COMMON LAW 243
shares in Realty into Personality, so that the persons entitled to succeed would be the next of kin and not the heir.
- The following points must be noted :
(i) The order for sale must be within the jurisdiction of the Court
(ii) It is immaterial whether the purpose for which it is sold will or will not exhaust the sale proceeds. The sale may be merely to pay cost. All the same, if the order is for sale, within the jurisdiction, it will effect conversion
(iii) It is immaterial whether it is actually sold or is merely ordered to be sold. Order for sale is enough to effect conversion.
(iv) Conversion takes place from the date of the order and not from the date of the sale.
- There are two cases in which the order of the Court will not effect conversion for the purpose of inheritance.
(i) Where the Court itself makes an order that such change in the nature of the property shall not affect its devolution on death, in which case the sale proceeds will go to the heir and not to the next-of-kin.
(ii) Where the provision of some statute prohibits a change in the nature of the property from affecting its devolution e.g. Section
123 of the Lunacy Act, 1890, which provides that if the property of a lunatic is sold, the proceeds will go to persons entitled to them as though it was not sold.
(3) Conversion by operation of a Contract
When there is a binding contract to sell Realty, the Realty is treated as part of vendors Personality. Conversely, the interest of the purchaser is treated as Realty, even if he dies before completion.
This is, however, subject to one condition. That is, the contract must be one of which specific performance would be ordered by the Court— 34 Ch. D. 166.
Mere notice to treat does not suffice to bring into operation the doctrine of conversion. There will be no conversion if the contract is abortive or unenforceable.
(4) Conversion under a contract to lease with an option to purchase
A leases certain property to B for seven years, giving him by the lease an option to purchase the property at a certain price during the term. B exercises his option