[Eugene Volokh] ‘A Student’s Guide to the Meanings of “Equity” ’

A very helpful and interesting paper by my colleague Sam Bray — one of the nation’s top remedies scholars — which he kindly agreed to let me pass along (also available in PDF here):

equity, n.

1. The recognition of an exception to a general rule.
2. A moral reading of the law.
3. The doctrines and remedies developed in the English courts of equity, especially the Court of Chancery.

Equity is a slippery word, and hard to grasp. What makes it so slippery is its long history, and the many uses to which the word has been put. In legal usage, there are at least three different meanings for this word.

One is the recognition of an exception to a general rule. This meaning can be traced back to Aristotle. In the Nicomachean Ethics he says

the equitable is just, but not the legally just but a correction of legal justice. The reason is that all law is universal but about some things it is not possible to make a universal statement which will be correct. In those cases, then, in which it is necessary to speak universally, but not possible to do so correctly, the law takes the usual case, though it is not ignorant of the possibility of error. And it is none the less correct; for the error is not in the law nor in the legislator but in the nature of the thing, since the matter of practical affairs is of this kind from the start. When the law speaks universally, then, and a case arises on it which is not covered by the universal statement, then it is right, when the legislator fails us and has erred by over-simplicity, to correct the omission—to say what the legislator himself would have said had he been present, and would have put into his law if he had known. Hence the equitable is just, and better than one kind of justice—not better than absolute justice but better than the error that arises from the absoluteness of the statement. And this is the nature of the equitable, a correction of law where it is defective owing to its universality.[1]

Aristotle’s definition had nothing to do with equitable remedies, and it was not directed to judges. Yet it represents a highly influential idea about what equity means—equity is about the exceptional case, the unforeseen circumstance, the extension of a law to a case that is within its spirit but not quite within its letter.[2] This sense of equity can be seen in William Blackstone’s description of “equitable interpretation” of a statute:

[I]f the parliament will positively enact a thing to be done which is unreasonable, I know of no power in the ordinary forms of the constitution, that is vested with authority to control it…. But where some collateral matter arises out of the general words, and happens to be unreasonable; there the judges are in decency to conclude that this consequence was not foreseen by the parliament, and therefore they are at liberty to expound the statute by equity, and only quoad hoc [i.e., as to this] disregard it.[3]

A second meaning of equity is a moral reading of the law. An example is the foundational case for unjust enrichment in the Anglo-American legal tradition, Moses v. Macferlan.[4] In that case, even though the defendant had not committed what we would today call a tort or a breach of contract, Lord Mansfield held that the plaintiff could still recover money in an action of assumpsit: “In one word, the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money.”[5] Thus the court held that the plaintiff could recover on what would now be called a claim for unjust enrichment, not because the case was exceptional but because “equity” required it.[6]

Note that the first two senses of equity overlap. Often what leads a court to find an exception unforseen by the legislator are reasons of natural rights and justice. Consider, for example, Riggs v. Palmer,[7] where a grandson poisoned his grandfather and then tried to inherit under the grandfather’s will. The court interpreted the inheritance statute not to allow a murderer to inherit the estate of a victim. In reaching this decision, the court invoked the first meaning of equity (citing Aristotle and Blackstone) and the second (quoting maxims such as “No one shall be permitted to profit by his own fraud”). But the second meaning of equity does add something to the first one. In Aristotle’s definition, an equitable interpretation is neither more nor less than what the legislator would have wanted—it is ordinary interpretation taking into account legislative imperfection.[8]

A third meaning of equity is pervasive in law school courses: the doctrines and remedies developed in the English courts of equity, especially the Court of Chancery.

As you think about this