Installment 3

How did Equity Come to be?

Introduction

The amazing and complex history of America’s “equity” courts starts in England’s Chancery Courts about 600 years ago.

https://en.wikipedia.org/wiki/Equity_(law)     

https://en.wikipedia.org/wiki/Court_of_Chancery

 

Today’s American equity, which exists in tandem with the more familiar Courts of Law is the direct descendant of the English Chancery (another term for Equity court) from 6 centuries  ago which was a system designed to  bridge gaps in English law to effectively control the assets and behavior of that society’s nonproductive or even dangerous outliers. This Chancery system was finally abolished in 1873.

The Chancery’s jurisdiction over “lunatics” came from two sources: first, the King’s prerogative to look after them,  (Parens Patriae) which was exercised regularly by the Lord Chancellor, the highest officer of the Crown, who was responsible for the efficient functioning and independence of the courts, and formally presided over the Chancery Division, or the Court of Appeal; and second, the Lands of Lunatics Act, which gave the King (and therefore the Chancellor) custodianship of lunatics and their land; the Lord Chancellor exercised the first right directly and the second in his role as head of the Court of Chancery. This jurisdiction (the official power to make legal decisions and judgments) applied to any “idiots” or “lunatics”, regardless of whether or not they were British, or whether their land was within England or Wales. They were divided into two categories – idiots, “who have no glimmering of reason from their birth and are, therefore, by law, presumed never likely to attain any”,  and lunatics, “who have had understanding but have lost the use of it”. There determination of a “diagnosis” was made by a jury, unlike our current practice.

 

Idiots and lunatics had their land looked after by a court-appointed administrator, and any profits went into a trust fund to support the insane person. Due to the vested interest of the King (who would hold the lands) the actual lunacy or idiocy was determined by a jury, not by an individual judge. Under the Lunacy Act 1845 the Lord Chancellor had a right to appoint a commission to investigate the insanity of an individual; as part of his role as Keeper of the King’s conscience, however, he would only do this when it was beneficial to the lunatic, not simply because somebody had been found insane. This actual benevolence stands in stark contrast to current practice where incapacity is almost a certain ticket to a guardianship.

It was also in the best interests of the King to get orphans and street urchins off the streets where they could cause havoc when hungry or abused enough to commit crimes. There were many orphans in 19^th century England due to plagues, famine and stunning poverty as described in Dickens’ “Oliver Twist”. Because of harsh poverty, desperate men took dangerous jobs and were often killed in their line of work. Women and children were forced to do whatever they could to survive, but it was common for mothers to die at a young age because they lived in filthy homes and contracted typhoid, the flu, or other diseases. Other parents abandoned their children because they had no money or had become addicted to drugs and alcohol. As a result, many children wound up as orphans.

 

American Children’s Aid/Foster Care

In America similar issues produced large numbers of orphans as well. From the 1850s to the 1920s, orphan trains transported hundreds of thousands of children from the more populated East Coast to the Midwest and beyond where they were auctioned off to the highest bidder, generally to help work the farms.  Children who were poor, abandoned, or runaways found themselves traveling across the country to start new lives. The origins of American foster care can be tracked back to this unusual practice of shipping kids across the United States to families they never met.

[d] The American Children’s Mission to the Children of the Destitute launched the first orphan train in 1850. The Protestant charity corralled the kids by searching all over New York city to locate them. They found them in railway stations, docks, on the streets, and in other areas of the city. The kids were known as “guttersnipes.” Thirty kids traveled from Boston to New Hampshire and Vermont to find homes on the first train.

New York’s Children’s Aid launched its first orphan train in October of 1854. The train, traveling from New York City to Dowagiac, MI, carried 45 homeless children. When they arrived at their destination, local farmers and craftsmen bid on the kids in an auction. The families took the children home, where they worked in fields and in other capacities. A total of approximately 250,000 poor and abandoned children were relocated from the East Coast to the Midwest between the 1850s and 1920s. More than 100,000 children were placed in homes over the course of 75 years. And it all started with orphan trains

https://www.ranker.com/list/history-of-orphan-trains/nicky-benson

 

Today, as we will see, child welfare is a multibillion dollar big government industry and the raw materials for that industry are created in D/F courts by equity judges.

 

 What does Equity look like today?

 American Equity is the body of law initially developed in the English Court of Chancery which had been  situated in geographically separate Equity courtooms is now administered concurrently and in the same courthouses with the common law.

Today, the most important distinction between law (common law, or all the law that is not equity) and equity is the unique set of remedies each offers. The most common civil remedy a court of law can award is money damages. Equity, however, deals with issues that may not have a monetary solution by entering injunctions or decrees directing someone either to act or to refrain from acting in a certain way. Often, this form of relief is in practical terms more valuable to an injured litigant; for example, a plaintiff whose neighbor will not return his only milk cow, which had wandered onto the neighbor’s property, may want that particular cow back, not just its monetary value.

In theory, equity matters cannot even commence unless there is “no adequate remedy at law”—meaning that a money settlement alone is not enough to compensate the injured litigant. To get around this issue, Law courts can enter certain types of immediately enforceable orders, called “writs” (such as a writ of habeas corpus), but they are less flexible and less easily obtained than an injunction issued in equity.

Another distinction is that generally there are no juries in equity: the judge alone is the ultimate trier of fact. In the American legal system, the right of jury trial in civil cases tried in federal court is guaranteed by the Seventh Amendment in Suits at common law, cases that traditionally would have been handled by the law courts. The question of whether a case should be determined by a jury depends largely on the type of relief the plaintiff requests. If a plaintiff requests damages in the form of money or certain other forms of relief, such as the return of a specific item of property, the remedy is considered legal (not equity), and a jury is available as the fact-finder. On the other hand, if the plaintiff requests an injunction, declaratory judgment, specific performance, modification of contract, or some other non-monetary relief, the claim would usually be heard in equity. This helps explain why guardianship  and D/F cases (despite the large amounts of money at stake) are decided in Equity and therefore without Juries.

In the United States today, the federal courts and most state courts have merged law and equity in the courts of general jurisdiction, such as county and circuit courts to the point where they are indistinguishable to the naïve and untrained eye. However, the substantive distinction between law and equity is quite real. This difference is not a mere technicality, because the successful handling of certain law cases is difficult or impossible unless a temporary restraining order (TRO) or preliminary injunction is issued at the outset, to restrain someone from fleeing the jurisdiction taking the only property available to satisfy a judgment, for instance. Furthermore, certain statutes like Employee Retirement Income Security Act specifically authorize only equitable relief.

 

Today’s Equity evolved from contested beginnings. As a result of abuses often seen in Chancery Court in England, Equity courts were widely distrusted by settlers and politicians in the northeastern US following the American Revolution. A serious movement for merger of law and equity began in the states in the mid-19th century, when David Dudley Field II convinced New York State to adopt what became known as the Field Code of 1848. For 90 years, The US federal courts maintained the longstanding historical  separation of law and equity until the promulgation of the Federal Rules of Civil Procedure in 1938.

[c] Today three states still have separate courts for law and equity; the most notable is Delaware, whose Court of Chancery is where most cases involving Delaware corporations are decided.^[33]  Some other states (such as Illinois and New Jersey) have separate divisions for legal and Equity matters in a single court. Virginia had separate law and equity dockets (in the same court) until 2006. , Areas traditionally handled by chancery courts include wills and probate, adoptions and guardianships, and marriage and divorce. Bankruptcy was also historically considered an equitable matter; although bankruptcy in the United States is today a purely federal matter, reserved entirely to the United States Bankruptcy Courts by the enactment of the United States Bankruptcy Code in 1978. Those bankruptcy courts are still officially considered “courts of equity” and exercise equitable powers under Section 105 of the Bankruptcy Code.

After US courts merged law and equity, American law courts adopted many of the procedures of equity courts. The procedures in a court of equity were much more flexible, due to the wide latitude of the judges and the absence of strict rules or juries,  than the courts at (common) law.

So, despite being completely unknown by the vast bulk of its citizens, America has had 2 official systems of jurisprudence fully enshrined in our Constitution and volumes of legal rulings that have different rules, produce different findings, orders and have different procedures for checks and balances since its founding..

A deeper dive into history will show that that situation has always been controversial and potentially dangerous.