bound to them? I have no space here for the discussion of these questions, which can only be stated now. The This old will is interesting from another point of view. earliest date hitherto known for the separate existence of the two Societies of the Temple is 1440. This will of 1404 contains a bequest to Roberto mancipio medii Templi.' W. C. BOLLAND. 1 'A Calendar of the Inner Temple Records' (1896). 'A Calendar of the Middle Temple Records' (1903). 403 THE INCONSISTENCIES OF THE DOCTRINE OF Oto present the most dificulty to students; and this is not F all the principles of equity, the doctrine of conversion seems surprising when it is realized how utterly impossible it is to reconcile the decisions with any consistent theory of the subject. What is surprising is that the textbooks give hardly any indication of the inconsistency which is the real source of the difficulty. With one accord, having stated the doctrine, they proceed to expound the decisions as if they all flowed quite simply and naturally from one general principle, so that no difficulty ought to be experienced in grasping the rules the courts have laid down. The inconsistency of the cases becomes apparent, however, if the reasons which have been given for the decisions in them are carefully investigated 1. The doctrine is stated in the oft-quoted passage from the judgment of Sir Thomas Sewell M.R., in the case of Fletcher v. Ashburner 2, as follows: 'Money directed to be employed in the purchase of land and land directed to be sold and turned into money are to be considered as that species of property into which they are directed to be converted; and this in whatever manner the direction is given, whether by will, by way of contract, marriage articles, settlement or otherwise; and whether the money is actually deposited or only covenanted to be paid, whether the land is actually conveyed or only agreed to be conveyed, the owner of the fund or the contracting parties may make land money or money land.' But perhaps the statement of Lord Justice Bowen in the case of Attorney-General v. Hubbuck 3 is even better: 'It is an established principle in equity that when money is directed or agreed to be turned into land, or land agreed or directed to be turned into money, equity will treat that which is agreed to be, or which ought to be, done as done already, and impresses upon the property that species of character for the purpose of devolution and title into which it is bound ultimately to be converted.' 1 See the masterly series of articles by the late Professor Langdell in the Harvard Law Review, vol. xviii. pp. 1, 83, and 245, and vol. xix. pp. 1, 79, 233, and 321, to which the writer is largely indebted. 2 (1779) I Bro. Ch. 497; Wh. & Tud. L. C. Eq., 7th ed., vol. i. 327. 3 (1884) 13 Q. B. D. at p. 289. It is commonly said that the doctrine proceeds upon the principle or maxim that equity regards that as done which has been agreed or which ought to be done, and there are two principal classes of transactions which cause the doctrine to be applied: (a) A contract for sale or purchase of land. (b) A trust for sale or purchase of land. It is desirable to deal with these separately. (a) Contract for sale or purchase. If A contracts to sell Blackacre to B in fee and dies before executing the conveyance, in equity the property is converted as from the date of the contract; that is to say, although the legal estate in Blackacre devolves (subject to Part I of the Land Transfer Act, 1897) on A's heir or devisee, as the case may be, the right to receive the purchase-money will devolve through A's personal representatives on his next of kin or residuary legatee 1. The reason for this is that A's personal representatives have the right in equity to enforce specific performance of the contract, i. e. to compel B to pay his purchase-money, which they must exercise if required, on behalf of those entitled to the deceased's personal estate, to whom, of course, on the contract being performed, the money belongs. That this is so is shown clearly by the authorities. ViceChancellor Kindersley put the matter in the plainest way in 1861: The only reason why a contract by the owner of land for the sale of it to another operates to effect a conversion, is that a court of equity will compel him specifically to perform his contract. A court of equity considers that as done which ought to be done, and which it will compel to be done. . . . Conversion as arising from a contract to sell is merely and exclusively the consequence of the application by a court of equity of the doctrine of specific performance. Where there can be no specific performance there can be no conversion 2.' Mr. (afterwards Lord) Justice Fry gave a similar explanation a little later: 'The conversion of property, which means the treating it as belonging to somebody else before it has been actually transferred to that other person, results from a contract which can be specifically enforced; so that where there is no specific performance of contract possible, there is no conversion. It flows in effect from the principle of equity which considers that done which ought to be done, and which the court can compel to be done, and it extends so 1 See per Kindersley V.-C. in Haynes v. Haynes (1861) 1 Dr. & Sm. at p. 432. 2 Haynes v. Haynes (1861) 1 Dr. & Sm. at p. 451. far back as these circumstances exist and no farther. In other words, when there is a contract capable of being specifically enforced as from the date of that contract and neither earlier nor later, the property comprised in the contract is deemed to belong to the purchaser and the money to be paid is to be deemed to belong to the vendor, because those two things ought to be done 1.' Similarly, if A contracts to sell Blackacre to B in fee, and B dies before conveyance, B's heir, if he died intestate, is entitled to call on B's personal representative to pay the purchase-money to A, and obtain a conveyance of the property to him, the heir. But again, in order for him to be able to do so, he must show that there was a binding contract at the death of the ancestor, and one which could be specifically enforced. 'Two things must exist at the death of the testator; first a valid contract, and secondly one which could be enforced against an unwilling purchaser,' to quote Sir J. (afterwards Lord) Romilly, or in the words of Sir William Grant: The inquiry must be whether at his death a contract existed by which he was bound and which he could be compelled to perform 3.' If, therefore, for any reason specific performance could not be obtained against the purchaser, his heir would have no equity, and the doctrine would not apply. Lord Eldon himself may be vouched for this: 'If at his death he could not be compelled to take, clearly the heir could not say to the executor, "I will have the estate; and you shall pay for it "4" It may be said that the question should be not whether the contract could be enforced against the deceased, but by the deceased, since the equitable conversion depends on the devolution of the right to have money laid out in land, or vice versa, and there are cases in which the contract might be enforced by the deceased, though not against him. But this not so because it is said, although the deceased himself, if alive, might elect to take the estate, yet when he is dead the Court cannot speculate upon what he would or would not have done; so that the inquiry must be whether 1 Edwards v. West (1878) 7 Ch. D. at p. 862; see also per Jessel M. R. in Lysaght ▼. Edwards (1876) 2 Ch. D. at p. 506; and per Kay J. in Thomas v. Howell (1886) 34 Ch. D. at p. 169, and the argument of Lord Eldon when Mr. Scott in Lawes v. Bennett (1785) 1 Cox at p. 170. 2 Garnett v. Acton (1860) 28 Beav. at p. 337. 4 Broome v. Monck (1805) 10 Ves. at p. 606. at his death a contract existed which he could be compelled to perform 1. So far, then, all is plain enough, and numerous cases are to found in which this theory of the matter has been given effect to 2. But difficulty arises when the effect of an option to purchase land has to be dealt with. Suppose A leases Blackacre to B, giving B an option to purchase the fee simple. A then makes his will, devising all his real estate to C, and making D his residuary legatee. A dies, and after his death B exercises the option. D is entitled to the purchase-money, not C. This was the decision in the well-known case Lawes v. Bennett 3. So if A were to die intestate it would be his next of kin who would be entitled, not his heir. Now in these cases there is nothing that ought to be done' until the exercise of the option. Till then no one has any right to specific performance, there is no equity to have a conversion made. The decisions, therefore, are quite inconsistent with the principle above stated. The ground on which Sir Lloyd Kenyon M.R., who decided Lawes v. Bennett, proceeded is very obscure. He says: It is very clear that if a man seised of real estate contract to sell it, and die before the contract is carried into execution, it is personal property of him. Then the only possible difficulty in this case is that it is left to the election of Douglas [the lessee] whether it shall be real or personal . . . When the party who has the power of making the selection has elected the whole is to be referred back to the original agreement, and the only difference is that the real estate is converted into personal at a future period.' The last sentence of this passage seems to be contradictory on the face of it; if it means anything it must be that the equitable conversion takes place at the giving of the option, though the actual conversion is made later. Just as it would if A at the date of the lease had made an offer to sell the property to B, which on B's acceptance constituted a contract to sell, binding A as from the date of the offer. But the objection to this way of stating the matter is that an option is not an offer-it cannot be withdrawnit creates an obligation, and no acceptance of it need be communicated. It is, in fact, a unilateral contract. Even if the person to whom the option is given were to go so far as to promise to buy, the result is not a bilateral contract but two unilateral contracts; the two promises would not be the consideration for each other, 1 See Sugden, Vendors and Purchasers, 10th ed., 306; the passage is somewhat modified in the 14th ed., 193. 2 See for example Darby v. Darby (1856) 3 Drew. 495; Haynes v. Haynes (1861) I Dr. & Sm. 426; Steward v. Blakeway (1869) L. R. 4 Ch. 603; Edwards v. West (1878) 7 Ch. D. 858; Thomas v. Howell (1886) 34 Ch. D. 166. 3 (1785) 1 Cox, 167. 4 In re Isaacs [1894] 3 Ch. 506. |