COMMON LAW 245
(iii) From what date does conversion by contract begin to operate.
Conversion becomes operative from the moment when the contract is made.
In the case of option to purchase, conversion takes place as from the execution of the lease.
For the purposes of profits etc., the property remains real estate until the option is exercised, so that the rents and profits are taken by the heir entitled to Realty.
For the purposes of devolution, it is personality.
Conversion by direction of the owner. —Whether contained in a deed or a will.
- Two things are necessary for conversion by deed or will :
(i) There must be a direction to sell or purchase Realty.
(ii) There must be some person in existence who can be said to have the right to insist upon the direction being carried out Conversion is always for the benefit of some person. If there is no person to claim the benefit, then there need be no conversion.
- In order to effect a conversion, the direction must be imperative. If direction is only optional, there will be no conversion and property will be treated as real or personal, according as to the actual condition in which it is found.
N OTE . —For a difference between a direction which is really optional and a direction which is apparently optional but really imperative See Earlom vs. Saunders—(1754) Ambler’s Reports 241.
Direction, if it is optional, must be express. Otherwise it will always be held to be imperative.
- Distinction must be made between direction to sell or purchase Realty and discretion as to the time at which sale or purchase shall be made :
(a) If the direction is imperative, mere fact that it is accompanied by discretion, will not prevent conversion having its effect.
(b) If the direction is imperative, the fact that those to whom the direction was given have failed to carry it out, will not prevent conversion having its effect.