money or land, but not in such a sense as to make the covenant a first step towards such transfer; for the transfer which a performance of the covenant causes is to a stranger to the covenant, and it may, therefore, in respect to the effect produced by the covenant and by its performance, be regarded as a mere accident; for the reader must remember that the covenant is not to buy land of the covenantee, nor to sell land to him, but is to buy land of, or to sell land to, some third person not a party to the covenant, nor ascertained by it. It is true that the performance of the covenant will involve the purchase or sale of land, and so will practically involve, not only the making, but the mutual performance, of a bilateral contract for the purchase or sale of land, but the only effect of such purchase or sale upon the covenantor will be to make him the owner of the land instead of the money, or of the money instead of the land, and thus to place him in a situation to settle the land or the money, just as if he had purchased or sold the land before he made the covenant, in which case the covenant would of course be only to settle the land purchased, or the proceeds of the land sold. It will be seen, therefore, that, in the case of a unilateral covenant to purchase and settle land, or to sell land and settle the proceeds of the sale, while it is the purchase or sale of the land which causes the conversion, it is the settlement of the land or money which causes the transfer or alienation without which the covenant cannot create an equitable conversion. In order, therefore, that a unilateral covenant to buy or sell land may cause an equitable conversion, it must be a covenant to buy land of the covenantee, or to sell land to him, or there must be added, to the covenant to buy or sell land, a covenant to make a gift of some portion of the land to be purchased, or some interest therein, or of some portion of the proceeds of the land to be sold, or of some interest therein. The only instance of the latter that occurs to me is the covenant, already referred to, to lay out money in the purchase of land and to settle the land, or to sell land and settle the proceeds of the sale; and the only instance of the former that occurs to me is the unilateral contract to sell land which is commonly known as the giving of an option.1 Such a contract is a unilateral agreement to sell land at the price, and on the terms, stated in the contract, without any agreement by the other party to the contract to purchase the land. The payment of the price,

1 18 HARV. L. REV. 10 et seq.

therefore, is merely a condition of the latter's right to have the land. Still, such a contract would seem, in theory, to cause an equitable conversion in favor of the holder of the option, but, in the case of the latter's death, the only right that would devolve upon any one would be the conditional right to have the land on paying the price, and whether that right would devolve in equity upon the heir or the personal representative of the deceased is at least doubtful, and I am not aware that there is any authority on the point.

2. The other statement contained in the passage quoted above is that a contract for the purchase and sale of land furnishes the only instance of an equitable conversion which is always coextensive with the actual conversion agreed or directed to be made. Why is the equitable conversion caused by such a contract always coextensive with the actual conversion which the performance of the contract involves? Because the reason why such a contract causes an equitable conversion, or rather two equitable conversions, is that its performance involves two alienations as well as two actual conversions, and these two alienations and two actual conversions are made by the same two acts, one performed by each of the two parties to the contract, namely, a delivery of a deed of conveyance of the land by the seller to the buyer, and a delivery of the price of the land by the buyer to the seller. Plainly, therefore, the thing which the seller converts into money is the same as the thing which he alienates to the buyer, and the thing which the buyer converts into land is the same as the thing which he alienates to the seller. It may be added that these two acts regularly take effect at the same instant of time, and hence the two alienations and the two actual conversions are regularly made at the same instant of time.

Why is it that no other equitable conversion is necessarily coextensive with the actual conversion required to be made by the covenant or direction which causes the equitable conversion? Because, in every other case, the actual conversion of land into money, or of money into land, must be made before any gift of the money or land into which the conversion is made can take effect; and, as it is the latter alone that causes the equitable conversion, it necessarily follows that the extent of the equitable conversion is measured by the extent of such gift and not by the extent of the actual conversion.

It is proper, however, to mention another species of agreement

which has been held to cause an equitable conversion of land into money, namely, the agreement which is sometimes made by each of several co-owners of land with the other co-owners to join the latter in making a sale of the land. If it is true that such an agreement converts the land into money in equity, it seems to be another instance of a contract which converts land into money without any gift of the money into which the land is to be converted, and it seems also that the equitable conversion which it causes will always be coextensive with the actual conversion which is contracted to be made. It is clear, however, that such an agreement does not cause any equitable conversion whatever. To suppose that it does is to confound an agreement by each of several co-owners of land with all the others to join the latter in selling the land to some person not yet ascertained, to confound such an agreement with an agreement by all such co-owners to sell the land to some ascertained person; and even the latter agreement will not cause an equitable conversion of the land into money without an agreement by the other party to the contract to purchase the land. Without the latter, the agreement will merely give an option to purchase the land, and its utmost effect, in the way of causing an equitable conversion, will be to convert the money of the person receiving the option into land in equity. The only way in which one can convert his own land into money in equity in his own favor is by procuring some one else to contract with him to purchase the land. Even in the case of a bilateral contract for the purchase and sale of land, it is, as we have seen, the purchaser's side of the contract that converts the seller's land into money in equity, while it is the seller's side of the contract that converts the purchaser's money into land in equity. It is a mistake, moreover, to suppose that the agreement in question is a contract to sell the land. If it were, the next step would be to convey the land, whereas, in fact, the next step is a bilateral contract between all the co-owners of the land and an ascertained purchaser for the purchase and sale of the land; and, of course, it is this contract that causes an equitable conversion of the land into money. It may be added that it is by no means an easy task so to frame an agreement, like that in question, that it can be enforced in a court of law, and it is believed that no in

1 Hardey v. Hawkshaw, 12 Beav. 552; In re Stokes, 62 L. T. 176; Darby v. Darby, 3 Dr. 495.

telligent person will seriously contend that such an agreement can be specifically enforced in equity.

In a former article, I have considered several important distinctions, having no direct connection with equitable conversion, between a direction to sell land accompanied by a gift of the proceeds of the sale, or of some part thereof, or of some interest therein, and the creation of a lien or charge on the same land, either with or without a direction to sell the land to satisfy the lien or charge. There is, however, another important and radical distinction between these two things which has exclusive relation to the creation of an equitable conversion, so radical indeed that, while the former always causes an equitable conversion, the latter never does. This being so, it is indispensable that the two things be accurately distinguished from each other. Fortunately, too, it is possible to distinguish them with entire accuracy, though they seldom, if ever, have been so distinguished. How, then, is the distinction to be made? 1. A gift out of the proceeds of a sale of land, though it may be of either a limited or an absolute interest, must always extend either to the entire proceeds of the sale, or to some fractional part thereof, and hence such a gift always makes a sale of all the land necessary, as it is only by a sale of all the land that the amount of money to which the gift will extend can be ascertained. 2. Where land is charged with the payment of money the amount of money which constitutes the charge bears no relation to the value of the land or to the price for which it will sell, and hence a sale of the land can never be necessary to ascertain the amount of the charge, nor will a sale of the land even aid in ascertaining its amount. How, then, shall the amount of the charge be ascertained? He who makes the charge must at his peril fix its amount or furnish the means of fixing it. For example, if the charge consists of a sum of money given, by the deed or will which creates the charge, to a person named, the usual and proper mode of fixing the amount of the charge is by naming the amount of the gift in lawful money. If the charge be made by will, and consist of all the testator's pecuniary legacies, the amount of the charge will be ascertained by adding together all the pecuniary legacies contained in the will and in the codicils thereto, if any. If the charge be created by a will, or by a deed of assignment, and consist of all the tes

1 18 HARV. L. REV. 83 et seq.

tator's or assignor's debts, the amount of the charge will be ascertained by adding together such debts as the testator or assignor shall be proved to have owed when he died, or when he made the deed of assignment. Or, instead of charging "all his debts" he may of course charge only such debts as he shall specify in the will or deed, and, in that case, the will or deed will be conclusive both as to the number of debts and as to the amount of each.

Why does a lien or charge on land never cause an equitable conversion of the land into money? 1. Because it never constitutes any step towards the alienation of the land. When a sale of land is directed, and a gift is at the same time made out of the proceeds of the sale, to A, for example, and the land is afterwards sold pursuant to the direction, an immediate consequence of the sale is that the proceeds, to the extent of the gift, become the property of A, at least in equity, and that is of course, by virtue of the previous gift to him, which, however, remains executory till the sale is made. On the other hand, when land is merely charged with the payment of money to A, for example, and the land is afterwards sold, whether for the purpose of satisfying the charge or not, the ownership of the proceeds of the sale will be just where it would have been if the charge had not been made, and no part of such proceeds will be the property of A,— whose right against such proceeds will be precisely the same as his right against the land before it was sold, i. e., he will have a lien or charge on such proceeds for the sum of money coming to him. 2. If a charge of land with a payment of a debt causes an equitable conversion of the land to the extent of the debt, it must be because of the direction to sell the land1 which is supposed to accompany the charge; and yet such a direction is wholly unnecessary, the charge being complete without it. A direction, indeed, to sell land, and apply the proceeds of the sale to the payment of a certain debt, will of itself constitute a charge of the debt upon the land, but it is only as evidence of an intention to make a charge that such a direction is material. Besides, when an owner of land charges the same with the payment of a debt, his power over the land is, to the extent of the charge, entirely suspended, and will remain suspended till the charge is removed, and, therefore, the addition of a direction to sell the land is, for

1 For it is only by an agreement or direction to sell, that land can be converted indirectly into money. Hyett v. Mekin, 25 Ch. D. 735. And see 19 HARV. L. REV. 25, proposition 9.