Equity and the Law of Trusts - Essay Example

Running head: EQUITY AND LAW Equity and Law [Click here and type [Click here and type your s Equity and the Law of Trusts It can be said that the entire concept of laws of the courts was more of an "accident of history" (Wikipedia: Equity) which did date back to the medieval times to the 13th century. But this is not the court of law that we are most impressed upon today, but, merely an court that enforced what the King would pronounce law at the time of his reign. It was not until the 15th century that the Chancery was provided the rights to hold judicial power in the arena of Equity Trusts and upon further guidance by the Chancery, by the late 17th century, there was the appointment of lawyers by the Chancellor. Many inroads have taken place to provide the ability by lawyers and the Chancery to ensure proper body of rules, ethics and the framework for delivery of land laws. Development of Equity and Trust Laws It seems apparent that the coming of age for equity and trust laws were indeed based upon medieval cultures and moral judgments of the day, as the Chancellor of medieval times was in fact based on religious right and not trained in legal matters. One of the major problems of the day was the fact that disputes were not settled within the courts but rather on a county by county diversity which usually involved whatever each of the districts followed as part of their own judicial accounting. By 1529, a properly trained lawyer took the appointment of Chancellor and thus a new era was cemented with respect to proper documents being recorded and kept which would ultimately lead to many important doctrines to be formed outlining equity laws. "In modern practice, perhaps the most important distinction between law and equity is the set of remedies each offers." (Wikipedia: Equity) Resulting from this modernization of a medieval practice, it would be fair to state that through the development of equity laws since the medieval times is defined only by what the rewards would normally reap for judgments. During earlier times, payment would have been comparative to the time and era. For instance, in modern times, it would lean more towards the monetary rewards and not so much in material value. Differences between Equity and Trust Laws To understand how the laws of equity were derived from trust laws of the English court system, it is important to define each. "Equity is the name given to the portion of the legal system, in countries following the English common law tradition that resolves disputes between persons by resorting to principles of conscience, fairness and justness. Equity comes into play typically when none of the parties to the dispute has done anything against the law, but their rights or claims are in conflict." (Wikipedia: Equity) Trust laws were derived from this definition of equity system of law governance and is described as In common law legal systems, a trust is a relationship in which a person or entity (the trustee) holds legal title to certain property (the trust property or trust corpus), but is bound by a fiduciary duty to exercise that legal control for the benefit of one or more individuals or organizations (the beneficiary), who hold "beneficial" or "equitable" title. The trust is governed by the terms of the (usually) written trust agreement and local law. The entity (one or more individuals, a partnership, or a corporation) that creates the trust is called variously the trustor, settlor, grantor, donor, or creator. This dual title (legal versus equitable) is frequently called "split title." The "title split" of trust law may be generalized colloquially as follows: legal title involves control, management, and possession, while equitable (beneficial) title involves "benefit," "enjoyment," and "use." (Wikipedia: Trust (Law) USA) There is an important distinction with respect to how equity law and trust law are governed and does date back to the early history of English law with respect to how equity law was not permeable to disputes by two parties. The "final important distinction between law and equity is the source of the rules governing the decisions." (Wikipedia: Equity) As the early laws of equity did not foretell its importance in its historical significance, early lawmakers who presided over many equity legal matters found that it was only drafted with general guidelines, known as maximums of equity, which only placated those involved in disputes with fairness and flexibility. This would only soon draw upon a need to further this obligation by the Courts to legislate common law regulations with respect to property disputes or property transference. English Judicature Acts In England, "the Judicature Acts, two Acts of Parliament in the United Kingdom, include the Supreme Court of Judicature Act 1873 (36 & 37 Vict. c. 66) and the Supreme Court of Judicature Act 1875 (38 & 9 Vict. c. 77), were designed to fuse the administration of the courts of Equity and the courts of Common Law. Both the Common Law courts and Equity courts were in disarray before the Acts were passed." (Wikipedia: Judicature Acts) Through this fusion, the distinction between the two different legal matters was more of a grey matter. Until the beginning of the 20th Century, most common law jurisdictions had two parallel court systems, courts of "law" that could only award money damages and recognised only the legal owner of property, and courts of "equity" that recognised trusts of property and could issue injunctions, orders to do or stop doing something. Although the separate courts were merged long ago in most jurisdictions, or at least all courts were permitted to apply both law and equity, the distinction between law and equity remains important in categorising and prioritising rights to property, and in the principles that apply to the grant of equitable remedies by the courts. In the United States, the distinction can determine whether the Sixth Amendment's guarantee of a jury trial applies (a determination of a fact necessary to resolution of a "law" claim) or whether the issue can only be decided by a judge (issues of equity). (Wikipedia: Common Law) By ensuring there was a distinction made between both equity and trust law, not many civil cases brought before lawmakers could effectively settle a dispute insomuch as applying proper legal statutes and equitable outcomes for both parties involved in the dispute. When equity law originated in England during medieval times to settle land and property disputes there was no common formation of law with respect to those who felt that they were not properly compensated if there was no formal document in place outlining claims to such property. "If the addition of such equitable concepts as injunctive relief and specific performance to supplement the common law was equity's paramount general contribution, the origin of the trust was its most important conceptual addition." (Glendon, Mary Ann, Goron, Michael W. & Osakwe, Christopher.) Evolution of Trust Laws Although early history was not so kind to those citizens with disputes, trust laws have evolved over time. Beginning with equity laws of the days of early Chancellors where their legal decisions were a direct reflection of the King of England's rulings with respect to laws of the land, then moving into the application of the law at its purest during its time and now the distinction of property law and common law have filled a void in the legal system that was much needed. By virtue of legal precedent, "the evolution of law began before history was recorded with laws built up one by one as disputes were settled. In fact, the development of rules in society predates both courts and the written law. For thousands of years, customary and private legal systems alone ordered human activities. The power of customary law is found in the fact that it is reflected in the conduct of people toward one another. The further a society moves away from customary and private law systems, the greater the need for laws coercively enforced by the state." (Edward Younkins, 2000) One of the more empowering vestiges of the equity law system in medieval times that was removed was the involvement of the Church in embellishing royalty to hand down legal decisions through Church Canons. "Before the Norman conquest in 1066, governance and law in England were extremely decentralized. William the Conqueror greatly contributed to the destruction of competing legal systems by completing the centralization of royal power that had been begun by Alfred the Great in the 9th Century. William and his successors worked to bring competing legal systems under royal control in order to levy fines and surcharges that would accrue to the king. By 1200, royal law dominated the legal order of England and other countries in Europe." (Edward Younkins, 2000) Once this decentralizing interference of the Church ceased once a legally educated and practicing lawmaker was made Chancellor of the Court, the separation of Church and State took effect. Distinction Between Equity and Trust Law Early historical reference indicates how ineffectual medieval lawmakers were in protecting the rights and exercising jurisprudence in defense of those citizens who brought their cases to the courts expecting fair and impartial judgments. From the time that an effectual Chancellor was put into place that would engage in definitive legal distinction between what would be considered property law and what would be considered common law, an ordinary citizen would not receive the proper legal rights decided by the courts in their disputes. An important distinction between equity and trust is the "unavailability of a jury in equity. Equitable remedies can only be dispensed by a judge as it is a matter of law and not subject to the intervention of the jury as trier of fact." (Absolute Astronomy reference: Equity) By drawing upon this distinction from the English legal system both legal and equitable judgments are a large part of what makes up the American legal system. Many of the principles of equity law were derived from English legal precedent, but once the "U.S. courts finally merged law and equity, American law courts adopted many of the procedures of equity courts, the procedures in a court of equity were much more flexible than the courts at common law. In American practice, certain devices such as joinder, counterclaim, cross-claim and interpleader originated in the courts of equity." (Absolute Astronomy reference: Equity) Conclusion It is evident throughout early legal history, especially medieval times, that the legal system was not intended to benefit the person who had a dispute that needed resolving. Early English law portrayed the systematic interference of the Church in imposing many of the early dysfunctional aspects of the legal system. As the legal system continually made improvements and officially recognized the need for distinction between property and common law, there was a movement made from purely equity legal entitlement to trust entitlement. This ensured that proper documents and legal precedent from each case would provide new legal status to those involved in trust conflicts. As the legal system moves forward in its quest to ensure that all potential trust matters are covered with a legal decision, it is important to realize that "The law is essentially discovered, not made. Law is a systemic discovery process involving the historical experiences of successive generations. Law reflects and embodies the experiences of all men who have ever lived." (Edward Younkins, 2000) References Absolute Astronomy. (n.d.). Equity. Retrieved February 19, 2006 from http://www.absoluteastronomy.com/reference/equity Glendon, Mary Ann, Gordon, Michael W. & Osakwe, Christopher, Comparative Legal Traditions (Nutshell Series), (West Publ., 1982), pp. 150-151.) Retrieved February 19, 2006 from http://www.geocities.com/CapitolHill/Senate/3616/Equity.html Wikipedia contributors (2006). Common law. Wikipedia, The Free Encyclopedia. Retrieved February 19, 2006 from http://en.wikipedia.org/w/index.phptitle=Common_law&oldid=40021645 Wikipedia contributors (2005). Judicature Acts. Wikipedia, The Free Encyclopedia. Retrieved February 19, 2006 from http://en.wikipedia.org/w/index.phptitle=Judicature_Acts&oldid=26847835. Wikipedia contributors (2006). Equity. Wikipedia, The Free Encyclopedia. Retrieved February 19, 2006 from http://en.wikipedia.org/w/index.phptitle=Equity&oldid=40281182. Younkins, Edward (2000). Capitalism and Commerce: The Evolution of Law. Retrieved February 19, 2006 from http://www.quebecoislibre.org/000805-11.htm Read More