedium covers entire equitable jurisdiction.It explains that where there is a right there
is a remedy, rights and remedies co-exist one cant not exist without the other.

4. IMPORTANCE OF UBI JUS IBI REMEDIUM:

The maxim ubi Jus ibi remedium led the chancellor to intervene in the administration of justice in
order to give a relief by common law inadequate and to help the litigant by offering facilities in
evidence and the procedure which ordinary courts did not secure.

5. CASE LAW:

Ashby Vs. White 13 End P. 253

When law clothes a man with a right, it also gives ways to have it rights and remedies co-exist and
mere attribution of legal rights without a redress is meaningless

.
6. CONDITIONS:

(i) If a party has destroyed, lost or waived his right to an equitable remedy by his own act this maxim
will not apply.

(ii) It will not apply if there is a moral infringement being incapable of enforcement.

7. LIMITATION:

Following are limitations of the maxim.

(i) Where right and remedy both within the jurisdiction of common law.

(ii) Acts of state the courts are not authorized to question the acts of state.

Example:

If a person files a suit against sovereign or diplomat, he cannot be given relief because diplomats
have immunity from such proceeding.

8. NON APPLICATION;

This maxim will not apply in the following case.

(i) Where there is a breach of moral right because equity helps only where there is breach of legal
right.

(ii) Where there is jurisdiction of common law courts.

(iii) Where there is negligence of plaintiff.

MAXIM :2

EQUITY FOLLOWS THE LAW

INTRODUCTION:

Equity has no clash with law neither it overrides the provisions of law,nor it is the enemy of law. It
adopts and follows the basic rules of law. It is said that equity is not a body of jurisprudence acting
contrary to law but is rather a supplement to law. It is a well known rule that equity follows the
analogies of law. The equity came not to destroy the law but to fulfill it, to supplement it, to explain
it. Equity respects every word of law.

MEANING:

Equity is intended to supplement the law and not to supersede it.

EXPLANATION:

The discretion of the court is to be governed by the rules of law and equity, which are not oppose,
but each, in turn, to be subservient to the other, this discretion, in some cases, follows the law
implicit, in other assists it and advances the remedy; in other against it relieves against the abuse, or
allays the rigor of it but in no case does it contradict or overturn the grounds of principle thereof.
APPLICATION:

It has application in the following two aspects.

I. As to legal estates, rights and interest:

As regards legal estates, right and interests, equity was and is strictly bound by the rules of law and it
has no discretion to deviate there from. Equity does not allow an unfair use to be made of legal
rights so equity follows the in regard to the rule of primogeniture.

II. As to equitable rights and interest:

In many cases equity acts by analogy to the rules of law in relation to equitable titles and estates.
equitable estates are guided by the rules of decent as legal estate.

IMPORTANT ASPECTS OF MAXIM:

Following are two important aspect of this maxim.

(i) Equity adopts and follows the rules of law in all cases where applicable.

(ii) Equity follows the analogy of law

EXCEPTIONS:

(i) Where a rule of law did not specifically apply.

(ii) Where even by analogy the rule of law did not apply, equity formulated and applied it's own
rules.

MAXIM NO:3

WHERE EQUITIES ARE EQUAL FIRST IN TIME SHALL PREVAIL

INTRODUCTION:

The related maxim is concerned with priorities of competing interests, that is to say which of various
interests prevails in the events of a conflict, may be dealt with together. To understand this maxim, a
distinction and understanding of the concept of “legal interest or estate” and “equitable interest” is
necessary.

LEGAL INTEREST:

A legal interest or estate is an interest in the property required by a purchaser for valuable
consideration either by cash or marriage consideration. It also includes mortgagee and lessee.

EQUITABLE INTEREST:

An equitable interest is any interest which recognized from the Chancery court. An example would
be in the case of trust; although the trustee’s name would be registered as the holder of the
property, the beneficiaries acquire an equitable interest over the trustee’s property. They have a
right to sue the trustee for breach of trust.
GENERAL RULE:

Under general rule, the interest takes effect in order of their creation. FOR INSTANCE, whose rights
are created first will receive priority in the court of equity. However, an equitable interest might be
defeated by a legal interest, even though it has been created prior to the legal interest. For example,
if the purchaser of a legal interest is bona fide and without notice of any equitable interest, then the
equities are equal and legal interest prevails.

EXPLANATION:

Where equities are equal , the first in time shall prevail – In the absence of a legal estate in the
matter and the contest is among the equitable estate only, the rule is that the person whose equity
attached to the property first will be entitled to priority over other or others e.g., if A enters into a
contract for the sale of his house with B and then with C, the interest of B and C both being
equitable, B will have priority over C because his attached to the property first.

APPLICATION:

1:This maxim operates where there are two or more competing interests,provided both the interests
are equitable.

2: When two parties each have a right to possess something, then the one who acquired an interest
first should prevail in equity.

ILLUSTRATION:

For example, a man advertises a small boat for sale in the classified section of the newspaper. The
first person to see the ad offers him $20 less than the asking price, but the man accepts it. That
person says he or she will pick up the boat and pay for it on Saturday. Meanwhile another person
comes by, offers the man more money, and the man takes it. Who owns the boat? Contract law and
equity agree that the first buyer gets the boat, and the second buyer gets his or her money back.

MAXIM NO:4

WHERE EQUITIES ARE EQUAL,LAW SHALL PREVAIL

INTRODUCTION:

This maxim means that “when the conflicting interests of two or more parties are supported by
equitable pleas of equal value, equity being unable to prefer one to the other would allow the
conflicting equities to cancel out and leave law to take its course”.

EXPLANATION:

Where one thing follows two claimants on the base of equal equity, equity shall follow the law and
legal right shall be preceded. Law provides relief to those who claims on the base of legal right.

According to this maxim if legal right is equal to equitable rights, legal right shall remain there. It
means the person bearing legal right shall precede however equity is under law.

ILLUSTRATION:

For instance, if A sells to C land, over which B has a right of way, C takes the land subject to B’s right,
although he was ignorant of the right at the time of purchase. But the rule is different as regards
equitable rights. It is well established rule that a purchase for valuable consideration without notice
of prior equitable right, obtaining the legal estate at the time of his purchase, is entitled to priority in
equity as well as at law. In such a case equity follows the law, the purchaser’s conscience not being
in any was affected by the equity.

APPLICATION:

This maxim has certain applications such as:

1. Dispute in transfer of property: When both the contestants are equally entitled to obtain help
from courts of equity (because their equities are equal), the party who has law in his favor will
succeed.

For example, A agrees with B to sell his property for Rs. 5,000/-. Therefore in breach of the above
agreement, A sells the property to C for B Rs. 6,000/- and making a document hands over the
possession of the property to C. As a result of the agreement B did not get any legal interest in the
property. B has only an equitable interest in his favor binding A conscience. C, on the contrary, as a
result of his agreement with A, gets the legal interest and has executed a document and obtained
possession of the property. B’s interest is an equitable with law in his favor. Naturally, therefore, in a
conflict between B and C, C has superior interest as compared to that of B. Thus equitable interest is
not as strong as a legal interest and so, according to the maxim the law shall prevail.

2. It may be noted that the doctrine of Election, Marshaling, and Set Off are based on the maxim
under discussion

3. In contradiction of legal and equitable right: This maxim is used where equitable and legal rights
conflict and precedence go to legal right. Equities must be equal by there should be conflict of legal
and equitable rights. It does not apply where priority of time in case of equity is determinant factor
in relief.

4. Transfer of property cases:

S. 78 of Transfer of Property Act is based on this maxim. It enacts that “where though the fraud,
misrepresentation, or gross neglect of a prior mortgagee, another person has been induced to
advance money on the security of the mortgaged property, the prior mortgagee shall be postponed
to the subsequent mortgagee.

SEC 53 of Transfer of Property Act is also based upon this maxim.

It enacts that “every transfer of immovable property made with intent to defeat or delay the
creditors of the transferor shall be void-able at the option of any creditor so defeated or delayed.

EXCEPTION:

This maxim has two exceptions as follows:

1. Prior equitable and subsequent legal right: Where interest in legal property comes subsequently,
cannot attain precedence. Person, who acquires equitable right in the presence of legal right, he
procures breach of duty.

In case of negligence or fraud legal property extinct priority right if equitable property comes
subsequently.
2. Equal equities without legal right: Where there are equal equities but legal right lacks, this maxim
shall not apply.

MAXIM NO:5

HE WHO SEEKS EQUITY MUST DO EQUITY

INTRODUCTION:

Any one seeking assistance of a court of equity must, as a conduction to obtaining relief, do justice
as to the matters in which the role of the court is sought for. if anyone is willing to have the justice of
equity then he should always be ready to return equity to others.

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. Scriptures of
Islam also inform us to be conscientious:

“Woe to those who stint the measure:

Who when they take by measure from others, exact the full;

But when they mete to them or weigh to them, minis…”

APPLICATION AND CASES:

This maxim has application in the following doctrines-

i) Illegal loans

ii) Doctrine of Election

iii) Consolidation of mortgages

iv) Notice to redeem mortgage

v) Wife’s equity to settlement

vi) Equitable estoppel

vii) Restitution of benefits on cancellation of transaction

viii) Set-off

EXPLANATION:

i) Illegal loans: In Lodge v. National Union Investment Co. Ltd., the facts were as follows. One B
borrowed money from M by mortgaging certain securities to him. M was a unregistered money-
lender. Under the Money-lenders’ Act, 1900, the contract was illegal and therefore void. B sued M
for return of the securities. The court refused to make an order except upon the terms that B should
repay the money which had been advanced to him.

ii) Doctrine of election: 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 accept the benefit granted to
him by the donor and give away his own property to C or retain his own property and refuse to
accept the property of A on condition. But B can not retain his property and at the same time take
the property of A.

iii) 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 the other is redeemed. The right of
consolidation now exists in England but after the enactment of the Law of Property Act, 1925, it can
exist only by express reservation in one of the mortgage deeds.

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

v) Wife’s equity to a settlement: There was a time when woman’s property was merged with that of
her husband. She had no property of her own. Equity court imposed on the husband that he must
make a reasonable provision for his wife and her children. But, now, Under the Law Reform (Married
Women and Tort feasors) Act, 1935, married women has full right on her property and it is not
consolidated with her husband’s property.

vi) Equitable estoppel: A promissory estoppel arises where a party has expressly or impliedly, by
conduct or by negligence, made a statement of fact, or so conducted himself, that another would
reasonably understand that he made a promise thereon, then the party who made such promise has
to carry out his promise.

vii) Restitution of benefits on cancellation of transaction: It is proper justice to return the benefits of
a contract which was voidable, and, equity enforced this principles in cases where it granted relief of
rescission of a contract. A party can not be allowed to take advantage of his own wrong.

viii) 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.
LIMITATION:

i) The demand for an equitable relief must arise from a suit that is pending.

ii) This maxim is applicable to a party who seeks an equitable relief.

RECOGNITION:

i) Under sec 19-A of the Contract Act, 1872 if a contract becomes voidable and the party who
entered into the contract voids the contract, he has return the benefit of the contract.

ii) sec 35 of the Transfer of Property Act embodies the principle of election.

iii) Sec 51 and 54 of the Transfer of Property Act.

iv) In Order 8, Rule 6 of the CPC, the doctrine of Set-off is recognized.

EXCEPTIONS:

Following are exceptions to this doctrine.

I. State legislature:

It can not apply against state legislature.

II. Acts of parliament:

It can not apply against the acts of parliament.

III. Contrary to law:

Where a act is contrary to law. it has no application.

IV. Statutory prohibition:

Where there is statutory prohibition it cannot apply.

V. Matter of government policies:

It cannot apply against the matters of government policies.

VI. Factor of fraud:

If there is factor of fraud in a case, it will not apply.

MAXIM NO:6

HE WHO COMES INTO EQUITY MUST COME WITH CLEAN HANDS

INTRODUCTION:

The person seeking relief must not himself guilty of illegal or immoral conduct with regard to the
same transaction which would dis entitle him to any assistance of the court. the court of equity will
take into consideration, the personal conduct of the plaintiff in the transaction in dispute and if he
had not sought the help of the court with clean hands, court will refuse to grant him relief.

MEANING:

Equity demands fairness not only from the defendant but also from the plaintiff. It is therefore said
that “he that hath committed an inequity, shall not have equity.” While applying this maxim the
court believed that the behavior of the plaintiff was not against conscience before he came to the
court.

APPLICATION:

This maxim has application on the following cases.

I. Specific performance:

If the plaintiff has been guilty of undue advantage the court of equity will refuse the specific
performance of a contract.

II. Illegality:

Where the parties to n illegal agreement appear before the court of equity for division of their
respective shares towards the property obtained. it is revealed before the court that they had looted
it at the road so equity refused to give any relief to any party.

III. Fraud:

In case of fraud, equity will not grant relief to a party who has committed fraud.

IV. Benami Transaction:

Real owner is not allowed to recover the property.

V. Infant's misrepresentation:

Where a minor fraudulently concealing his age and obtained a sum from his trustee which he was
entitled to only at the age of majority. he was refused to get the assistance from the court of equity.

LIMITATION:

General or total conduct of the plaintiff is not to be considered. It will be seen whether he was of
clean hands in the same suit he brought or not. Brandies J. in Loughran v. Loughran said that “Equity
does not demand that its suitors shall have led blameless lives.”

EXCEPTION:

i) If the transaction is a against public policy

ii) if the party repents for his conduct before his unjust plans are carried out.
RECOGNITION:

i) Section 23 of the Indian Trust Act- An infant can not setup a defence of the invalidity of the receipt
given by him.

ii) Section 17, 18 and 20 of the Specific Relief Act, 1877- Plaintiff’s unfair conduct will dis entitle him
to an equitable relief of specific performance of the contract.

MAXIM NO:7

DELAY DEFEATS EQUITY

EQUITY AIDS THE VIGILANT,NOT THE INDOLENT

INTRODUCTION:

If there is an unreasonable delay in bringing proceedings the case may be disallowed in equity.
Acquiescence is where one party breaches another's rights and that party doesn't take an action
against them they may not be allowed to pursue this claim at a later stage. These may be used as
defenses in relation to equity cases. For a defence of laches courts must decide whether the plaintiff
has delayed unreasonably in bringing forth their claim and the defence of acquiescence can be used
if the actions of the defendant suggest that they are not going ahead with the claim so it is
reasonable for the other party to assume that there is no claim.

MEANING:

A Latin term in this regard is “Vigilantibus, non dormentibus, jura subvenient.” which means “Equity
aids the vigilant and not the indolent”. So, if one sleeps on his rights, his rights will slip away from
him. Legal claims are barred by statutes of limitation and equitable claims may be barred not only by
limitation law but also by unreasonable delay, called laches.

APPLICATION:

To cases which are governed by statutes of limitation either expressly or by analogy the maxim will
not apply. Such cases fall into three categories-

i) Those equitable claims to which the statute applies expressly.

ii) to which the statute applies by analogy.

iii) Equitable claims which are covered by ordinary rules of laches.

DOCTRINE OF LACHES:

Delay which is sufficient to prevent a party from exercising its rights and obtaining relief from court
of law is called laches. Laches is more than mere delay, and instead implies neglect to do what ought
to have been done. Thus, the maxim means that a party who delays in enforcing rights will not be
able to seek equitable relief.

EXAMPLE:

The plaintiff allowed his land to be occupied by the defendant and this was acquiesced by him even
beyond the period of limitation. On a suit of the land it was decided that as the period of limitation
to recover possession had expired, no relief could be granted.

DELAY WHEN FATAL:

In the following cases delay is fatal for a party desirous of enforcing his rights;

1-LOSS OF EVIDENCE:

As a result of delay when the available

evidence is lost or destroyed.

2-WAIVER OF RIGHT:

When the other party is induced to

assume or draw an inference from

one,s conduct that one has waived his rights.

3-RELEASE OF RIGHT:

Delay provides a ground to

the other party and leads him to believe that

one has agreed to abandon and release his right

4-LOSS OF WITNESS:

Loss of witnesses could be occurred in

case of death.

EXCEPTIONS TO THE MAXIM :

Following are the exceptions to the

maxim :

1-Where the law of

limitation expressly applies.

2-Where it apply by analogy, and

3-Where the law of limitation does not

apply but the cases are governed by

ordinary rules of latches.

LIMITATION:

This maxim does not apply when-

i) where the law of limitation expressly applies

ii) where it applies by analogy, and

iii) where the law of limitation does not apply but the cases are governed by ordinary rules of laches.

RECOGNITION:

The English doctrine of delay and laches showing negligence in seeking relief in a court of equity can
not be imported in view of Article 113 of the Limitation Act, 1908, which fixes a period of one year
(previously three years) within which a suit for specific performance should be brought.

Section 51 of the Transfer of Property Act embodies this doctrine but with a difference.

MAXIM NO:8

EQUALITY IS EQUITY

EQUITY DELIGHTETH IN EQUALITY

INTRODUCTION:

Equity always tries to put the litigating parties on a an equal level so for as their rights and liabilities
are concerned. equity acts in such manner that no party gets an under advantage over the other
party. benefits and burden of common interests and obligation cannot be imposed upon and
pressed against any one.

PLATO defined that'

If you cannot find any other, equality is the proper basis.”

MEANING:

"Equality is equity" is also expressed "Equity delighteth in equality which means that as for as
possible equity would put the litigating parties at equal pedestal. it expresses the object of both law
and equity in order to effectuate distribution of property and losses proportionate to several claims
and liabilities of the parties concerned so equality therefore means proportionate equality.
Justice Fry said, “When I say equality, I do not mean equality in its simplest form, but which has been
sometimes called proportionate equity.”

APPLICATION:

This maxim has application on the following matters.

I. Joint tenancy:

Equity dislikes joint tenancy.

Meaning of joint tenancy

Joint tenancy means joint ownership regarding the rights of survivor ship.

II. Equal distribution:

Whenever property is to be distributed between the right claimant court will equally distribute, if
there is not basis for division.

III. Contribution:

When a creditor has a single claim against several person he has the option of realizing the best form
any one of them and by common law, the debtor who had been compelled to pay debt in full had no
remedy against his co-debtor, but in equity has could claim contribution from the latter so that the
burden.

IV. Abatement of legacies:

If legacies are general, they are liable to a proportionate reduction in assets proving insufficient to
pay to the legacies in full.

V. Power of appointment:

Where donee of a powers, in the nature of the trust fails to exercise his power the court of equity on
the principle of equality will carry the same into effect, so that it may not fail, and distribute the
property equally among the persons concerned.

RECOGNITION IN INdia:

The doctrine of equality is equity has been recognized in Pakistan under various enactments.

Sec 42 contract act

Sec 69, 70 contract act

Sec 146, 145 contract act

Sec 56 Transfer Of Property Act

Sec 82 Transfer Of Property Act

CONCLUSION:

To conclude I can say that, equity always tries to keep the parties at same position. A party cannot
get any undue advantage over the other. the doctrine of equality, however, operated more
effectually in a court of equity than in a court of law. In the distribution of property, the highest
equity is to make an equality between the parties standing in the same relation.

MAXIM NO:9

EQUITY LOOKS TO THE INTENT RATHER THAN TO THE FORM

INTRODUCTION:

This maxim is characteristic of the greater freedom of action of the equity courts, as compared with
the common law courts, and of their efforts to do substantial justice rather than enforce technical
rules.

MEANING:

Common law was very rigid and inflexible. It could not respond favorably to the demand of time. It
regarded the form of a transaction to be more important than its substance. It looked to the very
letter of the agreement and not the intention behind it. On the other hand, Equity looks to the spirit
not to the letter, it looks to the intention of parties and not to the words.

APPLICATION:

In case of sale of land, if a party fails to complete it within the fixed for it, he is at Common Law, in
breach of the contract, but equity does not take this rigid attitude. It allows a reasonable time to the
party to complete it.

The application can be seen in the following instances-

i) Relief against penalties and forfeitures

ii) Relief in regard to precatory trust

iii) Relief in regard to mortgages, the doctrine of equity of redemption and the doctrine of clogs on
redemption

iv) Attitude in regard to statute of frauds.

EXPLANATION:
i) Relief against penalties and forfeitures-

Common Law courts insisted on the literal form of the contract that if the contract is breached,
certain amount must be given as compensation, though the actual loss is not that much. Equity
interpret the purpose and intent of the contract itself. The principal object of the contract is to
perform it and not the compensation. The compensation is a subsidiary matter.

ii) Precatory trust-

A trust is created with- (1) an intention on his part to create a trust thereby, (2) the purpose of the
trust, (3) the beneficiary, and (4) the trust property. Where an author uses words such as ‘I hope’, ‘I
request’ or ‘I recommend’ the first condition is missing. In cases where subsequent ingredients are
found, in early days, it was held by the equity courts that he had the intention. This view is in use
now but not as liberally as before.

iii) Relief in regard to mortgages-

The mortgagor has a right to obtain his property back by payment of the debt and that is his right of
redemption. The mortgagor’s right of redemption is guarded by courts and this has been expressed
in a well-known legal maxim, “Once a mortgage, always a mortgage, and nothing but a mortgage”.

RECOGNITION OR APPLICATION IN India:

i) Sec 55 of the Contract Act- If time is the essence of the contract, and it is not performed within the
stipulated time, the contract or part of it which is unperformed would be voidable. If time is not the
essence, the contract will not be voidable but entitles the promisee to damages.
ii) Section 74 of the Contract Act- only a reasonable compensation can be claimed.
iii) Sec 114-A of the Transfer of Property Act- Forfeiture clauses in a lease.

MAXIM NO:10

EQUITY REGARDS THAT AS DONE WHICH OUGHT TO HAVE BEEN DONE

INTRODUCTION:

This maxim means that when individuals are required, by their agreements or by law to have done
some act of legal significance, Equity will regard it as having been done as it ought to have, even
before it has actually happened. This makes possible the legal phenomenon of equitable conversion.
Sometime this is phrased as "equity regards as done what should have been done."

MEANING:

If someone undertakes an obligation for the other, equity courts look on it as done and as producing
the same results as if the obligation had been actually performed. Equity courts therefore look to the
acts of the person bound by his conscience and interpret and construe them in such a way that they
amount to what ought to be done.
ESSENTIAL REQUIREMENTS TO INVOKE THE MAXIM:

The essentials requirements to put the maxim in action are enlisted below;

1-There should be a contract to transfer legal title.

2-There must be a substantial evidence to prove the existence of that contract.

3-This contract should be capable to enforce;

4-The suit must be brought by the parties within the specific time;

5-The title so sought to obtain must have legal support.

SCOPE OF THE MAXIM:

The scope of this maxim is limited because it recognizes the right of performance of an agreement
between the parties to the contract only. The maxim is applicable only to the contractual
obligations; favoring the person who is entitled to get enforced a contract against a person who is
under an obligation to perform it.

ILLUSTRATION:

If A makes T trustee leaving 50,000 RUPEES to purchase a land for the use of B. T does not purchase
the land and by the time, B dies leaving all immovable property to X and all movable property to Y.
Now, who should get the 50,000 rupees? Equity in such cases would definitely regard the purchase
of land which ought to have been made as made. The money thus goes to X.

APPLICATION:

The working of this maxim can be seen-

i) the doctrine of conversion

ii) Executory contracts

iii) doctrine of part performance

i) Doctrine of conversion;

Doctrine of conversion can convert the money into immovable property and immovable property
into money.

ii) Executory contracts-

(a) Assignment of future property:

When an assignment of property was made for consideration equity treated it as a contract to
assign. When the property came into existence in such a contract it was treated as a complete
assignment.

(b) Agreement for a transfer:

An agreement for lease could be treated as a lease in equity.

iii) Doctrine of part performance:

Under the equitable doctrine of part performance contracts pertaining to land were allowed to be
formed by oral evidence where one of the parties did acts of pats performance.

RECOGNITION IN India:

i) The Transfer of Property Act- A Contracts to sell Sultanpur to B. While the contract is still in force,
he sells Sultanpur to C, who has notice of the contract. B may enforce the contract against C to the
same extent as against A.

ii) The Specific Relief Act- Section 12 relating to the specific performance of part of a contract also
illustrates the application of the maxim.

iii) The Trust Act- Where a person acquires property with notice that another person has entered
into an existing contract affecting that property, the former must hold the property for the benefit
of the latter.