equity

Justice administered according to fairness as contrasted with the strictly formulated rules of common law. It is based on a system of rules and principles which originated in England as an alternative to the harsh rules of common law and which were based on what was fair in a particular situation. One sought relief under this system in courts of equity rather than in courts of law.

The term "equity" denotes the spirit and habit of fairness, justness, and right dealing which would regulate the intercourse of men with men. Gilles v. Department of Human Resources Development, 11 Cal.3d 313, 113 Cal.Rptr. 374, 380, 521 P.2d 110.

Equity is a body of jurisprudence, or field of jurisdiction, differing in its origin, theory, and methods from the common law; though procedurally, in the federal courts and most state courts, equitable and legal rights and remedies are administered in the same court.

See equity, courts of.

A system of jurisprudence collateral to, and in some respects independent of, "law"; 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.

A stockholders' proportionate share (ownership interest) in the corporation's capital stock and surplus. The extent of an ownership interest in a venture. In this context, equity refers not to a legal concept but to the financial definition that an owner's equity in a business is equal to the business's assets minus its liabilities. Value of property or an enterprise over and above the indebtedness against it (e.g., market value of house minus mortgage). Dorfman v. Dorfman, Tex.Civ.App. 457 S.W.2d 417, 422.

See real estate.

Accounting.

Paid-in capital plus retained earnings.

@ 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.

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Investment.

Ownership interest of shareholders in corporation (as opposed to bond or other debt interests).

@ 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 subjectmatter.

@ 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.

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Real estate.

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. The difference between the fair market value and debt in property; thus, an equity of $5,000 may come about by having fair market value property of $20,000 with debt of $15,000. The term came from the development in English courts of equity of the right of an owner of property to redeem his property even after a foreclosure, which right came to be known as the equity of redemption. The existence of the right was predicated on the property being of far greater value than the debt owed to the party that foreclosed

@ equity acts in personam

A basic principle of law of equity to the effect that equity grants relief in the form of personal decrees as contrasted with law which awards money damages. A necessary corollary of this principle is that equity requires personal jurisdiction to grant its relief

@ equity, bill in

@ bill in equity

The name given to the original pleading in an equity case. However, under current rules practice in most states, the "bill" has been replaced by a complaint with the procedural merger of law and equity. Fed.R. Civil P. 2

+ bill in equity

The first written pleading in a proceeding in equity. The complaint in a suit in equity

@ equity capital

Funds furnished by owners of company in return for stock or other evidence of ownership

@ equity, courts of

@ courts of equity

Courts which administer justice according to the system of equity, and according to a peculiar course of procedure or practice. Frequently termed "courts of chancery." With the procedural merger of law and equity in the federal and most state courts, equity courts have been abolished

@ equity financing

Raising of capital by corporation by issuing (selling) stock. This is contrasted with "debt financing" which is the raising of capital by issuing bonds or borrowing money

@ equity follows the law

Equity adopts and follows the rules of law in all cases to which those rules may, in terms, be applicable. Equity, in dealing with cases of an equitable nature, adopts and follows the analogies furnished by the rules of law. A leading maxim of equity jurisprudence, which, however, is not of universal application, but liable to many exceptions

@ equity jurisdiction

In a general sense, the jurisdiction belonging to a court of equity, but more particularly the aggregate of those cases, controversies, and occasions which form proper subjects for the exercise of the powers of a chancery court. In the federal and most state courts there has been a merger procedurally between law and equity actions (i.e., the same court has jurisdiction over both legal and equitable matters) and, hence, a person seeking equitable relief brings the same complaint as in a law action and simply demands equitable relief instead of (or in addition to) money damages. Fed.R. Civil P. 2.

"Equity jurisdiction," in its ordinary acceptation, as distinguished on the one side from the general power to decide matters at all, and on the other from the jurisdiction "at law" or "common-law jurisdiction," is the power to hear certain kinds and classes of civil causes according to the principles of the method and procedure adopted by the court of chancery, and to decide them in accordance with the doctrines and rules of equity jurisprudence, which decision may involve either the determination of the equitable rights, estates, and interests of the parties to such causes, or the granting of equitable remedies. In order that a cause may come within the scope of the equity jurisdiction, one of two alternatives is essential; either the primary right, estate, or interest to be maintained, or the violation of which furnishes the cause of action, must be equitable rather than legal; or the remedy granted must be in its nature purely equitable, or if it be a remedy which may also be gift by a court of law, it must be one which, under the facts and circumstances of the case, can only be made complete and adequate through the equitable modes of procedure. Norback v. Board of Directors of Church Extension Soc., 84 Utah 506, 37 P.2d 339

@ equity jurisprudence

That portion of remedial justice which is exclusively administered by courts of equity as distinguished from courts of common law. More generally speaking, the science which treats of the rules, principles, and maxims which govern the decisions of a court of equity, the cases and controversies which are considered proper subjects for its cognizance, and the nature and form of the remedies which it grants

@ equity loan

Line of credit made available by banks to homeowners with the extent at such credit based on, and secured with, built-up equity in borrower's home.

See equity (real estate).

@ Equity looks upon that as done which ought to have been done.

Equity will treat the subject-matter, as to collateral consequences and incidents, in the same manner as if the final acts contemplated by the parties had been executed exactly as they ought to have been; not as the parties might have executed them

@ equity of a statute

By this phrase is intended the rule of statutory construction which admits within the operation of a statute a class of cases which are neither expressly named nor excluded, but which, from their analogy to the cases that are named, are clearly and justly within the spirit and general meaning of the law; such cases are said to be "within the equity of the statute."

@ equity of partners

A term used to designate the right of each of them to have the firm's property applied to the payment of the firm's debts

@ equity of redemption

The right of the mortgagor of property to redeem the same (i.e., save from foreclosure) after it has been forfeited, at law, by a breach of the condition of the mortgage (i.e., default in mortgage payments), upon paying the amount of debt, interest and costs. Brown v. United States, C.A.Pa., 95 F.2d 487, 489.

See foreclosure

- redemption

@ equity ratio

Stockholders' equity divided by total assets

@ equity shares

Shares of any class of stock, whether or not preferred as to dividends or assets, having unlimited dividend rights.

See stock

equity suffers not a right without a remedy ??Sherman v. Skuse, 166 N.Y. 345, 59 N.E. 990 (1901)

@ equity term

An equity term of court is one devoted exclusively to equity business, that is, in which no criminal cases are tried nor any cases requiring the impaneling of a jury.

See equity, courts of

@ equity to a settlement

The equitable right of a wife, when her husband sues in equity for the reduction of her equitable estate to his own possession, to have the whole or a portion of such estate settled upon herself and her children. Also a similar right recognized by the equity courts as directly to be asserted against the husband. Also sometimes called the "wife's equity."

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