Equities are equal first in time shall prevail
INTRODUCTION:
It has been broadly stated that as between equities merely that which is prior in time will prevail. A more precise statement is that as between equal equities, the first in order of time will prevail but even this and equivalent forms of stating the rule have been criticized as inaccurate. It is essential to the application of this maxim that the interest of both claimants shall be purely equitable, for if one in addition to an equal equity has also the legal title he will prevail irrespective of the element of time.
MEANINGS OF THE MAXIM:
As Held Rice vs. Rice:
By priority, we mean precedence that which co-exists foregoes or is first in rank. Priority is the right of a party to satisfy its claim of interest first in comparison to others.
Vice-Chancellor Kindersley:
As between persons having only equitable interests, if their equities are in all other respects equal, priority of time gives the better equity."
Black’s Law Dictionary:
When two persons have similar rights in respect of the same subject matter, but one is entitled to exercise his right to the exclusion of the other, he is said to have priority."
APPLICATIONS OF THE MAXIM:
Conveyance to Two Different Persons:
A vendor conveyed land to a purchaser without receiving the purchase money. The deed of conveyance contained a receipt for the money by the vendor, who delivered the title deeds to the purchaser.
Two Legal Mortgages:
In the case of two legal mortgages of a legal estate inland created by the grant of successive leases, the second would prima facie be postponed to the first.
Lease and Mortgage Rights:
A company hired machinery from A under a hire-purchase agreement. The condition was that the machinery would not pass to the company until all the installments were paid
Satisfaction of Two Claimants:
A mortgages his property to B. He again mortgages it to C. The market price of the property is Rs. 20,000. A has obtained Rs.15,000 from B and Rs. 10,000 from C. If B and C both desire to satisfy their claims from the property at the same time which is insufficient to satisfy both, the question arises as to whose claim should be satisfied first or who should be paid first.
LIMITATIONS OF THE MAXIN
Knowledge of Prior assignment:
Knowledge of prior assignment by the person advancing money results in the loss of his priority even if he gives notice first but the knowledge acquired after advancing is no bar to aiming priority.
Last Report:
The test of priority in time is the last resort to and does not prevail when any other equitable ground for preference exists.
Meritorious and Stronger Equity:
Where the respective equities are not equal, the stronger or more meritorious one will prevail regardless of which accrued first in order of time
RECOGNITION IN PAKISTAN:
Section 48 of the Transfer of Property Act (priority of rights created by transfer) incorporates this principle.
CONCLUSION:
In determining the relative merits of opposing equities, nontechnical rules are applied and the question is determined on the broad principles of right and justice peculiar to courts of equity. The collateral incidents of the transaction may give either claim priority over the other, such as the presence or absence of notice or trepanned or non-payment of a valuable consideration. The rule will not be applied against a preference given by a recording act.
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