230 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
1. In the two former cases the competition was between a legal right and an equitable right. In the third case the competition is between two equitable rights.
Cave vs. Cave, (1880) 15 Ch. D. 639.
Facts :
A Trustee & B a beneficiary.
A purchased land from trust-monies in breach of trust and executed a legal mortgage thereof to C.
C had no notice of the trust.
Later by an equitable mortgage transferred the same land to There are three persons who have acquired rights. C, who has a legal right, is mortgagee, being a legal mortgage.
B has an equitable right flowing out of A ’s right which has been transferred.
D has an equitable right flowing out of A’s right.
What is the position of the parties ?
1. As between C and B, although B’s Equitable right is prior to C’s legal right as C had no notice, C takes priority.
2. As between C and D, C takes priority, because C is not party to a fraud in creating the rights of D.
3. As between B and D, their rights are equitable rights: whose right prevails ? B’s right. The rule is that where there is a competition between two equitable rights, the right earlier in origin prevails over the subsequent right.
4. This rule applies only where the equitable rights have equal equities on their side. If the equities are unequal, the better of the two prevails.
Rice vs. Rice. 2. Drewry, 73 (76-78).
A sells land to B and without receiving purchase money
(1) conveys land to B, (2) signs a receipt for moneys and
(3) delivers title-deeds to B. B subsequently mortgages the property to C who has no notice of A’s claim. Between A and