sured, she ought to be able to compel him to use the insurance money in rebuilding. That is what in substance he agreed to do, and the legal remedy of damages for breach of the contract is not available because of the Statute of Frauds and would not get her what she is entitled to. But what claim has she against the insurance company? Unless the insurance money can be called an altered form of a res which she owned in equity, there would seem to be none.

In Lewis v. Hall 80 purchaser not in possession and in default gave a mortgage on crops growing on the land. He made no effort to perform and did not call for possession. It was held rightly that the mortgage did not convey anything. Because of his default he could not have held the vendor at the time when he made the mortgage and was not equitable owner unless vendor elected to treat him as such. Likewise vendor in default cannot claim that purchaser is his debtor in equity. In Lowther-Kaufman Oil Co. v. Gunnell 81 purchaser was not in possession. Third persons claimed the land and it became necessary for vendor to sue them in order to remove the cloud on his title. Purchaser refused to complete by paying the purchase money till this had been done. It was held that he was not chargeable with interest until after the decree removing the cloud had been affirmed by the highest court of the state and the title had thus become marketable.

Text writers in cases of this sort as well as in cases of risk of loss are wont to say that when the contract is in the class of those which equity will specifically enforce, vendor is "trustee of the legal title" and purchaser is "trustee of the purchase money," or that vendor is "equitable owner of the purchase money.' This unhappy mode of speech appears to begin with Lord Hardwicke in Pollexfen v. Moore.83 It has often been repeated in judicial opinions,84 and

82

§ 105.

1982

I STORY, EQUITY JURISPRUDENCE, § 790; I POMEROY, EQUITY JURISPRUDENCE,

83 3 Atk. 272, 273 (1745). The earlier case of Davie v. Beardsham, 1 Cas. Ch. 38, 39, says no more than that vendor "stood trusted" for the purchaser.

84 Estate of Dwyer, 159 Cal. 664, 675, 115 Pac. 235 (1911); Rhodes v. Meredith, 260 Ill. 138, 143, 102 N. E. 1063 (1913); Williams v. Haddock, 145 N. Y. 144, 150, 39 N. E. 825 (1895); Champion v. Brown, 6 Johns. Ch. (N. Y.), 398, 403 (1822).

85 The ob

is to be seen in several decisions during the past year.8 jections to this mode of stating the equitable doctrine are clear enough. Vendor is much more like a mortgagee than like a trustee and purchaser cannot be called trustee of anything in any proper use of the term "trust." What we may say is that a court of equity regards purchaser as owner, and vendor as creditor for the purchase money, holding the legal title for his security. Some courts have put it in this way. The prevailing mode of expression arose from the analogy of a covenant in a settlement to lay out certain trust moneys in land. In such case the moneys were treated as already land. Story, in discussing the effect of a contract for the sale of land,87 cites Fonblanque,88 and the latter is speaking not of vendor and purchaser but of covenants in a settlement.

86

90

When we speak of conversion we are not describing a condition of the property for all purposes with respect to everybody but are giving a name to a situation resulting from the application of equitable doctrines to a state of facts between certain parties. This is well illustrated by a recent litigation extending over two states. In Re Loyd's Estate 89 and Norris v. Loyd,90 a testator domiciled in California had property in California and lands in Iowa. He directed his executors to sell the Iowa lands and divide the proceeds among his twelve children. In a litigation in California, to which the widow and the twelve children were parties, one H had established that he was a duly acknowledged illegitimate child of the testator, and that as such, under the law of California, although not mentioned in the will, he was entitled to take two thirty-ninths of the whole estate "wherever situated." Under the laws of Iowa, on the other hand, there being a valid will, H was excluded by the gift to the twelve legitimate children. The widow and legitimate children agreed to hold the Iowa land as land and so notified the

85 New York R. Co. v. Cottle, 187 App. Div. 131, 175 N. Y. Supp. 178 (1919); Neponsit Realty Co. v. Judge, 106 Misc. 445, 176 N. Y. Supp. 133 (1919); Johnson v. Merritt, 99 S. E. (Va.) 785, 788 (1919) (a contest as to priority of a statutory judgment lien); Maudru v. Humphreys, 98 S. E. (W. Va.) 259 (1919).

86 Longwell v. Bentley, 23 Pa. St. 99, 102 (1854); Bender v. Luckenbach, 162 Pa. St. 18, 22, 29 Atl. 295 (1894).

87

I STORY, EQUITY JURISPRUDENCE, § 790.

88 EQUITY, Book 1, chap. 6, § 9.

89 175 Cal. 699, 167 Pac. 157 (1917).

90 183 Ia. 1056, 168 N. W. 557 (1918).

executors, who then refused to sell. In California the Superior Court ordered the executors to sell the land and removed them for disobedience of the order. These orders were reversed by the Supreme Court. In Iowa, H intervened in a partition suit between the twelve legitimate children and the widow. It was held that he had no claim. His proposition was that the provision for sale and division of the proceeds made the Iowa land personalty for all purposes and as to everybody and as such brought it within the operation of California law, and that no reconversion could be made thereafter by agreement of the widow and the devisees in prejudice of his rights unless he was a party thereto. This contention was properly rejected by both courts. As between the devisees, as between them and the widow, as between their heirs and their executors, if one of them had died after testator's death, and as between them and persons claiming against or under them thereafter, the land was to be held personalty and any one who acquired an interest on this basis would have been a necessary party to any reconversion. But H did not claim under them, nor had he acquired any interest or any claim against them after testator's death. His claim was prior to, not under or depending on, the will, and by the law of Iowa, where the land lay, the will operated to cut it off.

Another illustration that conversion is a name given to results reached on other grounds, not a fact from which we may reason for all purposes and with respect to the rights of all parties, is afforded by Kneisley v. Kneisley.91 Testator directed all his estate, both real and personal, to be sold, one third of the proceeds to be paid to his wife and the rest to certain named beneficiaries. The widow elected not to take under the will. It was held that the crops on the land between testator's death and the sale of the lands that remained to be sold under the will went to the heirs, who took the freehold beneficially pending the sale. As between those claiming under or through the beneficiaries, the whole blended fund was personalty. But the beneficiaries were only to take the proceeds after sale. Down to the sale they had no interest in the lands. Their claim was against the executors who were given a power to sell the land. Accordingly no one was in a position to claim against the heirs who took the legal title subject to having it divested by

91 107 Atl. (Md.) 195 (1919).

the executors exercising their power of sale and dividing the proceeds among the beneficiaries. There is an analogous situation where vendor marries after the contract to sell land, breaks the contract in some material respect, and dies. If purchaser then elects to sue at law for the breach, vendor's widow will have dower.92 If in such a case we talk about conversion and reconversion, we may well find difficulty in determining whether reconversion should date from the making of the contract or from the breach or from the election to sue for damages. But if we ask, as between vendor's widow, his heir and his executor, what he left, we see that he left legal title to the land, subject to the power of purchaser to assert legal ownership if he chose, but he left no chose in action against purchaser to go to his executor, since at his death he could not sue purchaser and the latter was not in equity debtor for the purchase money. The widow acquired dower at law and there was no one in a position to make her hold it in equity for his benefit.

Foreclosure by the vendor was involved in Hawkins v. Rodgers.93 In that case, purchaser had made improvements. It was held that he could have strict foreclosure only on condition of paying for the improvements. Otherwise the foreclosure must be by sale. The Supreme Court of Wisconsin has held that strict foreclosure is the only proper decree.94 This holding is based on the palpably fallacious argument that "the title did not pass by the contract, but remained in the vendor;" as if the title to mortgaged land were not

2 See Day v. Solomon, 40 Ga. 32 (1869). Compare the situation in Hopkinson v. Dumas, 42 N. H. 296 (1861).

93 91 Ore. 483, 179 Pac. 563 (1919).

94 Button v. Schroyer, 5 Wis. 598 (1856); Nelson v. Jacobs, 99 Wis. 547, 555, 75 N. W. 406 (1898), citing many decisions of that court to the same effect. See also Todd v. Simonton, 1 Colo. 54 (1867). The great weight of authority in the United States is contra: Haley v. Bennett, 5 Port. (Ala.) 452 (1837), and later cases in Alabama; Lewis v. Boskins, 27 Ark. 61 (1871), and later cases in that state; Sparks v. Hess, 15 Cal. 186 (1860); Pleasants v. Fay, 13 App. D. C. 237 (1898); Andrews v. Sullivan, 7 Ill. 327 (1845), and later cases in Illinois; Lagow v. Badollet, 1 Blackf. (Ind.) 416 (1826), and later cases in Indiana; Abbott v. Moldestad, 74 Minn. 293, 77 N. W. 227 (1898); Walker v. Casgrain, 101 Mich. 604, 60 N. W. 291 (1894), and later cases in Michigan; Gaston v. White, 46 Mo. 486 (1870), and later cases in Missouri; Gardels v. Kloke, 36 Neb. 493, 54 N. W. 834 (1893); Champion v. Brown, 6 Johns. Ch. (N. Y.) 398 (1822); Clark v. Hall, 7 Paige (N. Y.), 382 (1839); Vance v. Blakely, 62 Ore. 326, 123 Pac. 390 (1912); Whitmire v. Boyd, 53 S. C. 315, 349, 31 S. E. 306 (1898); Brace v. Doble, 3 S. D. 110, 52 N. W. 586 (1892); Wade v. Greenwood, 2 Rob. (Va.) 474 (1843), and later cases in that state.

in the mortgagee, 95 and as if in each case vendor or mortgagee, being parties to the suit, could not be compelled to convey to the purchaser at the sale under the decree of foreclosure by sale. Strict foreclosure should only be permitted where no substantial payment has been made,96 or where the present value of the land is less than the amount due vendor,97 or where, as in the present case, purchaser having made improvements under the contract, vendor elects to pay for them.98

II. CONSIDERATION

If equity gives an extraordinary complementary remedy upon contracts where the legal remedy is inadequate to secure the legal right, we should expect a court of equity to limit its inquiry to the adequacy of the common-law remedy, the advisability of exercise of the chancellor's jurisdiction, if he finds he has jurisdiction, and the most just and effective mode of applying equitable remedies under the circumstances. Yet equity has not stopped there but has established a doctrine that the chancellor will not aid a volunteer although he claims under a sealed instrument, enforceable at

95 The court was perhaps influenced by the statute in Wisconsin whereby mortgagor has the legal title and mortgagee a lien only (1 POMEROY, EQUITY JURISPRUDENCE, § 163, note 1) and overlooked the common-law situation to which equity applied foreclosure by sale.

96 Strict foreclosure was held improper where part payment had been made, in Andrews v. Sullivan, 7 Ill. 327 (1845) ($400 paid out of $990); Vail v. Drexel, 9 Ill. App. 439 (1881); Fitzhugh v. Maxwell, 34 Mich. 138 (1876) (one-fourth paid); Bank v. Thornburg, 54 Neb. 782, 75 N. W. 45 (1898) (ten per cent paid). It was held proper where no payment had been made, in Morgan v. Dalrymple, 59 N. J. Eq. 22, 46 Atl. 664 (1899); State v. Sheridan, Clark Ch. (N. Y.) 533 (1841). It was allowed in Fairchild v. Mullan, 90 Cal. 190, 27 Pac. 201 (1891) (one-fourth paid but form of decree not objected to); Southern R. Co. v. Allen, 112 Cal. 255, 44 Pac. 796 (1896) (one-fifth paid, but court divided); Denton v. Scully, 26 Minn. 325, 4 N. W. 41 (1879) ($2,000 paid out of $5,800, but decided on demurrer to bill for strict foreclosure and general relief, and the court said the decree should direct a sale if that were more equitable). In Bank v. Brander, 124 Cal. 255, 56 Pac. 1109 (1899), $3,500 had been paid out of $50,000. Here a strict foreclosure probably did not operate inequitably under the circumstances. The Supreme Court of Oregon holds that foreclosure by sale is the rule and "strict foreclosure the exception." Flanagan v. Land Co., 45 Ore. 335, 77 Pac. 485 (1904); Vance v. Blakely, 62 Ore. 326, 123 Pac. 390 (1912). It allowed strict foreclosure in Trust Co. v. Mackenzie, 33 Ore. 209, 52 Pac. 1046 (1898), and Vance ». Blakely, supra, where on consideration of all the circumstances it appeared more equitable.

97 Vance v. Blakely, supra.

"Lytle v. Scottish American Mortgage Co., 122 Ga. 458, 50 S. E. 402 (1905).