Defining Equity: Distinctive and Constrained?

It's often instructive to compare entries in older and newer versions of Black's Law Dictionary—and on subjects I work on, the older ones are usually better. An example is the entry for equity.

Compare the fourth (1968) and eleventh (2014) editions. In particular, note that the older entry for equity (1) emphasizes more that equity is constrained internally, but also (2) emphasizes that equity is distinctive. The newer definition does not emphasize equitable constraints to the same degree, and it positively denies that equity is distinctive.

Both present equity as historically contingent (that's good). But the newer entry is much more equity skeptical–suggesting it is a pointless historical appendix, no longer connected to natural justice and no longer having any distinctive job to do. That is consistent with the regrettable epigram at the beginning of Reading Law, which quotes a false dichotomy from a great anti-equity lawyer of the eighteenth century. The older definition also gives more of the texture of equitable doctrine, including a brief elaboration of the three jurisdictions of equity, though without using the word ("That part of the law which . . . .").

One other interesting feature of the newer entry is that it can't be justified on the grounds that it cites more current authority. It reflects a sharply different conception of equity and its place within the contemporary legal firmament. But it does not rely on newer authority–I think no authority more recent than 1968 is even cited.

Here are the two entries:

"Equity" (Black's Law Dictionary, 4th edition, 1968)

EQUITY In its broadest and most general signification, this term denotes the spirit and the habit of fairness, justness, and right dealing which would regulate the intercourse of men with men,—the rule of doing to all others as we desire them to do to us; or, as it is expressed by Justinian, "to live honestly, to harm nobody, to render to every man his due." Inst. 1, 1, 3. It is therefore the synonym of natural right or justice. But in this sense its obligation is ethical rather than jural, and its discussion belongs to the sphere of morals. It is grounded in the precepts of the conscience, not in any sanction of positive law.

In a restricted sense, the word denotes equal and impartial justice as between two persons whose rights or claims are in conflict; justice, that is, as ascertained by natural reason or ethical insight, but independent of the formulated body of law. This is not a technical meaning of the term, except in so far as courts which administer equity seek to discover it by the agencies above mentioned, or apply it beyond the strict lines of positive law. See Miller v. Kenniston, 86 Me. 550, 30 A. 114.

In a still more restricted sense, it is a system of jurisprudence, or branch of remedial justice, administered by certain tribunals, distinct from the common-law courts and empowered to decree "equity" in the sense last above given. Here it becomes a complex of well-settled and well-understood rules, principles, and precedents. Isabelle Properties v. Edelman, 297 N.Y.S. 572, 574, 164 Misc. 192.

"The meaning of the word 'equity,' as used in its technical sense in English jurisprudence, comes back to this: that it is simply a term descriptive of a certain field of jurisdiction exercised, in the English system, by certain courts, and of which the extent and boundaries are not marked by lines founded upon principle so much as by the features of the original constitution of the English scheme of remedial law, and the accidents of its development." Bisp.Eq. § 11.

A system of jurisprudence collateral to, and in some respects independent of, "law," properly so called; the object of which is to render the administration of justice more complete, by affording relief where the courts of law are incompetent to give it, or to give it with effect, or by exercising certain branches of jurisdiction independently of them. This is equity in its proper modern sense; an elaborate system of rules and process, administered in many cases by distinct tribunals, (termed "courts of chancery,") and with exclusive jurisdiction over certain subjects. It is "still distinguished by its original and animating principle that no right should be without an adequate remedy," and its doctrines are founded upon the same basis of natural justice; but its action has become systematized, deprived of any loose and arbitrary character which might once have belonged to it, and as carefully regulated by fixed rules and precedents as the law itself. Burrill.

Equity, in its technical and scientific legal use, means neither natural justice nor even all that portion of natural justice which is susceptible of being judicially enforced. It has a precise, limited, and definite signification, and is used to denote a system of justice which was administered in a particular court,—the English high court of chancery,—which system can only be understood and explained by studying the history of that court, and how it came to exercise what is known as its extraordinary jurisdiction. Bisp.Eq. § 1.

That part of the law which, having power to enforce discovery, (1) administers trusts, mortgages, and other fiduciary obligations; (2) administers and adjusts common-law rights where the courts of common law have no machinery; (3) supplies a specific and preventive remedy for common-law wrongs where courts of common law only give subsequent damages. Chute, Eq. 4.

Equity is a body of jurisprudence, or field of jurisdiction, differing in its origin, theory, and methods from the common law. Laird v. Union Traction Co., 208 Pa. 574, 57 A. 987.

It is a body of rules existing by the side of the original civil law, founded on distinct principles, and claiming incidentally to supersede the civil law in virtue of a superior sanctity inherent in those principles. Maine, Anc. Law, 27.

"As old rules become too narrow, or are felt to be out of harmony with advancing civilization, a machinery is needed for their gradual enlargement and adaption to new views of society. One mode of accomplishing this object on a large scale, without appearing to disregard existing law, is the introduction, by the prerogative of some high functionary, of a more perfect body of rules, discoverable in his judicial conscience, which is to stand side by side with the law of the land, overriding it in case of conflict, as on some title of inherent superiority, but not purporting to repeal it. Such a body of rules has been called 'Equity.' " Holl.Jur. 59.

"Equity," in its technical sense, contradistinguished from natural and universal equity or justice, may well be described as a "portion of justice" or natural equity, not embodied in legislative enactments, or in the rules of common law, yet modified by a due regard thereto and to the complex relations and conveniences of an artificial state of society, and administered in regard to cases where the particular rights, in respect of which relief is sought come within some general class of rights enforced at law, or may be enforced without detriment or inconvenience to the community: but where, as to such particular rights, the ordinary courts of law cannot, or originally did not, clearly afford relief. Rob.Eq.

The remaining interest belonging to one who has pledged or mortgaged his property, or the surplus of value which may remain after the property has been disposed of for the satisfaction of liens. The amount or value of a property above the total liens or charges. Des Moines Joint Stock Land Bank of Des Moines v. Allen, 220 Iowa 448, 261 N.W. 912.

"Chancery" is synonymous and interchangeable with "equity." Const. art. 4, § 6. Ireland v. Cheney, 129 Ohio St. 527, 196 N.E. 267, 270.

– Equitable Right Equity also signifies an equitable right, i. e., a right enforceable in a court of equity; hence, a bill of complaint which did not show that the plaintiff had a right entitling him to relief was said to be demurrable for want of equity; and certain rights now recognized in all the courts are still known as "equities," from having been originally recognized only in the court of chancery. Sweet.

– Better Equity The right which, in a court of equity, a second incumbrancer has who has taken securities against subsequent dealings to his prejudice, which a prior incumbrancer neglected to take although he had an opportunity. 1 Ch.Prec. 470, note. See 3 Bouv.Inst. note 2462.

– Countervailing Equity A contrary and balancing equity; an equity or right opposed to that which is sought to be enforced or recognized, and which ought not to be sacrificed or subordinated to the latter, because it is of equal strength and justice, and equally deserving of consideration.

– Existing Equity See Existing Equity.

– Latent or Secret Equity An equitable claim or right, the knowledge of which has been confined to the parties for and against whom it exists, or which has been concealed from one or several persons interested in the subject-matter.

– Natural Equity A term sometimes employed in works on jurisprudence, possessing no very precise meaning, but used as equivalent to justice, honesty, or morality in business relations, or man's innate sense of right dealing and fair play. Inasmuch as equity, as now administered, is a complex system of rules, doctrines, and precedents, and possesses, within the range of its own fixed principles, but little more elasticity than the law, the term "natural equity" may be understood to denote, in a general way, that which strikes the ordinary conscience and sense of justice as being fair, right, and equitable, in advance of the question whether the technical jurisprudence of the chancery courts would so regard it.

– Perfect Equity An equitable title or right which lacks nothing to its completeness as a legal title or right except the formal conveyance or other investiture which would make it cognizable at law; particularly, the equity or interest of a purchaser of real estate who has paid the purchase price in full and fulfilled all conditions resting on him, but has not yet received a deed or patent. See Shaw v. Lindsey, 60 Ala. 344; Smith v. Cockrell, 66 Ala. 75.

"Equity" (Black's Law Dictionary, 11th edition, 2014)

equity n. (14c) 1. Fairness; impartiality; evenhanded dealing <the company's policies require managers to use equity in dealing with subordinate employees>.

2. The body of principles constituting what is fair and right; natural law <the concept of "inalienable rights" reflects the influence of equity on the Declaration of Independence>.

"In its popular sense it [equity] is practically equivalent to natural justice. But it would be a mistake to suppose that equity, as administered by the Courts, embraces a jurisdiction as wide and extensive as that which would result from carrying into operation all the principles of natural justice. There are many matters of natural justice wholly unprovided for, from the difficulty of framing any general rules to meet them, and from the doubtful wisdom of a policy of attempting to give a legal sanction to duties of imperfect obligation, such as charity, gratitude and kindness. A large proportion of natural justice in its widest sense is thus not judicially enforced, but is left to the conscience of each individual." R.E. Megarry, Snell's Principles of Equity 1 (23d ed. 1947).

3. The recourse to principles of justice to correct or supplement the law as applied to particular circumstances; specif., the judicial prevention of hardship that would otherwise ensue from the literal interpretation of a legal instrument as applied to an extreme case or from the literal exclusion of a case that seems to fall within what the drafters of the instrument probably intended <the judge decided the case by equity because the statute did not fully address the issue>. — Also termed natural equity.

"Lord Evershed, after referring to the old doctrine of the 'equity' of a statute, whereby the courts had a certain latitude in stretching it to cover cases not expressly dealt with, makes the interesting suggestion that it might be as well to revive this doctrine and confer on the judiciary the function of rendering an Act just and workable and of giving effect to sensible solutions, unless the terms of the Act itself precluded this. Such a change would doubtless entail a fundamental reversal of the present form of legislative drafting. Draftsmen and courts are at present engaged in a battle of wits, the draftsman seeking to anticipate the restrictive interpretations of the courts by inserting the most elaborately detailed provisions to ensure that particular situations are covered, which often has the unfortunate result of excluding from the effect of the statute equally relevant situations which were not actually thought of at the time." Dennis Lloyd, Introduction to Jurisprudence 388–89 (rev. ed. 1965).

4. The system of law or body of principles originating in the English Court of Chancery and superseding the common and statute law (together called "law" in the narrower sense) when the two conflict <in appealing to the equity of the court, she was appealing to the "king's conscience">; CHANCERY (2).

"Equity is that system of justice which was developed in and administered by the High Court of Chancery in England in the exercise of its extraordinary jurisdiction. This definition is rather suggestive than precise; and invites inquiry rather than answers it. This must necessarily be so. Equity, in its technical and scientific legal sense, means neither natural justice nor even all that portion of natural justice which is susceptible of being judicially enforced. It has, when employed in the language of English law, a precise, definite and limited signification, and is used to denote a system of justice which was administered in a particular court — the nature and extent of which system cannot be defined in a single sentence, but can be understood and explained only by studying the history of that court, and the principles upon which it acts. In order to begin to understand what equity is, it is necessary to understand what the English High Court of Chancery was, and how it came to exercise what is known as its extraordinary jurisdiction. Every true definition of equity must, therefore, be, to a greater or lesser extent, a history." George T. Bispham, The Principles of Equity 1–2 (Joseph D. McCoy ed., 11th ed. 1931).

"In its technical sense, equity may … be defined as a portion of natural justice which, although of a nature more suitable for judicial enforcement, was for historical reasons not enforced by the Common Law Courts, an omission which was supplied by the Court of Chancery. In short, the whole distinction between equity and law is not so much a matter of substance or principle as of form and history." R.E. Megarry, Snell's Principles of Equity 2 (23d ed. 1947).

"The term 'equity' is an illustration of Mr. Towkington's proposition that some words have a legal meaning very unlike their ordinary one. In ordinary language 'equity' means natural justice; but the beginner must get that idea out of his head when dealing with the system that the lawyers call equity. Originally, indeed, this system was inspired by ideas of natural justice, and that is why it acquired its name; but nowadays equity is no more (and no less) natural justice than the common law, and it is in fact nothing else than a particular branch of the law of England. Equity, therefore, is law. The student should not allow himself to be confused by the lawyer's habit of contrasting 'law' and 'equity,' for in this context 'law' is simply an abbreviation for the common law. Equity is law in the sense that it is part of the law of England; it is not law only in the sense that it is not part of the common law." Glanville Williams, Learning the Law 25–26 (11th ed. 1982).

5. A right, interest, or remedy recognizable by a court of equity <there was no formal contract formation, so they sued for breach in equity>.

– contravening equity (kon-trə-veen-ing) (1888) A right or interest that is inconsistent with or contrary to a right sought to be enforced.

– countervailing equity (kown-tər-vayl-ing) (1824) A contrary and balancing equity, equally deserving of consideration.

– latent equity (lay-tənt) (18c) An equitable claim or right known only by the parties for and against whom it exists, or that has been concealed from one who is interested in the subject matter. — Also termed secret equity.

– perfect equity. (1821) An equitable title or right that, to be a legal title, lacks only the formal conveyance or other investiture that would make it cognizable at law; esp., the equity of a real-estate purchaser who has paid the full amount due but has not yet received a deed.

– secret equity. See latent equity.

6. The right to decide matters in equity; equity jurisdiction <the court decided that the wrong was egregious enough to ignore the statute of limitations and decide the case in equity>.

7. The amount by which the value of or an interest in property exceeds secured claims or liens; the difference between the value of the property and all encumbrances on it <thanks to the real-estate boom, the mortgaged house still had high equity>. — Also termed cushion.

– negative equity. (1940) 1. The difference between the value of an asset and the outstanding amount of the loan secured by the asset when the asset's current value is less than the loan's balance. 2. A situation in which a borrower owes more on a loan that the collateral, such as a house, is worth.

8. An ownership interest in property, esp. in a business <the founders gave her equity in the business in return for all her help>. See OWNERS' EQUITY; BOOK EQUITY; MARKET EQUITY.

– private equity. Corporate stock that is not traded on a public exchange. • Investors put capital directly into a private company or buy out a public company and delist the stock in exchange for the equity interest.

9. A share in a publicly traded company <he did not want to cash in his equity>.