Titles, Rights, Remedies. The domain of Equity may be considered to embrace three important heads; equitable titles, equitable rights, and equitable remedies.

Under equitable rights are accident and mistake, fraud, notice, estoppel, election, conversion and reconversion, adjustment, liens, and unconscionable stipulations.

Under equitable remedies we find specific performance, injunctions, re-execution, reformation, rescission, cancellation, account, partition, partnership bills, creditors' bills, administration suits, discovery, receivers, protection of infants and other incompetents, and quieting title.

No attempt will be made here to cover fully the lists given above. Maxims. As a part of Equity practice there have come into existence a series of maxims:

There is no right without a remedy.

Equity follows the Law.

Equity aids the vigilant, not those who slumber on their rights.
Between equal equities, the Law will prevail.

Equality is Equity.

He who comes into Equity must come with clean hands.

He who seeks Equity must do Equity.

Equity looks upon that as done which ought to be done.

Between equal equities, priority of time will prevail.

Equity imputes an intention to fulfil an obligation.

Equity acts in personam not in rem.

Equity acts specifically.

Equity regards substance rather than form.

There is hardly opportunity for extended explanation or discussion of these maxims, whose applications and value will develop at the conference with the lawyer in case of a suit in Equity.

TRUSTS

Definitions. For one reason or another it is not uncommon for someone to put into the possession of a second party, property not intended for the latter's own use but for the benefit or use of a third party. The second party then holds the property in trust for the third party, or beneficiary, who is called the "cestui que trust" while the second party is the "trustee." Smith conveys to Jones lands and securities to be held for the benefit of Smith's minor son. Jones is to pay to Smith's son interest on the securities yearly, and when the son is of age, is to convey to him all the lands and securities. It is evident that the title and possession rest in the hands of the trustee, who, however, has no real interest in the property; the real

party in interest is Smith's son, the cestui que trust. The Common Law looks to the legal title (sometimes to possession), and the cestui que trust must go to the court of Equity if his intangible interest needs protection, as it may, if the trustee fails in any considerable degree in his duty under the trust.

Express Trusts. Trusts may be express or implied. Where a trust is to be expressly created, a lawyer should be consulted; there are sufficient technicalities involved to make such procedure not only wise, but substantially necessary, in most cases. An express trust is often created by the provisions of a will.

The subject of trusts has little interest to engineers except that anyone having important dealings with a trustee under an express trust should know the terms of the trust, as the trustee's powers are limited to those created by the deed of trust; consultation with a lawyer is often advisable. Where registered bonds, or securities in the form of stock, are transferred by a trustee, it is customary now for corporations to require the filing of a certified copy of the deed of trust, an inconvenience not always anticipated by the trustee at the time of purchase.

Trustee's Duties. A trustee under an express trust is held to high standards of conduct and performance. He cannot properly act in any transaction where his personal interests may conflict with those of the cestui que trust. In his investment of trust funds, conservative action is demanded; a somewhat recognized standard requires that securities bought by a trustee be such as are legally authorized for purchase by savings banks. This rigid standard would not always be insisted on. A trustee may be held pecuniarily responsible in case of ill-advised and unprofitable investments.

Implied Trusts. Implied trusts result when in some transactions the title and the beneficial interests rest in different parties, or where a trustee has acquired personal title contrary to his duties as trustee. This class of trusts seems not to demand special attention here.

MORTGAGES

Definition. When a person wants to borrow money, it is common to require some form of security or pledge for payment of the debt. When the security is real estate, the common procedure is for the borrower or mortgagor to make a note and also to execute a "mortgage deed" in favor of the lender or mortgagee, as security for the note. Commonly this mortgage deed is in form a deed "in fee simple" to the mortgagee, but with a stipulation that, in case the debt or loan shall be paid on a certain date specified, the mortgagor shall be entitled to a reconveyance, or release

of mortgage; but in case of failure to pay, the property under the Common Law became the property of the mortgagee. The chapter on real property should be read to understand the nature of deeds and estates.

Equity of Redemption. The value of the property is almost always in excess of the debt, and the law has looked upon the forfeiture of this excess as a penalty, and a penalty is commonly regarded with disfavor by the law. The Common Law as it formerly stood, exacted the letter of the deed. The interest of the mortgagor in this excess seemed an interest which a court of Equity could, and did recognize and protect. This interest is called the "equity of redemption," and by virtue of it, under the earlier law, the mortgagor had the right at any time within twenty years to redeem the property by paying the debt with interest. Under foreclosure proceedings, or as the result of Statute Law, this right is, practically, never exercised.

An Estate. The courts have held this equitable interest to be an "estate" which may be conveyed, or devised by will, or go to the heir by descent. It is an estate under which the mortgagor retains possession or control, may lease, collect rents, and exercise substantially all of the functions of ownership; this is by virtue of the equitable title which rests in the mortgagor, while the legal title is held by the mortgagee. The mortgage now is held to be essentially a lien on the property. The law does not allow the mortgagor to part with this equity of redemption to the mortgagee at the time of executing the mortgage, nor at any later time, without consideration, and this a court, in many States, will insist shall be actual and real.

Foreclosure. Equity thus gives protection to the mortgagor, but it also looks after the interests of the mortgagee. The mortgage deed commonly contains a provision for "foreclosure" of the mortgage, under which a court of Equity arranges for a sale of the property for the payment to the mortgagee of all that is due him and for the return to the mortgagor of the excess, after the payment of proper costs and fees, so that a reasonably prompt remedy is provided. The equity of redemption, when this is done, ceases to exist.

In this country, in part through statutory enactments, Common Law jurisdiction is now exercised over these matters in many States.

ASSIGNMENT

Scope of Assignment. Under the Common Law, things not in possession, perhaps not fully in existence, could not be transferred or assigned. A court of Equity, however, will enforce such transfers or assignments in many cases.

A chance or possibility of acquiring an estate in lands is assignable. The share which a sailor will have in the profits of a voyage in fishing or whaling is assignable before the beginning of the voyage. A workman may assign his wages in advance unless some statute forbids. If a person agrees, for a consideration paid, to sell property at that time not acquired, a court of Equity will enforce the contract if the person later secures the property. A manufacturer assigns machinery not fully in existence to the purchaser who makes payment for it; when completed, creditors of the manufacturer attach it; the original purchaser will be granted the property.

Assignments for the benefit of creditors are regulated by statute in most States and will not receive attention here.

ACCIDENT AND MISTAKE

Accident Defined. When a document or paper is destroyed by accident, due perhaps to the "act of God," but certainly not due to the serious negligence or fault of the person entitled to its possession, and when the loss obstructs, or imperils the future assertion of rights dependent upon such possession, Equity may be called upon to give relief on account of this "accident." Where a construction bond, not in duplicate, is lost by accident a court of Equity may order a re-execution of the instrument, and similar action may be taken in case of a lost deed, or of other important documents. Where a penalty or forfeiture is provided for a failure to act or to respond within a definite period of time, if the failure has occurred through "accident" and without negligence or fault, Equity will give relief against the enforcement of the penalty or forfeiture, but not where a money payment only is involved. Cases may occur in engineering work where a failure to execute work at the appointed time would work forfeiture in some way, except that the element of accident intervened.

Negotiable Instruments. The loss of a negotiable instrument is a different matter, for that is good in the hands of any innocent holder for value, as will appear in a later chapter.

Mistake. Equity will also give relief in some cases of "mistake"; but this must be a mistake of fact, and not of law. A mistake as to the legal effect of an instrument is an apparent exception, and Equity will give relief in this case.

The mistake must be mutual, material, and not induced by negligence, if a writing is to be re-formed. The mistake may be due to failure to properly express what was intended in a deed or other writing; it may occur through misapprehension or ignorance of some important fact. A failure to write "with interest" in a note, when this was intended, has been corrected. When both parties intended an instrument to be under seal, an

omission to attach seals has been held to be a "mistake," to be rectified by a court of Equity. An agreement may, of course, be rescinded for fraud.

Engineer's Interest in Mistake. Engineers have a definite interest in the case where error appears on the face of an award, or where an arbitrator shows or admits circumstances constituting "mistake." The services of a lawyer are necessary in cases where accident and mistake are to be rectified and his advice thus becomes available before any action need be taken by an engineer.

FRAUD

Relief in Equity. Common Law often affords sufficient relief in many cases of fraud. Fraud vitiates a contract; fraud also constitutes a tort, and damages may be awarded at Common Law if a suit instituted is successful. While there is thus some measure of relief in Law, the remedies often fail to put the party in as good a position as before the fraud was committed, so that a court of Equity may properly assume jurisdiction. If a legal title has passed due to fraud, Equity may regard the holder of the title as a trustee for the benefit of the grantor, or may set aside the deed, as has been stated. A contract may be set aside for actual fraud, and also in the case of constructive fraud, where for instance one has taken advantage of another where confidential relations exist between them, as in the case of guardian and ward, attorney and client, trustee and cestui que trust; the decree of a court of Equity may go far to right the wrong and place the party aggrieved in a position nearly or quite as good as before the fraud was committed.

Fiduciary Character of Engineer. If an engineer unwittingly misleads a contractor as to matters preliminary to a contract, the relation of engineer to contractor is likely to be held by the courts to have sufficiently the fiduciary character to make it a case of constructive fraud, as has been suggested elsewhere.

ESTOPPEL

Definition. When A, by statement or action, has led B to do certain acts, a court of Equity will sometimes refuse to allow A to make a counter statement, however true it may be, when such a statement would lead to injustice or loss to B; even silence in some cases has the same effect as a positive act. This action is taken under the doctrine of estoppel. The point of view of some law writers is that the attempted action amounts to constructive fraud. When estoppel may be set up as a defence is a matter for the lawyer finally, but that such a remedy sometimes exists is a fact perhaps worth knowing.