Legal Dictionary of Pakistan

At equity

according to equity; by, for, or in equity.

Equity

n. 1. Fairness; impartiality; evenhanded dealing <the company's policies require managers to use equity in dealing with subordinate employees>. 2. The body of principles constituting what is fair and right; natural law <the concept of "inalienable rights" reflects the influence of equity on'the Declaration of Independence. 3. The recourse to principles of justice to correct or supplement the law as applied to particular circumstances <the judge decided the case by equity because the statute did not fully address the issue>. - Also termed natural equity. 4. The system of law or body of principles originating in the English Court of Chancery and superseding the common and statute law (together called "law" in the narrower sense) when the two conflict <in appealing to the equity of the court, she was appealing to the "king's conscience">. "Equity is that system of justice which was developed in and administered by the High Court of Chancery in England in the exercise of its extraordinary jurisdiction. This definition is rather suggestive than precise; and invites inquiry rather than answers it. This must necessarily be so. Equity, in its technical and scientific legal sense, means neither natural justice nor even all that portion of natural justice which is susceptible of being judicially enforced. It has, when employed in the language of English law, a precise, definite and limited signification, and is used to denote a system of justice which was administered in a particular court - the nature and extent of which system cannot be defined in a single sentence, but can be understood and explained only by studying the history of that court, and the principles upon which it acts. In order to begin to understand what equity is, it is necessary to understand what the English High Court of Chancery was, and how it came to exercise what is known as its extraordinary jurisdiction. Every true definition of equity must, therefore, be, to a greater or less extent, a history." George T. Bispham, The Principles of Equity 1-2 (Joseph D. McCoy ed., 11th ed. 1931).

action in equity.

See ACTION.

action in equity. An action that seeks equitable relief, such as an injunction or specific performance, as opposed to damages.

bill in equity.

See BILL (2)

book equity

The percentage of a corporation's book value allocated to a particular class of stock. Cf. BOOK VALUE; MARKET EQUITY.

charge and discharge. Equity practice. Court ordered account filings by a plaintiff and a defendant. ( The plaintiff's account (charge) and the defendant's response (discharge) were filed with a maste

claim in equity

Hist. A summary proceeding created to eliminate protracted pleading procedure in simple cases. ( The claim in equity was established in England in 1850 and abolished in 1860.

clog on the equity of redemption

An agreement or condition that prevents a defaulting mortgagor from getting back the property free from encumbrance upon paying the debt or performing the obligation for which the security was given. See EQUITY OF REDEMPTION.

contravening equity

A right or interest that is inconsistent with or contrary to a right sought to be enforced.

contravening equity.

See EQUITY.

countervailing equity

See EQUITY

court of equity

A court that (1) has jurisdiction in equity, (2) administers and decides controversies in accordance with the rules, principles, and precedents of equity, and (3) follows the forms and procedures of chancery. Cf. court of laic.

debt-equity ratio

See DEEQ1 Y RATIO

debt-to-equity ratio

A corporation's long-term debt divided by its owners' equity, calculated to assess its capitalization. - Also termed debtequity ratio; debt-to-net-worth ratio.

dismissal for want of equity.

See DISMISSAL (1).

dismissed for want of equity

(Of a case) removed from the court's docket for substantive reasons, usu. because the plaintiff's allegations are found to be untrue or because the plaintiff's pleading does not state an adequate claim. See dismissal for want of equity under DISMISSAL (1).

equity accounting method

A method of accounting for long-term investment in common stock based on acquisition cost, investor income, net losses, and dividends.

equity capital

Funds provided by a company's owners in exchange for evidence of ownership, such as stock.

equity financing

1. The raising of funds by issuing capital securities (shares in the business) rather than making loans or selling bonds. 2. The capital so raised.

equity insolvency

See INSOLVENCY.

equity jurisdiction

At common law, the power to hear certain civil actions according to the procedure of the court of chancery, and to resolve them according to equitable rules. "[T]he term equity jurisdiction does not refer to jurisdiction in the sense of the power conferred by the sovereign on the court over specified subject-matters or to jurisdiction over the res or the persons of the parties in a particular proceeding but refers rather to the merits. The want of equity jurisdiction does not mean that the court has no power to act but that it should not act, as on the ground, for example, that there is an adequate remedy at law." William Q. de Funiak, Handbook of Modern Equity 38 (2d ed. 1956).

equity jurisprudence

1. The legal science treating the rules, principles, and maxims that govern the decisions of a court of equity. 2. The cases and controversies that are considered proper subjects of equity. 3. The nature and form of the remedies that equity grants.

equity kicker

See EQUITY PARTICIPATION.

equity loan

See home equity loan under LOAN

equity of exoneration

The right of a person who is secondarily liable on a debt to make the primarily liable party discharge the debt or reimburse any payment that the secondarily liable person has made. One example is the right of a surety to call on the principal for reimbursement after the surety has paid the debt. Unlike contribution, which exists when the parties are equally liable, the equity of exoneration exists when parties are successively liable. - Also termed right of exoneration. See EXONERATION.

equity of partners

The right of each partner to have the firm's property applied to the firm's debts.

equity of redemption

Real estate. The right of a mortgagor in default to recover property before a foreclosure sale by paying the principal, interest, and other costs that are due. 0 A defaulting mortgagor with an equity of redemption has the right, until the foreclosure sale, to reimburse the mortgagee and cure the default. In many jurisdictions, the mortgagor also has a statutory right to redeem within six months after the foreclosure sale, and the mortgagor becomes entitled to any surplus from the sale proceeds above the amount of the outstanding mortgage. - Also termed right of redemption. See CLOG ON THE EQUITY OF REDEMPTION.

equity of subrogation

The right of a person who is secondarily liable on a debt, and who pays the debt, to personally enforce any right that the original creditor could have pursued against the debtor, including the right to foreclose on any security held by the creditor and any right that the creditor may have to contribution from others who are liable for the debt. - Also termed right of subrogation. See SUBROGATION.

equity participation

The inclusion of a lender in the equity ownership of a project as a condition of the lender's granting a loan. - Also termed equity kicker.

equity pleading

The system of pleading used in courts of equity. ( In most jurisdictions, rules unique to equity practice have been largely supplanted by rules of court, esp. where law courts and equity courts have merged.

equity ratio

1. The percentage relationship between a purchaser's equity value (esp. the amount of a down payment) and the property value. 2. The measure of a shareholder's equity divided by total equity.

equity security

A security representing an ownership interest in a corporation, such as a share of stock, rather than a debt interest, such as a bond; any stock or similar security, or any security that is convertible into stock or similar security or carrying a warrant or right to subscribe to or purchase stock or a similar security, and any such warrant or right.

equity stock

Stock of any class having unlimited dividend rights, regardless of whether the stock is preferred.

equity term

The period during which a court tries only equity cases.

equity to a settlement

A wife's equitable qui right, arising when her husband sues in equity for the reduction of her equitable estate to his own possession, to have all or part of that estate settled upon herself and her children. -Also termed wife's equity; wife's settlement.

equity, bill in

See BILL (2)

equity, court of

See COURT.

equity-of-the-statute rule

In statutory construction, the principle that a statute should be interpreted according to the legislators' purpose and intent, even if this interpretation goes beyond the literal meaning of the text. a Under this little-used rule, for example, if a statute defines jury-tampering to include a party's "giving a juror food or drink," the giving of cigars to a juror would also fall within that definition. Cf. GOLDEN RULE; MISCHIEF RULE; PLAIN-MEANING RULE.

gexeral replication. Equity pleading

A replication that consists of a general denial of the defendant's plea or answer and an assertion of the truth and sufficiency of the bill.

growing-equity mortgage

A mortgage that is fully amortized over a significantly shorter term than the traditional 25- to 30-year mortgage, with increasing payments each year. - Abbr. GEM.

home equity loan

A line of bank credit given to a homeowner, using as collateral the homeowner's equity in the home. - Often shortened to equity loan. See EQUITY (7).

homeowner's equity loan.

See LOAN.

in equity

In a chancery court rather than a court of law; before a court exercising equitable jurisdiction.

inequity

n. 1. Unfairness; a lack of equity. 2. An instance of injustice.

latent equity

See EQUITY.

market equity

The percentage of the total market value that a particular company's securities account for, represented by each class of security. Cf. BOOK EQUITY.

natural equity

See EQUITY (3).

owners' equity

The aggregate of the owners' financial interests in the assets of a business entity; the capital contributed by the owners plus any retained earnings. - Also termed (in a corporation) shareholders' equity; stockholders' equity. "Owner's equity is the residual claim of the owners of the business on its assets after recognition of the liabilities of the business. Owner's equity represents the amounts contributed by the owners to the business, plus the accumulated income of the business since its formation, less any amounts that have been distributed to the owners." Charles H. Meyer, Accounting and Finance for Lawyers in a Nutshell 4 (1995).

perfect equity

An equitable title or right that, to be a legal title, lacks only the formal conveyance or other investiture that would make it cognizable at law; esp., the equity of a real-estate purchaser who has paid the full amount due but has not yet received a deed. secret equity. See latent equity. 6. The right to decide matters in equity; equity jurisdiction <the court decided that the wrong was egregious enough to ignore the statute of limitations and decide the case in equity>. 7. The amount by which the value of or an interest in property exceeds secured claims or liens; the difference between the value of the property and all encumbrances upon it <thanks to the real-estate boom, the mortgaged house still had high equity>. - Also termed cushion. 8. An ownership interest in property, esp. in a business <the founders gave her equity in the business in return for all her help>. See OWNERS' EQUITY. 9. A share in a publicly traded company <he did not want to cash in his equity>.