of the prior incumbrance, he shall give effect to it, whether registered or not (7). (450) It is certainly a most righteous principle (m), that a person who has notice of the just claim of another shall not avail himself of any formal defect in the title of that other so as to oust his rights, yet, in the cases to which we now refer, to uphold this principle is almost to infringe a rule juris positivi. Conscientious dealings be tween parties Equity corrects the imperfections of common law whenever there are relations existing between the parties which the common law is unable to take cognizance of, and yet which materially affect their mutual rights and duties; for instance, suppose a man, knowing that he gether by some has a good title to land in the possession of another, allows him *to expend money upon it, and then ejects him; and that he then brings an action for mesne profits, here common law could not allow a set-off in the action of the money connected to relation of con fidence is enforced, notwithstanding legal rights. [*58] expended, yet the action would be unjust without such allowance; a court of equity would, in such a case, interfere (n). Accounts be &c. In the case of accounts between partners, a court of common law will not entertain an action by a man against his partner; to supply this omission, then, is the province of a court of equity. (451) Similar cases arise tween partners, between coexecutors, and corporators. Again, actions of general account are quite admissible, yet the form of an action is very inconvenient for the investigation of complicated accounts; although, therefore, a court of equity is not the proper tribunal for a mere money demand, yet, from its power to investigate intricate facts, it has long exercised jurisdiction in cases of complicated accounts (0); Complicated accounts. (1) Neve v. Le Neve, Amb. 436; Davis v. Strathmore, 16 Ves. 419; Tunstall v. Trappes, 3 Sim. 301. As between persons who claim in invitum, and not by contract, such as judgment creditors, notice is immaterial. Benham v. Keane, 3 De G. F. & J. 318. (m) See Dig. lib. 4, tit. 3. (n) Cowder v. Lewis, 1 Y. & C. 427. (0) The great facility for references of actions to arbitration under the Common Law Procedure Act, 1854, may perhaps now diminish the number of suits in equity founded upon complicated accounts. (450) The doctrine of notice and its operation in favor of the prior unrecorded incumbrance equally applies throughout the United States. See Farnsworth v. Childs, 4 Mass. 637; Hewes v. Wiswell, 8 Greenl. (Me.) 94; Rogers v. Jones, 8 N. H. 264; Forrest v. Warrington, 2 Desauss. 254; Roads v. Symmes, 1 Ohio, 281; Cambridge Village Bank v. Delano, 48 N. Y. (3 Sick.) 326. But if one affected with notice conveys to another without notice, the latter is as much protected as if no notice had ever existed. And a purchaser with notice may protect himself by purchasing the title of another bona fide purchaser for a valuable consideration without notice. Bumpus v. Platner, 1 Johns. Ch. 213; Jackson v. Given, 8 Johns. 137; Schafer v. Reilly, 50 N. Y. (5 Sick.) 61, 68; Webster v. Van Steenberg, 46 Barb. 211; Ely v. Wilcox, 26 Wis. 91; Church v. Ruland, 64 Penn. St. 432; Bracken v. Miller, 4 Watts & Serg. 102. It seems, however, that a tenant in common with notice cannot avail himself of his co-tenant's want of notice on deriving title from him by partition. Blatchley v. Osborn, 33 Conn. 226. See more fully, ante, vol. 1, 619, note 296. (451) It is a general rule that suits at law cannot be sustained between partners. So there can be no suit at law between firms having a common member. Green v. Chapman, 27 Vt. 236: Burley v. Harris, 8 N. H. 235; Portland Bank v. Hyde, 2 Fairf. (Me.) 196; Eastman v. Wright, 6 Pick. (Mass.) 320; Graham v. Harris, 5 Gill & J. (Md.) 489; Rogers v. Rogers, 5 Ired. Eq. (N. C.) 31; Englis v. Furniss, 4 E. D. Smith, 587; Haven v. White, 39 Ill. 509. See 1 Wait's Pr. 669. and where there is any relation of confidence existing between the parties, such, for instance, as that of principal and agent, the case seems still more naturally to fall within the jurisdiction; but unless the accounts are mutual, and not consisting of payments and receipts on one side only, or at least very complicated, or the confidential relation is clear, the court will refuse to entertain the case (p). (452) Another inaccurate account of equity, as regards the rules of interpretation of laws or instruments adopted by it, is that it deter- [* 59] Equity deter to the spirit. mines according to the spirit of the rule, and not the strictness mines according of the letter (q); and no doubt this is a favourite maxim of the court, but it by no means is a canon on interpretation belonging peculiarly to this court. There is not a single rule of interpreting laws which is not equally used by all judges, as well those of courts of law as of courts of equity. The law on this subject was laid down, long ago, as follows (r):"From which cases it appears that the sages of the law heretofore have construed statutes quite contrary to the letter in some appearance, and those statutes which comprehend all things in the letter they have expounded to extend but to some things, and those which generally prohibit all people from doing such an act they have interpreted to permit some people to do it, and those which comprehend every person in the letter they have adjudged to reach to some persons only, which expositions have always been founded upon the intent of the legislature, which they have collected sometimes by considering the cause and necessity of making the act, sometimes by comparing one part of the act with another, and sometimes by foreign circumstances, so that they have ever been guided by the intent of the legislature, which they have always taken according to the necessity of the matter, and according to that which is consonant to reason and good discretion." The construction of an act of parliament, therefore, is the same in all courts (453); or if they differ, it is only as one judge may differ from another judge in the same court, a difference which, from the difficulty which exists in framing statutes, so as to be free from ambiguity, unhappily not unfre account of these orders. It was, however, (p) The case of Smith v. Leveaux, 2 De G. J. & S. 1, where the Lords Justices overruled Lord Hatherley, then V.-C. Wood, was perhaps a rather hard case, where this rule was enforced. There, the defendants, a commercial firm, agreed with the plaintiff to pay a percentage of 3 per cent. upon all orders which might be given by persons introduced by him. The bill was for a discovery and (452) In matters of account which are mutual and complicated, or where a discovery is required, or a multiplicity of suits will be avoided, or the remedy at law is not full and adequate, or fraud, or accident, or mistake is connected with the subject, courts of equity have jurisdiction; but where none of these characteristics exist, the mutual dealings of the parties result in causes of action or matters of set-off cognizable only at law. Cummins v. White, 5 Blackf. (Ind.) 356. And see White v. Hampton, 10 Iowa, 238; Knotts v. Tarver, 8 Ala. 743; Walker v. Cheever, 35 N. H. 339; McLaren v. Steapp, 1 Ga. 376; Printup v. Mitchell, 17 id. 558. (453) It is the duty of every court of justice, whether of law or of equity, to consult the intention of the legislature; and, in the discharge of this duty, a court of equity is not invested with a larger or a more liberal discretion than a court of law. 1 Story's Eq. Jur., § 14. quently occurs. It comes oftener within the province of a court of equity, acting as it does in the administration of property, to give constructions to executory instruments, such as wills, agreements for settlement, * and [*60] the like; and in doing this, judicial liberality in the interpretation of language is often very largely called into play, but no rule of interpretation peculiar to the court is ever contended for (s). For instance, suppose a deed of settlement purporting to be made in pursuance of articles does not carry into effect what a court of equity would construe as the intention of the articles, a court of law adheres to the construction of the deed, and disregards the articles (t); and so also would a court of equity, so long as no proceedings have been taken to reform the settlement (u), even though the case was such that a court of equity would, probably, in a suit instituted for the purpose, reform the settlement (x). It has also been said (y) that FRAUD, ACCIDENT, and TRUST, are the proper and peculiar objects of a court of equity. This, again, is an inaccuAnother defini- rate view to give of the subject, because, although under these tion that fraud, three heads fall a very large number of the cases which require the interference of a court of equity, yet they fail in being a basis of classification, for courts of law have power to deal, and do Insufficiency of deal, with numerous cases which also involve these same ele accident, and trusts are pecu liar objects of equity. the definition. Accident. ments. Fraud is equally cognizable, and equally adverted to, in a court of law, as in a court of equity, and therefore cannot simpliciter be claimed as a foundation of jurisdiction. (454) Again, formerly there were divers strict rules of legal procedure, such as that requiring profert of an instrument constituting the foundation of an action, which were not dispensed with, even though the non-profert was explained on some reasonable ground of accident; for instance, that a deed had been lost, or was in the hands of a person who refused to produce it, and [* 61] consequently it was necessary to resort to equity to obtain a relaxation of such rules. But since courts of law have so far modified their rules as to make due provision for these difficulties, it has resulted that accident rarely now forms a satisfactory reason for equitable interference: and in most cases, where the jurisdiction is allowed to exist at all, it is merely because, having been once acquired, it cannot be afterwards lost or abandoned. (455) Of those few cases which, resting upon the ground of accident, (8) See remarks of L. J. Knight Bruce upon the construction of documents in Key v. Key, 4 De G. M. & G. 84, adhered to in Ware v. Watson, 7 ib. 259. (t) Doe d. Daniel v. Woodroffe, 10 M. & W. 608. (u) Hammond v. Hammond, 19 Beav. 29; Holliday v. Overton, 15 Beav. 480. (x) Bold v. Hutchinson, 25 L. J. Ch. 598. (454) See Jackson v. King, 4 Cow. 207; Jackson v. Myers, 18 Johns. 425; Wakeman v. Dalley, 51 N. Y. (6 Sick.) 27; S. C., 10 Am. Rep. 551; Mayne v. Griswold, 3 Sandf. 463, 479; S. C., 9 N. Y. Leg. Obs. 25. (455) In the case of lost bonds the jurisdiction of courts of equity affords relief more complete, adequate and perfect than can be done by courts of law. Carter v. Jones, 5 Ired. Eq. (N. C.) 196; Deans v. Dortch, 5 id. 331; Allen v. State Bank, 1 Dev. & B. Eq. (N. C.) 1. Where a mortgage upon land to secure personal support had been accidentally lost, it was held competent for a court of equity to decree the execution of a new mortgage. Lawrence v. Lawrence, 42 N. H. 109. But see Hoddy v. Hoard, 2 Carter (Ind.), 474. So it is are such that relief can still only be obtained in a court of equity, we may Defective execu- mention, as an example, that of a defective execution of a power. tion of a power. If a man, having a power to appoint a fund, and intending to execute it, does so by will, when, perhaps, the power requires a deed, or where some other formalities in executing the power, not of the essence of the act, have not been observed, these are accidental circumstances which render the execution of the power bad at law; yet equity has always, if there was some good moral reason for supporting the execution of the power, such as to provide for payment of debts, or the support of wife or children, been ready to interfere and establish the execution of the power (z). It may here be noticed that equity has never ventured to correct a defective execution of a will, the mode of executing that particular instrument being one to which the legislature has paid especial attention; and though, through the accidental ignorance of an intending testator, he may fail to carry out his intention, this is an irremediable accident, and rightly so, for reasons sufficiently obvious. (456) As to trusts, the relation of trustee and beneficiary, or cestui que trust, is, when a trust technically so called exists, no doubt peculiarly within the jurisdiction of a court of equity, but there are many cases substantially of trust which are cognizable in courts of law; for instance, deposits and all manner of bailments, and especially that implied contract, so highly beneficial and useful, of having under- [*62] taken to account for money received to another's use, which is the ground of an action on the case almost as universally remedial as a bill in equity. (457) And there are cases where courts of law take notice even of trusts, commonly so called; for instance, a court of law allows an executor or administrator to retain for a debt owing to a trustee under a trust of which the executor or administrator is the cestui que trust (a). Trusts. The above in All these descriptions of equity, then, as distinguished from law, in our system of administration of justice, are, as we see, inaccurate and incomplete; and yet, to no inconsiderable extent, they assist the mind in accurate defini- comprehending what portion of the whole area of justice is taken possession of by the Court of Chancery. For equity does, in each department of natural justice indicated by these descriptions, go farther, and take a wider and less restricted view than courts of law do, and so it is tions contain some truth. (2) Chapman v. Gibson, 3 Bro. C. C. 229; Tollet v. Tollet, 2 P. W. 489. (a) Roskelley v. Godolphin, Raym. 483; S. C. 2 Show. 403; and Skinner, 214; Marriott v. Thompson, Willes, 186; Loane v. Casey, 2 held that where a deed containing an error reformable in equity is lost, the execution of a new and correct deed may be decreed. Hudspeth v. Thomaston, 46 Ala. 470. As to relief in equity in case of a lost note, see Hopkins v. Adams, 20 Vt. 407; Ross v. Wright, 12 Ga. 507; Crawford v. Summers, 3 J. J. Marsh. (Ky.) 300; Bridgford v. Masonville, etc., Co., 34 Conn. 546. (456) In cases of defective execution of powers, a court of equity will (unless there be some countervailing equity) interpose, and grant relief in favor of a purchaser (Schenck v. Ellingwood, 3 Edw. Ch. 175), creditors (Dennison v. Goehring, 7 Barr. [Penn.] 175), a wife, a child, and a charity; but not in favor of the donee of the power, or a husband, or grandchildren (Porter v. Turner, 3 S. & R. [Penn.] 108), or remote relations, or strangers generally. 1 Story's Eq. Jur., § 95. See Kearney v. Vaughan, 50 Mo. 284; Stewart v. Stokes, 33 Ala. 494. (457) See 1 Story's Eq. Jur., § 60; 2 id., § 1256. VOL. II.-9 able to approach somewhat nearer to that complete and perfect result, the attainment of which is scarcely to be hoped by the most sanguine. Fraud in the eye of this court In a court of equity, many actions, not criminal in themselves, nor even done with a wrong intention, are scrutinised, and often disapproved of and set aside, when to impugn them in a court of law would be impossible. (458) There have been cases, indeed, in which equity has been thought to have gone too far in attempting to enforce a scrupulous adherence to conscientious dealing, and the rules of the court have consequently been relaxed in this respect (b). may exist with- [*63] Dealings between persons connected by confidential relations. * When there are dealings between persons standing in a relation of confidence to one another, or so connected that one is liable to be under the influence of the other, the court most jealously watches over and controls their transactions, and readily interferes to prevent any abuse of the confidence, and prevent any undue exercise of the influence so existing. The exact limits of this jurisdiction, which has frequently and justly been said to be of the most salutary kind, have advisedly never been defined, but "it cannot be too freely applied either as to the persons between whom, or the circumstances in which, it is applied" (c). It extends to "all the variety of relations in which dominion may be exercised by one person over another" (d). It would lead us too far if we were to follow this principle into all the numerous relations to which it has been applied, for bills to set aside transactions of this character are of daily occurrence; the commonest classes of cases are those where the transactions are between parent and child (e), guardian and ward (f), solicitor and client (g), and surgeon and patient (h): it may be added, that if the benefit be con[*64] ferred upon third parties who have taken no part in the transaction, and are therefore innocent of all fraud, still they will not be allowed to retain that which comes through a polluted channel (i). (459) (b) This has recently been the case as to the rule of the court, that a purchaser of a reversion bears the burden of proving that he gave full value. See 31 Vict. c. 4, which enacts, s. 1, that no purchase made bonâ fide, and without fraud or unfair dealing, of any reversionary interest in real or persona estate shall be set aside merely on the ground of undervalue. (c) Per Sir G. Turner, in Billage v. Southee, 9 Hare, 540. See, also, Tate v. Williamson, L. R. 2 Ch. 55; Rhodes v. Bate, L. R. 1 Ch. 252. (d) Per Sir S. Romilly, arguendo in Hugue nin v. Baseley, 14 Ves. 28; and see Dent v. Bennett, 4 M. & Cr. 277 (where Lord Cottenham approves of Sir S. Romilly's proposition); Norton v. Rally, 2 Eden, 286, where an annuity granted by a woman in a state of religious delusion to her spiritual adviser was set aside. In a very recent case of Lyon v. Home, L. R. 6 Eq. 655, large gifts by a woman, im pressed with the belief of spirits, to the person who represented himself as the "medium" of communication with her late husband's spirit, was set aside. (e) Cocking v. Pratt, 1 Ves. 401; Wright v. Vanderplank, 2 K. & J. 1; Hoghton v. Hoghton, 15 Beav. 278. The cases of this class, which are very numerous, extend to a person who has placed himself in loco parentis; Archer v. Hudson, 7 Beav. 551; and as to elder and younger brothers, see Sercombe v. Saunders, 34 Beav. 382. (f) Hylton v. Hylton, 2 Ves. 549; Hatch v. Hatch, 9 Ves. 292. (g) Proof v. Hines, Ca. t. Tall. 116; and see Lord Brougham's judgment in Hunter v. Atkins, 3 M. & K. 135. As to the relationship of counsel and client, ante, p. 24. (h) Billage v. Southree, 9 Hare, 534. (i) Bridgman v. Green, Wilm. 58, 64; 2 Ves. 627. (458) See Warner v. Daniels, 1 Wood. & Min. 103; Bullock v. Narrott, 49 Ill. 62; Baker v. Kline, 106 Mass. 61; Waddingham v. Loker, 44 Mo. 132. (459) As to transactions between parent and child, see Slocum v. Marshall, 2 Wash. C. C. 397; Taylor v. Taylor, 8 How. (U. S.) 201; Brice v. Brice, 5 Barb. 533; Jenkins v. Pye, 12 Peters (U. S.), 253; Leddel's Exr. v. Starr, 5 C. E. Green (N. J.), 274 ; Comstock v. Comstock, 57 Barb. 453. Between other family relations, see Sears v. Shafer, 6 N. Y. (2 Seld.) 268: Boney v. Hollingsworth, 23 Ala. 690; Hewitt v. Crane, 2 Halst. Ch. (N. J.) 159, 631; Turner |