He Who Seeks Equity Must Do Equity
It would seem to me that every person who faces a judicial foreclosure by a servier engaged in MS fraud ought to be pleading as an equitable defense the equitable maxim "He Who Seeks Equity Must Do Equity".
This is one of the themes of pages I recently extracted from some very old equitable authorities.
Here are some excerpts from the leading texts on equity ninety years ago:
"Section 69. He Who Seeks Equity Must Do Equity. -- Another maxim of no small extent is that he who seeks equity must do equity. This maxim principally applies to the party who is seeking relief in the character of a plaintiff in the court. Thus for instance if a borrower of money upon usurious interest seeks to have the aid of a Court of Equity in cancelling or procuring the instrument to be delivered up, the court will not interfere in his favor unless upon the terms that he will pay the lender what is really and bone fide due to him. But if the lender comes into equity to assert and enforce his own claim under the instrument, there the borrower may show the invalidity of the instrument, and have a decree in his favor and a dismissal of the bill without paying the lender anything; for the court will never assist a wrong-doer in effectuating his wrongful and illegal purpose. [But if interest is paid and the lender comes into court to assert his claim, he forfeits all interest and subjects himself to teh penalties imposed for usury.] And the like principles will govern in other similar cases where the transaction is not as between the parties grossly fraudulent, or otherwise liable to just exception. Many other illustrations of the maxim of a different nature may be readily put. As where a second incumbrancer seeks relief against a prior incumbrancer who has a claim to tack a subsequent security, he shall not have it before paying both securities. So where a husband seeks to recover his wife's property, and he has made no settlement upon her, he shall not have it without making suitable settlement. So where an heir seeks possession of deeds in the possession of a jointress, he shall not have relief unless upon the terms of confirming her jointure. So where a party seeks the benefit of a purchase made for him in the name of a trustee who has paid the purchase money, but to whom he is indebted for other advances, he shall not be relieved but upon payment of all the money due to the trustee."
Commentaries on Equity Jurisprudence As Administered in England and America, 14th Edition, Vol. I, By Joseph Story, LL.D. (Boston: Little, Brown & Company, 1918)
Section III He Who Seeks Equity Must Do Equity
Section 385. Its Meaning. -- This maxim expresses the governing principle that every court of equity, in determining rights and awarding remedies, must be in accordance with conscience and good faith. In its broadest sense it may be regarded as the foundation of all equity, as the source of every doctrine and rule of equity jurisprudence; since it is undeniable that courts of equity do not recognize and protect the equitable rights of litigant parties, unless such rights are, in pursuance of the settled juridical notions of morality, based upon conscience and good faith. But as a practical principle, guiding the equity courts in their administration of justice, the maxim is only used in a much narrower and more special meaning. Even in this narrow signification it is a principle of most extensive application; it may be applied, in fact, in every kind of litigation and to every species of remedy. The meaning is, that whatever be the nature of teh controversy between two definite parties, and whatever be the nature of the remedy demanded, the court will not confer its equitable relief upon the party seeking its interposition and aid, unless he has acknowledge and conceded, or will admit and provide for, all the equitable rights, claims, and demands justly belonging to the adversary party, and growing out of or necessarily involved in the subject-matter of the controversy. It says, in effect, that the court will give the plaintiff the relief to which he is entitled, only upon condition that he has given, or consents to give, the defendant such corresponding rights as he may also be entitled to in respect of the subject-matter of the suit. THis meaning of the principle was more definitely expressed by an eminent judge in the following terms: "The court of equity refuses its aid to give the plaintiff what the law would give him if the courts of common law had jurisdiction to enforce it, without imposing upon him conditions which the court considers he ought to comply with, although the subject of teh condition should be one which the court would not otherwise enforce." In this narrow and particular sense the principle becomes a universal rule governing the courts of equity in administering all kinds of equitable relief, in any controversy where its application may be necessary to work out complete justice.
"A Treatise on Equity Jurisprudence, As Administered In The United States of America Adopted For All the States and To the Union of Legal and Equitable Remedies Under the Reformed Procedure", By John Norton Pomeroy, LL.D., 4th edition by John Norton Pomeroy, Jr., A.M., LL.B., (San Francisco, CA: Bancroft-Whitney Company / Rochester, NY: The Lawyers Co-Operative Publishing Company, 1918)
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Each of the above serves only to introduce the topic, which is more fully developed, together with a number of older case citations in the scanned pages of the original text.
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Here is the Supreme Court case which most clearly enunciates this doctine:
"It is the fundamental principle of equity that "He who seeks equity must do equity," and out of this grows the maxim that "He who comes into equity must come with clean hands." In other words, courts of equity will not enjoin one from doing a lawful act upon the application of one who, while claiming said act will cause him great and irreparable injury, is himself contributing to the injurious condition complained of. In such case the parties are in pari delicto. 11 Paige [*36] Ch. 349." Missouri v. Illinois, No. 4, Original., 200 U.S. 496; 26 S. Ct. 268; 50 L. Ed. 572; 1906 U.S. LEXIS 1494 (U.S. 1906).
Here are some recent Ohio enunciations of this doctrine:
"'... equitable relief is not available to a person who "has violated good faith by his prior-related conduct.' Marinaro v. Major Indoor Soccer League (1991), 81 Ohio App.3d 42, 45, 610 N.E.2d 450." Greer-Burger v. Temesi, No. 2006-1616, 116 Ohio St. 3d 324; 2007 Ohio 6442; 879 N.E.2d 174; 2007 Ohio LEXIS 3049 (Oh 2007)
Somewhat confusing and mixing the two maxims:
"The clean-hands doctrine specifies that 'he who seeks equity must do equity, and that he must come into court with clean hands.' Christman v. Christman (1960), 171 Ohio St. 152, 154, 12 O.O.2d 172, 168 N.E.2d 153." State ex rel. Morgan v. City of New Lexington, No. 2006-0714 , SUPREME COURT OF OHIO, 112 Ohio St. 3d 33; 2006 Ohio 6365; 857 N.E.2d 1208; 2006 Ohio LEXIS 3535 (Oh. 2006).
In this case, the 8th Court of Appeals seems to confuse and somewhat muddle the separate, but related maxims of "he who seeks equity must do equity" and "clean hands":
"We have previously recognized that a party who is seeking the equitable remedy of unjust enrichment must come to the court with clean hands. Directory Servs. Group v. Staff Builders Int'l (July 12, 2001), Cuyahoga App. No. 78611, 2001 Ohio App. LEXIS 3108. It is also a fundamental rule of equity that he who seeks equity must do equity. Id. As explained in Trott v. Trott , Franklin App. No. 01AP-852, 2002 Ohio 1077:
"The clean hands doctrine of equity [*6] requires that whenever a party takes the initiative to set in motion the judicial machinery to obtain some remedy but has violated good faith by his or her prior-related conduct, the court will deny the remedy. Marinaro v. Major Indoor Soccer League (1991), 81 Ohio App.3d 42, 45, 610 N.E.2d 450. Thus, in order for the doctrine to bar a party's claims, the party must be found to be at fault in relation to the other party and in relation to the transaction upon which the claims are based."
Moreover, "the maxim, 'He who seeks equity must come with clean hands,' requires only that the party must not be guilty of reprehensible conduct with respect to the subject matter of his suit." Basil v. Vincello (1990), 50 Ohio St.3d 185, 190, 553 N.E.2d 602." Parmatown Spinal & Rehab. Ctr., Inc. v. Lewis, No. 81996, COURT OF APPEALS OF OHIO, EIGHTH APPELLATE DISTRICT, CUYAHOGA COUNTY, 2003 Ohio 5069; 2003 Ohio App. LEXIS 4571.
"'Another maxim of no small extent is, that he who seeks Equity, must do Equity.' Joseph Story in Commentaries on Equity Jurisprudence (1836), 1:77." Secrest v. Citizens Nat'l Bank, Court of Appeals No. H-02-048 , COURT OF APPEALS OF OHIO, SIXTH APPELLATE DISTRICT, HURON COUNTY, 154 Ohio App. 3d 245; 2003 Ohio 4731; 796 N.E.2d 999; 2003 Ohio App. LEXIS 4269.
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I will try to add a few other select cases from other states to this discussion thread.
The importance of this maxim ought to be obvious. But for those who fail to fully appreciate it, I would suggest the following possible applications:
It should be noted that each of the above might be a basis for the application of the clean hands doctrine as well as the maxim "He who seeks equity must do equity".
Where a plaintiff engages in misconduct and extrinsic fraud in the service of the complaint to keep the defendant from the court
Where a plaintiff falsely alleges that the plaintiff is the owner and/or holder, when this is not in fact the case
Where a plaintiff fabricates evidence in support of its complaint
Where a plaintiff suborns the perjury of a contracted professional perjurer in support of its complaint
Where a plaintiff charges or assesses illegal, unjust and/or improper fees and predicates its complaint of foreclosure on such charges and/or assessments
Note that there is a DIFFERENCE. Clean hands would seem to implicate scienter: guilty knowledge; knowing the impropriety/illegality associated with doing certain acts.
"He who seeks equity must do equity" might NOT require scienter.
For example, suppose that the mortgage servicer ERRONEOUSLY applied late payments or fees, which precipitate a technical default. It might be a stretch to assert that this reflects unclean hands on teh part of the servicer. But failure to rectify the error or persisting in an assertion of default would rather clearly seem to be unjust or inequitable. The mortgage investor and/or servicer would NOT seem to be entitled to seek foreclosure without first remedying its own mistake.
My point here is that this maxim is one of almost UNIVERSAL APPLICATION when it comes to mortgage servicing fraud and is meritworthy of a great deal of further study and discussion.
I would encourage those who identify useful state cases embracing this equitable maxim to post those cases within this discussion thread!
As mentioned in my related post, I have scanned images of the pages pertaining to this maxim of both Justice STOREY and POMEROY's treatises on equity. E-mail me if you would like to receive a copy. (Hopefully, the web masters of the MS Fraud site will post these at the Legal Lounge!) The full text of each of these books is available for FREE at Google Books.