1 Lindley v. Horton, 27 Conn. 58.
* 3 Greenl. Ev. 164 ; Starkie S. and L. *I7O ; Townshend L. &
S. 6. /
3 Cooley Torts *aog ; Townshend S. & L. 66.
4 Starkie S. & L. *2Q4. 5 Cooley Torts *2o7.
6 Id. *2 1 et seq.
158 A REVIEW IN LAW AND EQUITY.
tion was both false and malicious. The chief instances
are:
(i). That of a witness testifying in court.
(2). That of a legislator speaking in the legislative
body of which he is a member.
(3). That of executive and judicial officers, as regards
their official utterances.
(b). Cases conditionally privileged to the extent that
there will be no presumption of malice, but which render
the party liable, if both falsehood and malice are
proved, as in case of a petition to the appointing
power for the removal of an official, or of a father dis-
cussing with a daughter the character of a suitor.
Belief in the truth of a slander or libel, and the
most careful investigation of the grounds of belief, are
no defences to an action, though they may prevent the
awarding of exemplary damages. 1
3. Malicious prosecution is a wanton prosecution
made by a prosecutor in a criminal proceeding, or a
plaintiff in a civil cause, without probable cause, by a
regular process or proceeding, which the facts did not
warrant, as appears by the result. 2 To maintain an
action for malicious prosecution, the plaintiff must
prove four things. 3
(a). That a suit or proceeding had been begun against
him by or at the instigation of the defendant.
(b). Want of probable cause on the part of the
defendant.
(c). Malice on the part of the defendant.
(d\ The termination of the suit or proceeding in his
favor.
Probable cause means the existence of such facts
and circumstances as would excite the belief in a
1 Townshend S. & L. 324 ; Odger L. & S. *3O2.
* Bouv. Law Diet., sub. Malicious Prosecution.
3 Id.; Cooley Torts *i8i et seq.
TORTS. 1 59
reasonable man that the plaintiff was guilty of the
offence charged, or that there was ground for an action
against him. As a rule, the fact that the defendant
acted under the advice of counsel in beginning the
proceeding is a bar to an action for malicious prosecu-
tion. The burden of proof is on the plaintiff to show
lack of probable cause.
Malice must be proved by plaintiff. It may be
either express or implied. Malice may be inferred
from lack of probable cause, but lack of probable cause
cannot be inferred from malice.
An action for malicious prosecution will lie for the
institution of a civil suit, though the exact instances
are as yet uncertain. It can, however, be maintained
in the following cases : malicious institution of pro-
ceedings in bankruptcy, of a civil suit accompanied by
the arrest of the defendant, of proceedings to have a
person declared insane or for the appointment of a
guardian.
CHAPTER XXVII.
EQUITY.
History. Equity is that system of jurisprudence
which affords a remedy where there is no plain, com-
plete, and adequate remedy at common law. 1 In Eng-
land, its administration belongs to the Court of
Chancery. The precise origin of the equitable juris-
diction of this court is uncertain, but the following ex-
planation by Lord Hardwicke seems most probable. 3
The administration of justice in England was originally
in the hands of the Great Court, or Council of the
King, which acted as a supreme court of judicature.
Afterwards this court was dissolved, and its jurisdic-
tion distributed among various courts, it being given
principally to the Court of Common Pleas, of King's
Bench, of the Exchequer, and of Chancery. Now all
original writs under the great seal returnable to the
common - law courts were issued from Chancery.
Many petitions being presented to Parliament and the
King for relief which could not be obtained by a resort
to common law, they were, as a rule, referred to the
Privy Council of the King, which, in turn, sent them to
the Chancellor, who was to decide whether the com-
mon-law actions were insufficient for the case, and if
they were found to be so, he proceeded to give relief
through the Court of Chancery. As originally the grant-
ing of such relief rested in the judgment and discretion
of the King, as represented by the Chancellor, the grant-
ing of it was said to be a matter of grace, and not of rig/it.
1 i Story Eq. Juris. 33.
2 See Id. 43; Bisph. Eq. 6 et seq.\ Tied. Eq. 4.
(160)
EQUITY. l6l
The courts of common law were unable to grant
full relief in every case, for two reasons. 1
1. Because of the limited number of actions, by which the
rightsofallparties could not be protected inevery instance.
2. Because of the closeness with which the common-
law judges adhered to certain ancient and very technical
decisions.
Originally, proceedings at equity and law differed in
two essential points. 2
1. In equity, there was no oral testimony. All testi-
mony was taken by depositions.
2. In equity, the court was judge both of law and
fact. The court could, in its discretion, frame an issue
of fact and send it to a jury for determination, but the
finding of the jury was not binding on the judge.
At present, the essential difference between courts
of equity and of common law is best illustrated by the
result of a trial in each. At common law the trial
results in a judgment for the defendant, or for damages
for the plaintiff. In equity the trial results in a decree,
in which all the rights of the parties are adjusted. A
decree may be partially in favor of the plaintiff and
partially for the defendant, while a judgment must be
wholly in favor of one or the other.
Courts of equity now, at least, follow precedent as
closely as do courts of law. The difference between
the two lies in the form of the proceedings and in
principles. Equity is enlightened law, untrammelled
by confinement to a limited number of actions.
MAXIMS OF EQUITY.
There are ten maxims of equity, of chief importance. 1
i. Where there is a right, there is a remedy, /'. e. t
1 Bisph. Eq. 7; see also Tied. Eq. 3; I Pom. Eq. Juris. 16.
5 Bisph. Eq. 16
3 See Bisph. Eq. 37 et seq. ; i Story Eq. Juris. 64 et seq. ; Tied.
Eq. 13 et seq.
l62 A REVIEW IN LAW AND EQUITY.
whenever there is an infringement of a legal right,
equity will give a remedy, if there is none at common'
law.
2. Equity follows the law, /. e., the principles and
rules of the common law are adopted whenever this
can consistently be done. Thus equitable estates are
distributed according to the rules for the distribution
of legal estates.
3. When the equities are equal, the law will prevail,
Thus if a purchaser, for a valuable consideration, with-
out notice of an equitable right, obtains the legal estate
at the time of the purchase, he will hold as against the
owner of the equitable title. This maxim supported
the doctrine of "tacking" in mortgages. (See page
42.)
4. Equity favors the active, not the passive. This is
designed to encourage diligence and punish laches.
5. Equality is equity. Thus, if A conveys an estate
in trust to B, to be conveyed by him to such one of
four persons as he might deem best, and B dies, having
failed to execute this power, a court of equity will
divide the property equally among the four.
6. He who comes into equity must come with clean
hands. Thus, equity will not enforce a gaming trans-
action.
7. He who seeks equity must do equity. Thus, if a
person seeks relief from a usurious contract, he must
offer to return the borrowed money, together with law-
ful interest.
8. Equity considers that as done which ought to be
done. Thus, if a testator has provided absolutely that
lands be sold and converted into money, equity will
regard the change as having taken place at the moment
of the testator's death, and the property will be
governed by the rules of personal property.
9. When the equities are equal, priority of time will
EQUITY. 163
prevail. Thus, if A has an equitable estate which he
mortgages to B, and subsequently A conveys his equi- .
table estate to C, C will take the equitable title subject
to the mortgage of B.
10. Equity acts in pcrsonam. Hence when the parties
are within the jurisdiction of a court of equity, it will
act, though the property in question may be outside
the jurisdiction. Thus, it is settled that a decree of
foreclosure and a sale of mortgaged property is valid,
though a part of the property is without the jurisdic-
tion of the court ordering the sale. 1
JURISDICTION OF EQUITY.
There are eleven chief heads of equitable jurisdic-
v tion : trusts, mortgages ? 'assignments, 'accident, mistake,
fraud, notice, Estoppel, 'conversion, adjustment/liens.
I. A trust is an equitable right, title, or interest
which a person has in property, the legal title to which
lies in another. 2 The person holding the legal title is
called trie trustee, and the person for whose benefit it
is held is called the beneficiary or the cestui que trust.
Trusts correspond to uses as they existed prior to the
statute of uses. (See page 69.)
Trusts may be divided into two classes.
1. Express trusts, or those which are created in
express terms.
2. Implied trusts, or those which, without being
expressed, are deducible from the nature of the trans-
action, or which are inferred as existing by equity,
independent of the intent of the parties."
Implied trusts may be divided into two classes, con-
structive trusts and resulting trusts.*
(a). Constructive trusts are those which arise by
1 Muller v. Dows, 94 U. S. 444- 8 2 StoI T Ec l- J uris - &*
3 See Bouv. Law Diet., sub. Trust.
4 2 Story Eq. Juris. 1195; Tied. Eq. 308.
164 A REVIEW IN LAW AND EQUITY.
construction of equity, regardless of the intent 'of the
parties? There is no element of fraud in constructive
trusts as here referred to. Trusts of this kind arise
most, frequently from the rule that "Whenever one
person is placed in such relation to another that he be-
comes interested for him or with him in any subject
of property, he is prohibited from acquiring rights in
that subject antagonistic to the person with whose
interest he has become associated." 2
Thus, if a trustee renews a lease in his own name
and with his own funds, this renewal inures to the ben-
efit of the cestui que trust, the trustee being still
regarded as trustee for the beneficiary in respect to the
lease.
(b\ Resulting trusts are those raised by implication
of law, and are presumed to exist from the supposed in-
tention of the parties and the nature of the transaction. 3
They may arise in four ways.*
(i). When one person pays the purchase-money, but
takes the title to the property in the name of another.
Thus, if A buys land, but has the deed made to B, Bis
regarded as trustee for A. It is essential that the pay-
ment be made prior to or at the time of the conveyance.
There is one exception to this rule in regard to a
resulting trust, namely, in advancements* An advance-
ment is a purchase by a parent, or by one standing in
the place of a parent, with the conveyance taken in the
name of the child. Here the presumption is that the
purchase was intended for the benefit of the child, and
no trust results to the parent except on proof that the
purchase was not meant as an advancement.
1 Bisph. Eq. 91. 2 i Lead. Cas. in Eq. 62 n. (4th Am. Ed.).
3 Bouv. Law Diet., sub. Resulting Trust.
4 Bisph. Eq. 79 et seq.; 2 Story Eq. Juris. 1195 et seq.\ 2 Pom.
Eq. Juris. 1031 et seq.
5 2 Story Eq. Juris. 1213 et seq. \ Bisph. Eq. 84.
EQUITY. !65
(2). When a trustee buys property in his own name,
but with trust funds.
(3). When the trusts of a conveyance are not declared,
or are but partially declared, and fail, the trustee, does
not hold for his own benefit, but as trustee for the
donor himself, or of his heirs-at-law.
(4). Where there is a voluntary conveyance, without
any consideration, and it is evident that it was not in-
tended that the grantee should hold the property for
his own benefit.
Express trusts. An express trust of personal
property may be proved by parol, but an express trust
of real property must be in writing. 1 Three things are
essential to the creation of an express trust."
(a). Sufficient words to create a trust.
(b). A definite subject-matter, i. e., definite property
on which the trust is to operate.
. (c). A definite object, for whose benefit the trust is
created.
Trusts may also be divided into two other classes. 5
1. Active trusts, in which the trustee has some duty
to perform, as the conveyance of an estate to A as
trustee, who is to pay the debts of the testator and
then to convey the property in certain proportions to
the children of the testator.
2. Passive trusts, sometimes called dry trusts, which
require no action on the part of the trustee to carry
out the trust, but in which he is merely the depositary
of the legal estate. In such a trust, the cestui que trust
may compel a conveyance of the legal estate to himself
by the trustee. 4
Trusts may still further be divided into two classes.*
i. Executory trusts. W T here some further act is re-
1 Bisph. Eq. 63. 2 Cruwys v. Colman, 9 Ves. 323.
3 Tied. Eq. 288; Bisph. Eq. 54.
4 i Lewis Trusts *i8. 6 Bisph. Eq. 57; Tied. Eq. 293.
1 66 A REVIEW IN LAW AND EQUITY.
quired to be done by the trustee to give the trust its
full effect, as in the creation of a trust by will, in which
the trustees are directed to convey the property held
in trust to certain persons at a certain time.
2. Executed trusts, where the interests to be
created are fully defined and created by the instrument
creating the trust, so that no further conveyance is
required to perfect them, as the appointment of A to
hold property as trustee for B until he reaches the age
of twenty-one, and at that time the trust to cease, and
B to become seised of the legal as well as the equita-
ble estate.
Trusts may be still further divided into two classes. 1
1. Private trusts, or those in which the beneficial
interest is ultimately in one or more definitely ascer-
tained individuals.
2. Public or charitable trusts. These trusts differ
from others in two particulars. 2
(a). The rule against perpetuities does not operate
against them.
(). Certainty in the objects of the trust is not
essential.
The following four classes of trusts have been con-
strued to be charitable : 8
(i). Trusts for the purposes of religion.
(2). Trusts for the purposes of education.
(3). Trusts for eleemosynary purposes.
(4). Trusts for the purpose of relieving the govern-
ment of burdens, as trusts for the building of town-
houses, etc.
The cy pres doctrine is most frequently invoked in
carrying out trusts of this nature. (See page 81.)
Thus, in a trust " for the preparation and circulation
1 Bisph. Eq. 59 ; Tied. Eq. 303.
2 Id. 116, 133 ; Id. 306, 307.
3 Id. 120 et seq. ; Id.
EQUITY. 167
of books and such other instruments as in the judg-
ment of the trustees will tend to create an anti-slavery
sentiment, and for the benefit of fugitive slaves,"
negro slavery having been abolished when the will
creating the trust went into effect, under the cy pres
doctrine the fund was applied to the New England
Branch of the American Freedmen's Union Com-
mission. 1
II. Mortgages. (See page 40.) As equity origi-
nally interfered to protect the mortgagor, it came to
have complete jurisdiction in all matters pertaining to
the foreclosure, redemption, etc., of mortgages."
III. Assignments. At common law no chose in
action could be assigned, because otherwise it was
feared that litigation would be encouraged, and it also
seemed absurd to the common lawyers that a person
could sell a thing of which he did not have possession.
But such assignments were upheld in equity, as were
also assignments of future and contingent interests,
such as the earnings of a ship. 3
IV. Accident. An accident is an unforeseen and
injurious occurrence, not attributable to mistake, neglect,
or misconduct*
Equity gives relief in three instances. 5
1. When deeds, or other written instruments, are lost.
If the loss is without fault on the part of the loser,
equity will decree a re-execution of the instrument. It
may also direct the loser to give to the party who re-
executes the instrument, a bond of indemnity, to pro-
tect him from any injury which may occur to him
from the discovery of the lost paper.
2. When penalties in bonds are accidentally incurred.
A penal bond is one in which the amount for which
1 Jackson -'. Phillips, 14 Allen 556. s Tied Eq. 414.
3 Bisph. Eq. 162, 164 ; In re Ship Warre, 8 Price 269.
4 Smith Eq. 36 ; Story Eq. Juris. 78. 6 Bisph. Eq. 176 et seq.
168 A REVIEW IN LAW AND EQUITY.
the obligor is liable, in event of breach of condition, is
fixed. This amount is called \hz penalty. Equity first
gained jurisdiction by giving the obligor or the sureties
relief when, on account of some accident, the obligor
was unable to fulfill the conditions on the precise day
named in the bond. Jurisdiction once gained, how-
ever, equity went further, and declared that, on breach
of condition, the obligor should be obliged to pay only
the amount actually due to, or the damages actually
sustained by, the obligee, on account of breach of con-
dition, and not the penalty named in the bond.
The question commonly is whether the amount
stated in the bond is a penalty, or whether it is an
amount agreed upon by the parties as a recompense
for the damages suffered in event of condition broken.
In the latter case equity gives no relief. 1
The amount of a bond will be construed as a penalty,
and consequently relief will be given, unless the
damages are uncertain, and it is impossible to render
them certain.
An obligor cannot escape an action for the specific
performance of an agreement stated in a bond, by
electing to pay the penalty. The giving of such a bond
does not affect the question of specific performance. 2
3. A defective execution of a power, as in case of a
trustee, with power to sell, who executes an imperfect
conveyance to a purchaser.
IV. Mistake. A mistake arises when a person,
under some erroneous conviction of law or of fact, does
or omits to do some act, which, but for the conviction,
he would not have done or omitted to do. 3 Mistakes
are of two kinds, mistakes of law and mistakes of
fact.
i. As a rule, equity gives no relief for mistakes of
1 Bisph. Eq. 178 et seq. ; I Story Eq. Juris. 89 ; Adams Eq. *io8.
* Bisph. Eq. 180. 3 Haynes Outlines of Eq. 132.
EQUITY. 169
law. Ignorance of the law excuses no one. This rule
has been somewhat shaken however.'
Courts readily take advantage of circumstances on
which to base relief, especially if advantage has been
taken by one party of the ignorance of the other, or if
any attempt has been made to confirm this ignorance.*
2. A mistake of fact will be relieved in equity if the
mistake is mutual, material, and not caused by negligence.
V. Fraud. There are many remedies at common
law for redressing injuries arising from fraud, but they
are often inadequate from their very nature. The aim
of equity, in the matter of fraud, is to place the parties,
so far as possible, in their condition prior to the com-
mission of the fraudulent act, the nature of equitable
remedies rendering this possible. Again, at law fraud
must always be proved ; there is never a presumption of
fraud ; while in equity, an indisputable presumption of
fraud frequently arises from the relations of the parties
or the nature of the transaction. 3
Equity has jurisdiction in all cases of fraud, with
two exceptions. 4
1. In cases of fraud used in regard to a will, in which
courts of probate have exclusive jurisdiction.
2. In cases where the remedy at law is complete and
adequate.
Fraud is divided into two classes. 5
1. Actual fraud, or the intentional and successful
employment of any cunning, deception, or artifice to
circumvent, deceive, or cheat another.
2. Constructive or legal fraud, i. e., fraud which is
presumed from the nature of the case, the relations of
the parties, etc.
1 See Bisph. Eq. 187 et seq. ; Keener Quasi-Contract, 85 et rcq. ; 2
Pom. Eq. Juris. 842 et seq. * Bisph. Eq. 188, and cases cited.
3 Bisph. Eq. 197, 198, 201. 4 Id. 199. 200.
5 i Story Eq. Juris. 184 et seq., 258.
I/O A REVIEW IN LAW AND EQUITY.
Fraud may also be divided, according to Lord Hard-
wicke, into four classes. 1
1. Fraud arising from the facts and circumstances of
the imposition.
2. Fraud apparent from the intrinsic nature of the
bargain itself.
3. Fraud which is inferred from the circumstances
and relations of the parties.
4. Fraud inferred from the nature and circumstances,
of the transaction as being a fraud on third parties.
1. In order to make a representation fraudulent, in
this class of fraud, four facts must exist."
(a). The representation must be actually/tf/fo 7 .
(b\ It must be supposed to be untrue by the party
making it.
(c\ It must be relied on by the party to whom it is made.
(d\ It must be a material misrepresentation.
2. A transaction of the second class may be fraud-
ulent on two grounds.*
(a). Because of its terms, as in a contract where
^he consideration is grossly inadequate contracts are,
however, rarely set aside on this ground alone, also in
case of usurious contracts and gambling transactions.
(). Because of its subject-matter, as in marriage
brocage contracts, contracts in restraint of marriage
and of trade. (See page 93.)
3. Fraud of this kind may arise from two circum-
stances. 4
(a). From the mental disability of one party, as in
case of idiots and insane persons.
(ft). From the supposition of undue influence arising
from the relations of the parties. These relations are
ordinarily four.
1 Chesterfield v. Janssen, r Atk. 301.
2 Bisph. Eq. 206 ; Adams Eq. *I7&. 3 Bisph. Eq. g 219, 224.
4 Id. 230 et seq.
EQUITY. i 7 i
(i). Guardian and ward.
(2). Parent and child.
(3). Attorney and client.
(4). Trustee and cestui que trust.
Gifts to the guardian, parent, attorney, or trustee
from, and contracts to their advantage, with the ward,
child, client, or cestui que trust, are regarded with the
greatest disfavor by courts of equity, and are set aside
upon the least indication of undue influence. In some
instances the transaction can be set aside at the option
of the party presumably imposed upon, as in case of a
gift from client to attorney, 1 while in others the pre-
sumption of fraud is prima facie only, and may be re-
moved by evidence of perfect fair dealing and absence
of undue influence, as in case of a transaction between
parent and child. 3
The general rule is that no party in a fiduciary re-
lation can be permitted to profit at the expense of the
party whose interests are confided to him. 3
4. The most familiar instance of fraud of this class
is found in conveyances designed to defraud creditors.
Such conveyances are void, though given for a valuable
consideration, provided that the purchaser knew of the
intent to defraud. 4
VI. Notice. The doctrine of notice had strictly no
application at common law. There parties stood solely
on their legal titles, and notice or knowledge of a prior
title was of no effect. The rule in equity, however, is
that a purchaser who takes property with notice of
valid claims and encumbrances upon it, takes it subject
to those claims and encumbrances. 4
Thus, if A holds the legal title to an estate charged
1 Holman v. Loynes, 4 D- G. M. & G. 270 ; Greenfield's Estate,
14 Pa. 489.
' l Taylor v. Taylor, 8 How. 183.
3 See Bisph. Eq. 234, 238 ; I Story Eq. Juris. 30? ft "I-
* Bisph. Eq. 243. * Id. 261,262.
1/2 A REVIEW IN LAW AND EQUITY.
with a trust, and conveys the estate to B, who pur-
chases in good faith and for a valuable consideration,
and without notice of the trust, he holds it discharged
from the trust. But if he takes it with notice, he takes
it subject to the trust.
Notice is the knowledge, either actual or constructive
of some act done. It is of two kinds.
1. Actual, when the knowledge is actually brought
home to the party to be charged with it, as where one
sees the record of a deed.
2. Constructive, when the party, by any circum-
stance, is put upon inquiry, or certain acts have been
done, of which knowledge is presumed on grounds of
public policy ; 1 as in case of a party in possession of a
deed which refers to another deed given to another
party. Here the party having the first deed has con-
structive notice of the contents of the second. There
is also constructive notice of the record of a deed, of a