The distinction between law and equity has thus become historical merely, but it has not for that reason ceased to demand attention. It is not only a matter of considerable theoretical interest, but it has so left its mark upon our legal system, that its comprehension is still essential even in the practical study of the law.
1. The term equity possesses at least three distinct though related senses. In the first of these, it is nothing more than a synonym for natural justice. Aequitas is aequalitas—the fair impartial, or equal allotment of good and evil—the virtue which gives to every man his own. This is the popular application of the term, and possesses no special juridical significance.
2. In a second and legal sense equity means natural justice, not simply, but in a special aspect; that is to say, as opposed to the rigour of inflexible rules of law. Aequitas is contrasted with summum jus, or strictum jus, or the rigor juris. For the law lays down general principles, taking of necessity no account of the special circumstances of individual cases in which such generality may work injustice. So also, the law may with defective foresight have omitted to provide at all for the case in hand, and therefore supplies no remedy for the aggrieved suitor. In all such cases in order to avoid injustice, it is needful to go beyond the law, or even contrary to the law, and to administer justice in accordance with the dictates of natural reason. This it is that is meant by administering equity as opposed to law; and so far as any tribunal possesses the power of thus supplementing or rejecting the rules of law in special cases, it is, in this sense of the term, a court of equity, as opposed to a court of law.
The distinction thus indicated was received in the juridical theory both of the Greeks and the Romans. Aristotle defines equity as the correction of the law where it is defective on account of its generality,[[27]] and the definition is constantly repeated by later writers. Elsewhere he says:[[28]] “An arbitrator decides in accordance with equity, a judge in accordance with law: and it was for this purpose that arbitration was introduced, namely, that equity might prevail.” In the writings of Cicero we find frequent reference to the distinction between aequitas and jus. He quotes as already proverbial the saying, Summum jus summa injuria,[[29]] meaning by summum jus the rigour of the law untempered by equity. Numerous indications of the same conception are to be met with in the writings of the Roman jurists.[[30]]
The doctrine passed from Greek and Latin literature into the traditional jurisprudence of the Middle Ages. We may see, for example, a discussion of the matter in the Tractatus de Legibus of Aquinas.[[31]] It was well known, therefore, to the lawyers who laid the foundations of our own legal system, and like other portions of scholastic doctrine, it passed into the English law courts of the thirteenth century. There is good reason for concluding that the King’s courts of that day did not consider themselves so straitly bound by statute, custom, or precedent, as to be incapable upon occasion of doing justice that went beyond the law.[[32]] It was not until later that the common law so hardened into an inflexible and inexpansive system of strictum jus, that aequitas fled from the older courts to the newly established tribunal of the Chancellor.
The Court of Chancery, an offshoot from the King’s Council, was established to administer the equity which the common law had rejected, and of which the common law courts had declared themselves incapable. It provided an appeal from the rigid, narrow, and technical rules of the King’s courts of law, to the conscience and equity of the King himself, speaking by the mouth of his Chancellor. The King was the source and fountain of justice. The administration of justice was part of the royal prerogative, and the exercise of it had been delegated by the King to his servants, the judges. These judges held themselves bound by the inflexible rules established in their courts, but not so the King. A subject might have recourse, therefore, to the natural justice of the King, if distrustful of the legal justice of the King’s courts. Here he could obtain aequitas, if the strictum jus of the law courts was insufficient for his necessities. This equitable jurisdiction of the Crown, after having been exercised for a time by the King’s Council, was subsequently delegated to the Chancellor, who, as exercising it, was deemed to be the keeper of the royal conscience.
3. We have now reached a position from which we can see how the term equity acquired its third and last signification. In this sense, which is peculiar to English nomenclature, it is no longer opposed to law, but is itself a particular kind of law. It is that body of law which is administered in the Court of Chancery, as contrasted with the other and rival system administered in the common law courts. Equity is Chancery law as opposed to the common law. The equity of the Chancery has changed its nature and meaning. It was not originally law at all, but natural justice. The Chancellor, in the first days of his equitable jurisdiction, did not go about to set up and administer a new form of law, standing side by side with that already recognised in the Court of Common Pleas. His purpose was to administer justice without law, and this purpose he in fact fulfilled for many a day. In its origin the jurisdiction of the Chancellor was unfettered by any rules whatever. His duty was to do that “which justice, and reason, and good faith, and good conscience require in the case.”[[33]] And of such requirements he was in each particular case to judge at his own good pleasure. In due time, however, there commenced that process of the encroachment of established principle upon judicial discretion, which marks the growth of all legal systems. By degrees the Chancellor suffered himself to be restricted by rule and precedent in his interpretation and execution of the dictates of the royal conscience. Just in so far as this change proceeded, the system administered in Chancery ceased to be a system of equity in the original sense, and became the same in essence as the common law itself. The final result was the establishment in England of a second system of law, standing over against the older law, in many respects an improvement on it, yet no less than it, a scheme of rigid, technical, predetermined principles. And the law thus developed was called equity, because it was in equity that it had its source.
Closely analogous to this equity-law of the English Chancellor is the jus praetorium of the Roman praetor. The praetor, the supreme judicial magistrate of the Roman republic, had much the same power as the Chancellor of supplying and correcting the deficiencies and errors of the older law by recourse to aequitas. Just as the exercise of this power gave rise in England to a body of Chancery law, standing by the side of the common law, so in Rome a jus praetorium grew up distinct from the older jus civile. “Jus praetorium,” says Papinian,[[34]] “est quod praetores introduxerunt, adjuvandi vel supplendi vel corrigendi juris civilis gratia, propter utilitatem publicam.” The chief distinction between the Roman and the English cases is that at Rome the two systems of law coexisted in the same court, the jus praetorium practically superseding the jus civile so far as inconsistent with it; whereas in England, as we have seen, law and equity were administered by distinct tribunals. Moreover, although the jus praetorium had its source in the aequitas of the praetor, it does not seem that this body of law was ever itself called aequitas. This transference of meaning is peculiar to English usage.[[35]]