Court of equity

A court of equity, sometimes called a chancery court, is a type of court that applies principles of fairness rather than strict legal rules to the cases it hears. These courts began when people started sending petitions to England’s Lord Chancellor, and they mainly handled requests for remedies other than money damages, like forcing someone to do what they promised (specific performance) or issuing special orders (extraordinary writs). Eventually, most equity courts merged with regular law courts, and laws were passed that let a single court handle both common law and equity at the same time. Today, courts of equity are seen as a way to fill gaps in the common law and promote justice.

In the early United States, some states kept the English system of separate courts for law and equity, while others combined them, just as the U.S. Congress did for federal courts. Federal bankruptcy courts are one example of a court that acts as a court of equity. A few common law places, including the U.S. states of Delaware, Mississippi, New Jersey, South Carolina, and Tennessee, still keep the difference between law and equity, and between courts of law and courts of equity. In New Jersey, this split exists between the civil division and the general equity division of the New Jersey Superior Court.

**History**

The special nature of equity courts comes from how they developed over time. This history has shaped how they are used in case law, reflecting the values that built equitable jurisdiction. The changes in these courts show how equity’s rules and remedies evolved, how its main features shifted, and how social and political conditions affected its operation and deeper legal questions.

**Equity as a body of law**

Equity is now seen as a separate area of law, used by many modern courts. The way procedures grew inside equity courts has guided how equitable principles are applied. Starting from the varied rules of the early Courts of Chancery, today’s courts can handle equity cases while keeping their power to use discretion to fix new kinds of unfairness. Equity is not a standalone legal system; instead, it is about corrective justice and works alongside common law to balance out its rigid rules.

**Origin of the equity jurisdiction**

Equity first appeared in three main periods: the medieval period (13th–15th centuries), the formative period (16th–17th centuries), and the period of systematization (17th–19th centuries). Over these times, equity grew from the Chancellor giving fair relief based on personal conscience into an organized, established body of law run by courts.

**Medieval period**

The Chancery Division was set up in the 13th century by the King after the Supreme Court of Judicature was split. Under the Chancellor’s authority, the “King’s law” was used in local courts. The division did not handle actual cases but did work related to the King’s secretarial office. Even though it was not a court, there was still some judicial activity. It had limited power to decide whether writs issued in courts were valid, allowing only those that were similar to previous cases. These decisions were temporary and could be overruled by law courts if they conflicted with the actual law. As the division’s administrative work grew through its control of the King’s leftover influence, the Chancellor began handling “prayers” and “petitions,” including letters for remedies, relief, and grants on the King’s behalf. During the 14th and 15th centuries, the Chancery became a large, independent bureaucracy. Its formal job was to issue writs about inheritance or property transfers, which gave judges permission to start claims in the King’s courts.

**Formative period**

In the 16th century, the modern system of equity and the Chancellor turned into a body with recognized judicial features. As a result, the courts’ jurisdiction became more independent. This meant the Court of Chancery could issue decrees without the King’s Council, the Chancellors became skilled in law, and their role in resolving petitions became more organized. As it grew into a real judicial court with more power, other common law courts became wary and defensive about their own jurisdiction. This court had a specific jurisdiction and used different procedures than common law courts—for example, it issued a common injunction instead of the common law injunctive relief.

**Period of systematization**

The systematization of equity is often credited to Lord Eldon and the Judicature Acts of 1873. He organized the rules and principles found in modern equity today, making them more consistent and certain. As a result, equity existed alongside common law. Before this, the Courts of Chancery had problems and went through a “period of decline and stagnation” in the early 18th century. These defects included delays in cases, administrative complications, high costs, and burdensome processes.

**The High Court of Chancery**

By the early 1500s, a large part of the court’s workload came from equity cases. W.S. Holdsworth believed that the principles of equity were developed by and through the Chancery, and he identified three factors that shaped this jurisdiction: opposition to the rigidity of common law; ideas about the role of conscience in setting equitable rules; and a procedure, different from common law, that allowed the court to act flexibly.