Maxim: 8. Equality is Equity.
The Maxim “Equality is Equity” states that equity puts the parties to a transaction on equality. Although, the strict rules of law give one party an advantage over the other.
Equity dislikes joint tenancy, and it likes tenancy in common as it provides equality to all partners in a transaction. This is also clear from the maxim that Equality is Equity.
The difference between joint tenancy and tenancy in common is the following:
Joint Tenancy:
It is joint ownership with the right of survivorship. It means that, upon the death of one joint tenant, the whole estate belongs to the survivor, and the representatives of the deceased take nothing. E.g. A and B are joint tenants. B takes the whole property on the death of A. As a result, the heirs of A will not get any inheritance from A.
Tenancy in Common:
It is joint possession with separate ownership without the right of survivorship. E.g. A and B have tenancy in common. Heirs of A will get A’s property upon his death.
This maxim deals with certain situations.
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Purchase in unequal shares:
If A and B purchase property in unequal shares and take the conveyance to themselves jointly. On the death of A, B becomes entitled to the whole of the property at law. But, in equity, he is treated as a trustee for the representatives of A proportionately to the share of the purchase money advanced (paid) by A. E.g. A gave 5 Lac and B 10 Lac. On the death of A, B is entitled to hold the share of A as a trustee for the representatives of A.
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Loan on Mortgage:
If a mortgage is made to A and B jointly, it is immaterial whether the money is given as a loan by them equally or unequally. The transaction of a loan is sufficient to repel the presumption of an intention to hold the mortgage on a joint tenancy. The survivor is a trustee for the representatives of the deceased mortgagee to the extent of his proportion of the loan. The survivor is also accountable to the personal representatives of the deceased mortgagee for his share. A & B both gave a loan of 5 Lac to C. C mortgaged his property to both of them. At the death of A, B is a survivor and will hold the property as a trustee of A for the heirs of A as per the portion of loan A.
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Partnership:
Where partners acquire property, they are presumed to hold it as beneficial tenants in common. E.g. A, B, and C are partners in business. At the death of A, B, and C are trustees of A for the heirs of A as per the share of A in the business.
a. Severance of joint tenancy:
Where the property is vested in the parties as joint tenants in equity as well as at law, as in the case of a joint purchase where the money is advanced equally, equity will readily treat the joint tenancy as severed so as to exclude the incident of survivorship. Thus, not only will an actual alienation of his share by one tenant sever the joint tenancy in equity as regards that share, but also a mere agreement to alienate the share will have the same effect, provided it is entered into for value, e.g., in consideration of marriage.
General rule of English Law:
The presumption is that a transfer for a plurality of persons creates a joint tenancy with the right of survivorship unless there are words of severance.
Rule in Pakistan:
This principle is adopted in Pakistan in Section 106 of the Succession Act of 1925. This section states that: “If a legacy is given to two persons jointly and one of them dies before the testator, the other legatee takes the whole under the section.” This section deals with a bequest to two or more persons as joint tenants.
b. Equal division:
Husband and Wife:
Where a husband and wife have a joint bank account into which they both pay their income and upon which they both draw. The court after their divorce will divide the balance equally between them. The same principle was applied where a husband, his wife, and the wife’s mother had all contributed towards the purchase and equipment of a house.
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Other Cases:
Manuscript and publications:
If an author bequeaths the manuscript of a work to A and the copyright to B. A published the work by using the manuscript. The proceeds of the sale of the copyright will be divided equally between A and B.
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