Maxim 5: He who seeks equity must do equity.
- This maxim, he who seeks equity must do equity, explains that a plaintiff must be prepared to give back equitable relief in return to the defendant.
- The maxim means that if a litigant claims something by way of equity, he must be ready and willing to grant to the other party what belongs to that other party in equity.
- Equitable relief under this maxim is granted to the plaintiff only upon the condition that he grants any corresponding rights or claims to which the defendant may be entitled, in respect of the transaction in which the relief is sought.
- A court of equity will not allow the plaintiff to say: “Give me the equitable relief that I seek, but I am not going to give right or relief to the other party.”
This maxim has many applications of which the following are examples:
(i) Illegal loans:
In Lodge v. National Union Investment Company Ltd., B borrowed money from M. M was an unregistered money lender. B in return for loan mortgaged securities to M. The contract was void under the Money Lenders Act 1900 (prevalent in England). B sued M for the delivery of security. The Court refused to make the order except on the condition that B should repay the loan to Z first. B is seeking equitable relief, so he must fulfill the equitable right of the other party also.
(ii) Election:
A gives his property to E by making an instrument (contract). In the same instrument, A purports to give E’s property to X. E cannot claim the whole gift to himself unless he gives his property to X. This is known as the doctrine of Election.
(iii) Consolidation:
This doctrine is dated back to 1684. It is related to the right of the mortgagor to redeem all the mortgages or none of them. E.g. A takes 1st loan from B by giving him his 5 Marla plot. After one month A talks 2nd loan from B by giving him another 5 Marla plots. Now B is the mortgagee who has two properties (5+5 Marla) of A. Now B becomes entitled to two mortgages made by A. B may consolidate both the mortgages and refuse to permit the exercise of the right of redemption of the mortgage without redeeming the other mortgage.
(iv) Notice to redeem the mortgage:
A mortgagor desiring to exercise his equitable right to redeem his mortgage must give the mortgagee reasonable notice of his intention.
(v) Wife’s equity to a settlement:
In England, there was a time when a wife at common law could not hold any property independently. But equity recognized the right of the wife to a separate estate in certain circumstances. As, according to the doctrine, if a husband moved to the Court of Chancery to obtain possession of property to which he was entitled in the right of his wife, the court refused to assist him except on the condition that he has to make a fair settlement of part of the property on his wife and children. (He has to agree on the condition that he will give some part of the property in settlement to his wife and children. Otherwise, the court will not provide him any right.)
(vi) Equitable estoppel:
Under this doctrine, a person is not allowed to go back from the statement of existing facts that he has made by his words or conduct. So, this rule prevents a person from denying:
- the truth of the same statement formerly made by him. Or,
- the existence of facts that he has made by words or otherwise, and these led others to believe in.
(vii) Specific performance of contracts:
The plaintiff is compelled to perform his part of the agreement before he can obtain relief against the defendant.
(viii) Setoff:
A judgment debtor is entitled to set off a decree which he has against his decree holder. E.g. A filed a suit against B that B has to return the amount 5000 PKR to A. And, B also stated in the court that A has also taken 2000 PKR from B. Now the court will order B to setoff and return just 3000 PKR to A as they both have taken loans from others.
Pakistan Law:
This maxim, he who seeks equity must do equity, is of universal importance. It has been given statutory recognition in the following Pakistani enactments:
1. The Contract Act:
Section 19-A of the Contract Act provides that “when consent to an agreement is caused by undue influence, the agreement is a contract voidable at the option of the party whose consent was so caused. Furthermore, section 64 of the same Act provides that when voidable contract is rescinded, or where a contract becomes void, the party rescinding the contract, or any other person who has received any advantage’ under such contract must restore it to the person from whom he received it.
2. Qanun-e-Shahadat (P.O. 10 of 1984) (Evidence Act):
Under Art. 115, the doctrine of estoppel has been recognized.
3. Specific Relief Act:
Under section 38 of the said Act, on the rescission of a contract, the court may require the party to whom such relief is granted to make any compensation to the other party which the justice of the case may require. Similarly, Section 41 provides that on the cancellation of an instrument, the Court may require the party to whom such relief is granted to make any compensation to the other party which the justice of the case may require.
4. The Transfer of Property Act:
Section 35 of the Act recognizes the doctrine of election, which is to the effect that a person taking a benefit under an instrument must accept or reject the instrument as a whole.
5. The Trust Act, 1882:
Section 62 of the Act provides that the beneficiary must repay the trustee purchase money with interest and other legitimate expenses when he seeks a declaration of trust or retransfer of trust property wrongfully bought by the trustee. Section 86 similarly provides that the consideration paid in a transfer of property pursuant to a rescindable contract must be repaid.
Moreover, the common law Court will not attach such qualifying condition of the maxim “he who seeks equity must do equity”. It would grant relief as soon as a legal injury is proved, and would not care to award relief to or protect the rights of the defendant. If the defendant sought to establish his claim, he has to avail a claim in a fresh forum or a fresh suit.
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