Maxims of Equity and Their Applications in Bangladesh

Class Lecture Compilation from the course Principles of Equity, Trust and Roman Law

Learning Outcome:
Students will be :
- able to identify the areas of application for major equitable maxims,
- aware about the application opportunities of equitable maxims in Bangladeshi Laws

1. Maxims of equity Preeti Kana Sikder Lecturer, Department of Law & Justice Jahangirnagar University

2. What is a ‘Maxim’? Short, pithy formulations of broad and general principles of common sense and justice. __Walker D.M.

3. Memorise this list 1. Equity will not suffer a wrong to be without a remedy 2. Equity follows the law 3. He who seeks equity must do equity 4. He who comes into equity must come with clean hands 5. Delay defeats equities 6. Equality is equity 7. Equity looks into the intent rather than the form 8. Equity looks on that as done which ought to be done 9. Equity imputes an intention to fulfill an obligation 10. Where there is equal equity , the law shall prevail. 11. Where the equities are equal , the first in time shall prevail 12. Equity acts in personam .

4. 1. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A REMEDY General Meaning: Equity will not allow the technical defects of law to prevent worthy plaintiffs from obtaining redress.

5. 1. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A REMEDY Ubi jus ibi remedium – No wrong should go un-redressed if it is capable of being remedied by courts

6. Application of this Maxim The Enforcement of Trusts The Auxiliary Jurisdiction Appointment of Receivers

7. What is a Trust? According to Black’s Law Dictionary: An equitable or beneficial right or title to land or other property, held for the beneficiary by another person, in whom resides the legal title or ownership, recognized and enforced by courts of chancery.

8. Historical Background of Trusts

9. What is Auxiliary Jurisdiction? The jurisdiction exercised by the Court of Chancery to aid a claimant at common law; for example, by forcing a defendant to reveal documents and thus provide necessary evidence for his case. Auxiliary jurisdiction was rendered obsolete by the Judicature Acts 1873–75.

10. Who is a Receiver? Courts appoint receivers to take custody , manage , and preserve money or property that is subject to litigation so that when the final judgment is rendered, the property remains available to accomplish what has been ordered

11. Application in Bangladesh

12. A. Code of Civil Procedure, 1908 Section 9 : Courts to try all civil suits unless barred : The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.

13. This section entitles a civil court to entertain all kinds of suits unless they are prohibited

14. B. Code of Civil Procedure, 1908 Section 151: Saving of inherent powers of Court Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court

15. C . The Specific Relief Act, 1877 Part II: Section 44 The appointment of a receiver pending a suit is a matter resting in the discretion of the Court . The mode and effect of his appointment, and his rights, powers, duties and liabilities, are regulated by the Code of Civil Procedure.

16. D . Code of Civil Procedure, 1908 Order XL: Schedule I Appointment of receivers Remuneration Duties Enforcement of receiver's duties

17. Writ provisions in the Constitution and public interest litigation devices have now extended the scope and effective working of this maxim.

18. 2. EQUITY FOLLOWS THE LAW General Meaning: Where possible, equity will ensure that its own rules are in line with the common law ones . Equity does not interfere with a man’s legal rights unless it would be unconscientious on his part to take advantage of them.

19. Stickland vs Aldridge (1804)

20. 2. EQUITY FOLLOWS THE LAW Recognition in Bangladesh: This sub-continent has never recognised any distinction between legal and equitable interests. Equity rules in Bangladesh, therefore, can not override any specific provision of law. For example, every suit in Bangladesh has to be brought within the limitation period and no judge can create an exception to this on principle of equity.

21. Maxims related to Discretionary Quality In general, one can say that wherever certain facts are found and a common law right or interest has been established, common law remedies will be available whether that produces a fair result or not. By contrast, equitable remedies are discretionary and the court will not grant them if it feels that the plaintiff is unworthy , notwithstanding that prima facie he has established an equitable right or interest.

22. The maxim that he who seeks equity must do equity , together with the next two maxims, concerning ‘clean hands’ and ‘delay’, are aspects of this discretionary quality .

23. 3. HE WHO SEEKS EQUITY MUST DO EQUITY T he person who seeks an equitable remedy must be prepared to act equitably, and the court may oblige him to do so . This maxim refers to the plaintiff’s future conduct.

24. Application of this Maxim Doctrine of Election Equitable Estoppel Improvements made by purchaser Set Off

25. Election in equity arises where there is a duality of gifts in the same instrument Doctrine of Election

26. Per Lord Chelmsford in Codrington v Codrington (1875) “The principle is that, there is an implied condition that he who accepts a benefit under an instrument must adopt the whole of it, conforming to all its provisions and renouncing every right inconsistent with it.”

27. Illustration D gives (by will) X a family estate worth 20,000 pounds belonging to E . Also (by same will) D gives E a legacy (amount of asset left to someone in a will) of 30,000 pounds of D’s own property .

28. What are the options of E?

29. E has two courses open for him - He may take under the instrument. X will take E’s family property, and E himself will take the legacy given to him by D He may take against the instrument E will lose the gift made to him by D to the extent required to compensate X for the disappointment X only gets the compensation and not the property, therefore suffers disappointment

30. 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 to retain his own property and reject the benefit under the instrument or to accept the benefit granted to him by the donor, and allow the gift of his own property made by A to C to take effect. But in no case can B choose to keep the benefit granted to himself and at the same time retain his property referred to in the instrument.

31. Transfer of Property Act, 1882 Section 35: Election when necessary Where a person professes to transfer property which he has no right to transfer , and as part of the same transaction confers any benefit on the owner of the property, such owner must elect either to confirm such transfer or to dissent from it; and in the latter case he shall relinquish the benefit so conferred , and the benefit so relinquished shall revert to the transferor or his representative as if it had not been disposed of ,…

32. Equitable Estoppel A principle which precludes a party from alleging or proving in legal proceedings that a fact is otherwise than it has appeared to be from the circumstances

33. Lord Denning, Twentieth Century’s Greatest Judge The assurances intended to be acted upon and in fact acted upon are binding Where a government department wrongfully assumes authority to perform some legal act, the citizen is entitled to assume that it had that authority

34. Improvements made by purchaser When a person with a defective title who makes improvements on the land on his possession, believing that he is absolutely entitled to it is evicted, the rightful owner has to pay for compensation on the principle that he did not stop the person in possession from making improvements.

35. Transfer of Property Act, 1882 Section 51: Improvement made by bona fide holders: When the transferee of immoveable property makes any improvemen t on the property, believing in good faith that he is absolutely entitled thereto, and he is subsequently evicted therefrom by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid or secured the transferee, or to sell his interest in the property to the transferee at the then market value thereof, irrespective of the value of such improvement.

36. 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.

37. Civil Procedure Code Order VIII, Rule 6: Particulars of set off to be given In written statement.- ( 1) Where in a suit for the recovery of money the defendant claims to set off against the plaintiff’s demand any ascertained sum of money legally recoverable by him from the plaintiff, of exceeding to pecuniary limits of the jurisdiction of the court, and both parties fill the same character as they fill in the plaintiff’s suit, the defendant may, at the first hearing of the suit, but not afterwards unless permitted by the court, present a written statement containing the Particulars of the debt sought to be set off.

38. Overton v Banister (1844) An infant, fraudulently misrepresenting herself to be of age, obtained from her trustees a sum of stock to which she was entitled only on coming of age Subsequently she instituted a suit against the trustees to compel them to pay over again the stock which they had improperly transferred to her during her minority The court held that the infant could not enforce payment over again, for although the receipt of an infant is ineffectual to discharge a debt, yet as the infant had misrepresented her age, she could not set up the invalidity of the receipt.

39. 4. HE WHO COMES INTO EQUITY MUST COME WITH CLEAN HANDS General Meaning A party seeking an equitable remedy must not himself be guilty of unconscionable conduct and show that his past record is clean The ‘uncleanness’ must relate directly to the matter in hand , otherwise anyone might be denied a remedy simply because he was of bad character . Quite similar to the previous maxim but differs from it in looking to the past conduct of the party seeking equity rather the future conduct.

40. A. Specific Relief Act, 1877 A plaintiff’s unfair conduct will disentitle him to an equitable relief of specific performance of the contract under Ss. 17, 18 and 20 of this Act . Where the plaintiff is guilty of fraud and undue influence as detailed under S. 18 or where there is a contract to sell or let property by a plaintiff who has no title as specified under S. 17, specific performance will not be granted to the plaintiff.

41. A. Specific Relief Act, 1877 The jurisdiction to specific performance under section 20 is discretionary and the court is not bound to grant such a relief merely because it is lawful to do so. The Court’s discretion is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction, by a court of appeal.

42. B. Trusts Act, 1882 Section 23: Liability of Breach of Trust: Where the trustee commits a breach of trust, he is liable to make good the loss which the trust-property or the beneficiary has thereby sustained, unless the beneficiary has by fraud induced the trustee to commit the breach , or the beneficiary , being competent to contract, has himself, without coercion or undue influence having been brought to bear on him, concurred in the breach, or subsequently acquiesced therein, with full knowledge of the facts of the case and of his right as against the trustee .

43. Differences between two maxims He who seeks equity must do equity Does not proceed on the assumption of unconscionable conduct of the plaintiff He who comes into equity must come with clean hands Where the plaintiff’s conduct is unfair and the defendant has no separate claim, this maxim would apply

44. Differences between two maxims He who seeks equity must do equity Exposes the condition subsequent to the relief sought He who comes into equity must come with clean hands Works as a condition precedent to seeking equitable relief

45. Differences between two maxims He who seeks equity must do equity The plaintiff has to mould his behaviour according to the impositions; by the court He who comes into equity must come with clean hands If the plaintiff’s conduct is unfair and unconscionable , it would not entitle him to the relief sought

46. Differences between two maxims He who seeks equity must do equity The plaintiff has an option or a choice before him either to submit to the conditions put by the court or to get out of the court He who comes into equity must come with clean hands The plaintiff’s equitable right can neither be recognised , nor enforced as his inequitable conduct takes away his choice

47. 5. DELAY DEFEATS EQUITIES General Meaning Where an injured party has been slow to demand a remedy for a wrong which he has for a long time regarded with apparent indifference, the court will decline to give him that remedy on grounds of public policy

48. Lord Camden in Smith v Clay (1767) “A Court of Equity has always refused its aid to stale demands , where a party has slept upon his right and acquiesced for a great length of time. Nothing can call forth this Court into activity, but conscience, good faith, and reasonable diligence ; where these are wanting, the Court is passive, and does nothing.”

49. Two Prevalent Doctrines

50. Doctrine of Acquiescence Acquiescence is an assent to an infringement of rights , either express or implied from conduct, by which right to equitable relief is normally lost. It takes place when a person with full knowledge of his own rights and of any acts which infringe them, has, either at the time or after infringement, by his conduct led the person responsible for the infringement to believe that he has abandoned his rights . It is different from agreement, concurrence or from coinciding.

51. Doctrine of Laches Delay which is sufficient to prevent a party from obtaining an equitable remedy is technically called ‘ laches’ (literal meaning: slackness). Plaintiff’s unreasonable delay is a weapon of defence by the defendant against the plaintiff. If the plaintiff is passive and apathetic to his rights for a considerably longer time than prescribed, his delay does not remain a mere delay but a delay that has worked to his disadvantage.

52. Basic Difference Acquiescence A conduct which is evidence of an intention by a party conducting himself to abandon an equitable right. It connotes an active permission Laches Negligence or omission to assert a right which operates as a bar in court of equity Laches is a passive state

53. 5. DELAY DEFEATS EQUITIES Recognition in Bangladesh: The English doctrine of acquiescence and laches can not be imported into Bangladeshi law in view of the applicable law Limitation Act, 1908, which fixes a time limit for suits to be filed. The equitable remedy of specific performance can be availed only if the suit is filed within one year of the incident under S. 113 of this Act. Still there is a limited scope of recognition.

54. The Specific Relief Act, 1877 Section 56: Injunction when refused: An injunction cannot be granted-  ( h) to prevent a continuing breach in which the applicant has acquiesced ; (j) when the conduct of the applicant on his agents has been such as to disentitle him to the assistance of the Court ;

55. 6. EQUALITY IS EQUITY E quity will tend towards the adoption of equal division of any fund to which several persons are entitled . By its very nature, common law courts zealously preferred and protected individual interests to common interests . But equity regarded and maintained the rights of all those who were connected by any common obligation

56. Peculiarities of Joint tenancy

57. What is joint tenancy? When property is given to two or more persons without words of severance , it is held concurrently with the other. Against strangers all such holders are regarded as one individual

58. Main incidents of joint tenancy

59. Main incidents of joint tenancy

60. Equity’s dislike for joint tenancy As equity is concerned with the present and certainty, the imperfect and speculative measure of chance introduced by the doctrine establishing right to survivourship , was disliked by equity. Equity severed joint tenancy on the slightest pretext by putting such construction on the words as to avoid the principle of survivourship .

61. Equity preferred tenancy-in-common in following cases - Joint purchase in unequal shares Joint loan on mortgage Purchase by partners

62. Application of this Maxim Equal distribution of joint funds or joint purchases Contribution between co-trustees, co-sureties, and co-contractors Rateable distribution of legacies Marshalling of assets

63. A. Contract Act Section 42: Devolution of joint liabilities When two or more persons have made a joint promise , then, unless a contrary intention appears by the contract, all such persons during their joint lives, and after the death of any of them his representative jointly with the survivor or survivors , and after the death of the last survivor, the representatives of all jointly, must fulfil the promise

64. A. Contract Act, 1872 Section 43: Any one of joint promisors may be compelled to perform When two or more persons make a joint promise , the promisee may , in the absence of express agreement to the contrary, compel any one or more of such joint promisors to perform the whole of the promise. Each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears from the contract. If any one of two or more joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares .

65. Black’s Law Dictionary A surety is one who at the request of another, and for the purpose or securing to him a benefit, becomes  responsible  for the  performance  by the latter of some act in favor of a  third person

66. A. Contract Act, 1872 Section 146: Co-sureties liable to contribute equally Where two or more persons are co-sureties for the same debt or duty , either jointly or severally, and whether under the same or different contracts, and whether with or without the knowledge of each other, the co-sureties , in the absence of any contract to the contrary, are liable , as between themselves, to pay each an equal share of the whole debt , or of that part of it which remains unpaid by the principal debtor.

67. A. Contract Act Section 147: Liability of co-sureties bound in different sums Co-sureties who are bound in different sums are liable to pay equally as far as the limits of their respective obligations permit .

68. A. Contract Act Section 69: Reimbursement of person paying money due by another in payment of which he is interested A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other .

69. A . Contract Act, 1872 Section 70: Obligation of person enjoying benefit of non- gratuitous act: Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously , and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.

70. What is Marshalling ? Where there are two creditors of the same debtor, one creditor having a right to resort to two funds of the debtor for payment of his debt, and the other a right to resort to one fund only, the court will so ‘marshal’ or arrange the funds that both creditors are paid as far as possible.

71. Example of Marshalling The court will order the first creditor to be paid as far as possible out of the fund against which the second creditor has no claim, so as to leave as much as possible of the second fund for payment of the second creditor.

72. Example of Marshalling If the first creditor has already paid himself out of the second fund, the Court will allow the second creditor to stand in the first creditor’s shoes and resort to the first fund to the extent to which the second fund has been exhausted by the first creditor.

73. A. Contract Act Section 69: Reimbursement of person paying money due by another in payment of which he is interested A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other .

74. A . Contract Act, 1872 Section 70: Obligation of person enjoying benefit of non- gratuitous act: Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.

75. B. Transfer of Property Act, 1882 Section 56: Marshalling by subsequent purchaser If the owner of two or more properties mortgages them to one person and then sells one or more of the properties to another person, the buyer is in the absence of a contract to the contrary, entitled to have the mortgage-debt satisfied out of the property or properties not sold to him , so far as the same will extend, but not so as to prejudice the rights of the mortgagee or persons claiming under him or of any other person who has for consideration acquired an interest in any of the properties .

76. C . Code of Civil Procedure Section 73: Proceeds of execution-sale to be rateably distributed among decree-holders ( 1) Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets , after deducting the costs of realization, shall be rateably distributed among all such persons

77. 7. EQUITY LOOKS INTO INTENT RATHER THAN FORM General Meaning: Courts of Equity make a distinction in all cases between that which is matter of substance and that which is matter of form ; and if they found that by insisting in the form, the substance will be defeated, it holds it to be inequitable to allow a person to insist on such form, and thereby defeat the substance. Equity tends to avoid technicalities

78. Lord Romily , Master of the Rolls Courts of Equity make a distinction in all cases between that which is matter of substance and that which is matter of form; And if they found that by insisting on the form, the substance will be defeated, they hold it to be inequitable to allow a person to insist on such form, and thereby defeat the substance.

79. Nature of Equity

80. Application of this maxim in Bangladesh

81. A . Contract Act, 1872 Sec 55- Effect of failure to perform at fixed time, in contract in which time is essential When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before a specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee , if the intention of the parties was that time should be of the essence of the contract.

82. B. Contract Act, 1872 Sec 74: Compensation for breach of contract where penalty stipulated for When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.

83. 8. Equity Looks O n T hat As D one W hich Ought T o B e Done As between two persons , where one of them has incurred an obligation and undertaken upon himself to do something for the other , the equity courts look on it as done and as producing the same results as if the obligation or undertaking had been actually performed.

84. Doctrine of Conversion Sir Thomas Sewell, in the case of Fletcher v Ashburner , Nothing was better established than the principle that money directed to be employed in the purchase of land, and land directed to be sold and turned into money, are to be considered as that species of property into which they are directed to be converted.

85. Doctrine of Conversion Sir Thomas Sewell, in the case of Fletcher v Ashburner , …and this, in whatever manner the direction is given: whether by will, by way of contract, marriage articles, settlement, or otherwise, and whether the money is actually deposited, or only covenanted to be paid, whether the land is actually conveyed or only agreed to be conveyed. The owner of the fund or the contracting parties may make land money, or money land.

86. English Doctrine of Conversion

87. English Doctrine of Conversion

88. In the case of Bai Dosabai v Mathurdas Govinddas (1980) “The English doctrine can not be lifted from its native English soil and transplanted into statute-bound Indian law. However, many of the doctrines of English equity have taken statutory form in India and have been incorporated in occasional provisions of various Indian statutes and where a question of interpretation of such equity-based statutory provisions arises, aid from the equity source can be justifiably sought”

89. Transfer of Property Act: Part Performance Sec 53A . Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has , in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract , and the transferee has performed or is willing to perform his part of the contract ,

90. Transfer of Property Act: Sec 53A then, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof .]

91. 9. EQUITY IMPUTES AN INTENTION TO FULFIL AN OBLIGATION Where a person has undertaken an obligation his later conduct will, if possible, be interpreted as fulfillment of that obligation.

92. Trust Act Section 92: Purchase by person contracting to buy property to be held on trust Where a person contracts to buy property to be held on trust for certain beneficiaries and buys the property accordingly, he must hold the property for their benefit to the extent necessary to give effect to the contract.

93. 10. Equity Acts in Personam Decrees of equity were regarded not merely as decisions concerning the rights and properties in dispute but as decrees, decisions and directions, addressed to the individual party or parties.

94. 10. Equity Acts in Personam In England, there was a distinction drawn between the jurisdiction of the law courts and that of the chancery court. Courts of law had jurisdiction over property as well as persons and their coercive power arose out of their ability to adjust ownership rights. Courts of equity had power over persons . This distinction helped preserve a separation of powers between the two courts.

95. 11. Where the equities are equal, the first in time shall prevail + 12. Where there is equal equity, the law shall prevail

96. Principle of Priority These two maxims, taken together, express the principle regarding ‘priority’ Here ‘Priority’ means that which pre-exists or is first in rank. Priority is the right of a party to satisfy its own claim of interest first in comparison to others

97. When is Priority important? Questions of priority or precedence may arise where there are rival conveyances of land or assignments of beneficial interests in trust funds. Usually such questions arise in connection with mortgages.

98. General Meaning The maxim ‘Where the equities are equal, the first in time shall prevail’ lays down that “as between persons having only equitable interests, when all other tests give way and are not able to decide whose equitable interest came into being first, the test of time is the deciding factor.

99. Who should be paid first? A is owner of a property, the market value of which stands at 20,000 Taka. A mortgages this property to B obtaining 15,000 Taka from B. A again mortgages the property to C. He then obtained 10,000 Taka from C. If B and C both desire to satisfy their claims from the property at the same time, it becomes insufficient.

100. General Meaning The other maxim, ‘where there is equal equity, the law shall prevail’ goes to explain that – 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 favour will succeed.

101. “Qui prior est tempore, potior est jure” He who is first in time is stronger than law

102. Basic Rule of Equitable Priorities At law, as in equity, the basic rule is that estates and interests primarily rank in the order of creation

103. Where there are two competing equitable interests, the general rule of equity is that the person whose equity attached to the property first will be entitled to priority over the other. Where the equities are equal and neither claimant has the legal estate, the first in time prevails.

104. Re Samuel Allen & Sons Ltd. Case A company hired machinery from X under a hire-purchase agreement by which the property in the machinery was not to pass to the company until all instalments had been paid. A right was given to X to remove the machinery on the company’s failure to pay an instalment . The machinery was fixed on the business premises of which the company was the legal owner, and so the legal interest in the machinery vested in the company. Afterwards the company created an equitable mortgage of the premises in favour of a mortgage who had no notice of the hire-purchase agreement .

105. Can X exercise his right to remove the machinery when company fails to pay instalment ?

106. It was held that X’s right to remove fixtures was an equitable interest in the land, and that as it had attached before the equitable mortgage was created, it had priority over the mortgagee’s right

107. Equitable Doctrine of Notice Knowledge of a fact which would make a rational man act in the light of the knowledge so acquired

108. Application of this Doctrine A person who purchases an estate, though for value, after notice of a prior equitable claim, becomes a mala fide purchaser and takes subject to that right. He cannot beget in the legal estate and defeat such prior claim.

109. Application of this Doctrine A purchaser for valuable consideration who obtains a legal estate at the time of his purchase without note of a prior equitable right, is entitled to priority in equity as well as in law. Here equity follows the law, the purchaser’s conscience not being in any way affected by the equitable right.

110. Rules as to Notice Notice is an important information which sets a man thinking On it rests the starting point of a legal action as contemplated by the legislature. Notice must be given to an interested person and should be clear, distinct and unambiguous. Notice shall be signed, dated and served on the proper person

111. Purchaser is affected by notice of equity in three cases

112. Whose interest is stronger? A agrees with B to sell his property for 5 lakh Taka. But in breach of the above agreement, A sells the property to C for 6 lakh taka. A makes a document and hands over the possession of the property to C giving him a legal interest in the property. B did not get any legal interest in the property but has an equitable interest in his favour binding A’s conscience.

113. Fraud, Estoppel and Gross Negligence A person with a prima facie claim to priority for his interest may be postponed through fraud, estoppel or gross negligence Thus a mortgagee who enables the borrower to represent the property as being unincumbered may be estopped from asserting his rights against a subsequent mortgagee who is deceived. He may also be postponed by gross negligence in failing to obtain the title deeds.

114. Justice James Fitzjames Stephen “They are rather minims than maxims, for they give not particularly great, but a particularly small amount of information…they mostly serve as good indexes to the law, are mostly bad abstracts of it.”