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Clapp v. Tower

    Citation

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    Bloomberg Law

    Brief Fact Summary. The executor of Tower’s will conveyed land to Plaintiff. Plaintiff sued to quiet title against Defendants, who are the deceased’s next of kin.

    Synopsis of Rule of Law. Equitable conversion is defined as a constructive alteration in the nature of property by which, in equity, real estate is regarded as personalty or personal estate as realty. 7 Amer. & Eng.Enc. of Law (2d Ed.) 464.

    Facts. The land was sold under an executory contract to Hadley by Tower. Subsequent to this contract, Tower died. The executor foreclosed on the contract due to Hadley’s default. The executor, acting on the principle that equitable conversion applied to convert the land to personal property for purposes of administration, sold and conveyed the land to Plaintiff, who took both the deed and possession. The trial court found for Plaintiff and Defendants appealed.

    Issue. Should the land have been treated as real estate or personal property under the will probate?

    Held. The land should have been treated as personal property due to the rule of equitable conversion. Affirmed.
    Equitable conversion is defined as a constructive alteration in the nature of property by which, in equity, real estate is regarded as personalty or personal estate as realty. 7 Amer. & Eng.Enc. of Law (2d Ed.) 464.
    The vendor still holds the legal title, but only as trustee, and he in turn acquires an equitable ownership of the purchase money. His property, as viewed by equity, is no longer real estate, in the land, but personal estate, in the price; and, if he dies before payment, it goes to the administrators, and not to his heirs. Pomeroy, Equity Jurisprudence Section: 105.
    In short, equity regards the contracting parties as having changed positions, and the original estate of each as having been ‘converted’- that of the vendee from personal property into real property, and that of the vendor from real property into personal property. Pomeroy, Equity Jurisprudence Section: 105.
    In these cases, if the vendor dies prior to the completion of the bargain, provided there has been no default, the heir of the vendor may be compelled to convey, and the proceeds of the land will go to the executors as personal property.

    Discussion. An important part of the doctrine of equitable conversion is that the land is transformed by the legal fiction into personal property equal to the price due under the contract. The equitable title is in the vendee and the legal title is held by the vendor in trust for the vendee.


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