DOCTRINES OF EQUITY

Definition

A doctrine is a rule or principle of law, especially when established by precedent or it is

a set of general principles, which govern the way in which equity operates by illustrating
the qualities of equity. The Court of Chancery applied the doctrines and maxims
interchangeably. These are Conversion, Election, Satisfaction and Performance.

1. DOCTRINE OF CONVERSION

Conversion is the equitable invention of turning money into land and land into money
or turning personal property into real property and vice versa, from the moment of
expression of intention of the owner of the property that such should be the situation. It
matters not to equity that actual conversion has not taken place.

The doctrine of equitable conversion was developed to fulfil the intention of the testator
or the contractors based upon the maxim that equity regards as done that which ought to
have been done. The second ancient reason for the evolution of the doctrine of conversion
was to ensure that Trustees, either through sale or purchase, do not defeat the interest of
beneficiaries of the trust by failing to carry out their obligation. Since money was
considered land and land considered money in equity, it mattered not that the trustees
did not actually convert them into the species of property the settlor intended them to be
converted. This reason is still relevant today. The conversion becomes effective from the
date one showed his intention to have the trust property converted i.e. the date of the
instrument expressing the intention (in cases of deed) and the date of testator’s death (in
cases of will).

In Fletcher v. Ashburner (1779), it was observed, “Nothing was better established than
this 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”.
In Sweetapple v Bindon (1705), a Testator (mom) bequeathed £300 to be used for the
purchase of land (property) to be used by her daughter and grandchildren. The daughter
died and no land had been purchased. The husband of the daughter claimed for the fund
of £300 and the claim was upheld. The court held that although no land had been
purchased, the doctrine of conversion regarded the money as realty (real property).

Situation when Doctrine will not be applied

In Clay v. Landreth, (1948), Plaintiff and defendant contracted for sale and purchase of a
plot for the purpose of erecting thereon a storage plant for ice-cream and frozen fruits.
Subsequently the section was rezoned from business to residential property by municipal
ordinance. The plaintiff sought for specific performance by application of doctrine of
equitable conversion whereby the plaintiff would be considered the owner of the
purchase money and the defendant would be owner of the plot. Trial court denied relief.
On appeal, the decision was affirmed. Equitable conversion should not be applied
because of resulting hardship to purchaser.

In this case, the contract was no longer capable of performance due to the municipal
ordinance which rezoned the area from business to residential.

Rules relating to Equitable Doctrine of Conversion

a) The doctrine will only apply if the intention of the parties showed that conversion
should take effect. b)
b) Application is also limited to cases where it will not produce inequitable results.
c) Conversion is applied at the discretion of the court, like all equitable principles, it
is not a matter of right.
d) Conversion will not be ordered where hardship will be created on the defendant
especially where there is a subsequent change in conditions not contemplated by
the parties at the time of making the contract.
2. DOCTRINE OF ELECTION

Election is a principle applied by courts to enable them to secure a just distribution in

accordance with the general scheme of the instrument. According to Lord Cairns,
“where a deed or will allow to make a general disposition of property for the benefit
of a person named in it, such person cannot accept a benefit under the instrument
without at the same time conforming to all its provisions, and reject every right not in
agreement with them.” In other words, a person may not take a benefit and reject an
associated burden or., choose between parts of a single transaction.

Birmingham v. Kirwan (1805). As Lord Redesdale simply put it; “the general rule is,
that on cannot accept ¢ same instrument, and this is the foundation of the law of
election.

Conditions for Election/Essentials of Election

a) Intention on the part of the testator or testatrix to dispose of certain property;

b) That the property should be the testator’s or testatrix’s own property: and

¢) That the gift should be given by will to the true owner of the property (i.e the person
electing)

The basis of this doctrine is the maxim ‘Equity imputes an intention to fulfil an
obligation’.

3. DOCTRINE OF SATISFACTION

Where a person is under an obligation to do one thing but does another, the
performance of that other thing may be held to satisfy the earlier legal obligation.
Satisfaction was defined by Lord Romilly as ‘the donation of a thing with the intention
that it is to be taken either wholly or in part in extinguishment of some prior claim of
the donee’.

The doctrine of Satisfaction may be considered under four heads:

a) Satisfaction of debts by legacies (concerned with payment of debts)

b) Satisfaction of legacies by legacies (construction of wills)

¢) Satisfaction (or ademption) of legacies by portions (concerned with payment of

debts)
e) Satisfaction of portion-debts by legacies or by portions (Equity leans against
double portions).

Satisfaction is normally treated as one topic but in reality each is concerned with
different subject-matter and with a different legal context. The first is concerned with
payment of debts; second is concerned with construction of wills: third is concerned
with payment of debts and; fourth is concerned with the rule “Equity leans against
double portions (the rule that a father is presumed not to intend one child of his to
receive a double benefit, to the unfairness of the others).

4. DOCTRINE OF PERFOMANCE

Generally, performance is closely related to satisfaction and in the older cases, one
finds that what would now be classified as performance is commonly referred to as
‘satisfaction by implication’.

The principle is that ‘where a man covenants to do an act, and he does an act which
may be converted to a completion of this covenant, it shall be supposed that he meant
to complete it'—in other words, ‘that a person is presumed to do what which he is
bound to do; and if he has done anything, that he has done it in pursuance of his
obligation’.

This doctrine is applicable in these situations:

i). Agreement to purchase land:

Where a man has covenanted to purchase and settle land, or to convey and settle land,
or to pay money to trustees to be laid out by them in the purchase of land, and has
failed to carry out his obligation, but has nevertheless, subsequently to the covenant,
purchased lands, the court will, under this doctrine, presume that the purchase was
made in performance or part-performance of the covenant.
ii) Agreement to leave money:

Where a man has covenanted that he will leave, or that his executors will pay, a sum
of money or a share of his personality to another person and then dies intestate, if that
other person has taken a share of the personality under the law of intestate succession,
such share is presumed to be taken in performance, or part-performance, of the
covenant. The leading case is Blandy v Widmore, in which by marriage articles, a man
covenanted to leave his wife £620 on his death. He died intestate but the wife’s share
on intestacy was worth more than £620. It was held that this must be taken in
performance of the covenant.