## Facts

- Albert L. Hadley executed a will specifically devising his residence at 504 Pequot Avenue, Southport, Connecticut, to Southport Congregational Church–United Church of Christ (the church).
- Hadley later signed a contract to sell the same property to Evelyn Winn using a standard-form agreement containing a mortgage contingency clause.
- The mortgage contingency required the buyer to seek a written mortgage commitment; if the buyer timely gave notice that financing was not obtained, the contract would become null and void, but if the buyer did not give notice within the stated period, the contract would remain in full force and effect.
- Hadley made a charitable pledge to Cheekwood Botanical Garden and Museum of Art (Cheekwood) to donate the sale proceeds from the property.
- Hadley died before the mortgage contingency period expired; the buyer had neither terminated the contract nor provided notice of inability to obtain financing at the time of death.
- Coexecutors sought authorization to proceed with the sale; the church objected, arguing the mortgage contingency prevented equitable conversion and preserved the specific devise of the real estate.
- Cheekwood intervened, asserting that equitable conversion had transformed the estate’s interest into personal property (the right to sale proceeds), supporting Cheekwood’s claim to those proceeds.

## Issues

1. Whether a real estate sales contract triggers equitable conversion at execution when the seller dies before a mortgage contingency clause is fulfilled or expires.
2. Whether a mortgage contingency clause that permits only the buyer to terminate within a limited time renders the contract unenforceable until financing is obtained.
3. Whether the specific devise of the real property to the church is defeated because the seller’s interest is converted into a right to the purchase money.

## Decision

- The Supreme Court held that equitable conversion applied at the time the contract was executed.
- The mortgage contingency clause was construed as a condition subsequent (a limited buyer-only option to terminate), not a condition precedent to contract enforceability.
- Because the contract was specifically enforceable against the seller upon signing, equitable title passed to the buyer at execution, and the seller’s interest became a personal property interest in the purchase money.
- The court reversed in part the Appellate Court and directed that the trial court’s judgment applying equitable conversion be affirmed.

## Legal Principles

- Equitable conversion applies when a land sale contract is specifically enforceable: equity treats the buyer as the equitable owner of the land and the seller as the equitable owner of the purchase money.
- A mortgage contingency clause that allows only the buyer to terminate within a stated period if financing is not obtained may operate as a condition subsequent, leaving the contract binding and enforceable at execution unless and until the buyer exercises the termination right.
- When equitable conversion occurs before the seller’s death, a specific devise of the real property is effectively displaced to the extent the estate’s interest has become a right to sale proceeds rather than title to the land.

## Conclusion

The court held that a buyer-only mortgage contingency did not prevent equitable conversion at contract execution; the seller’s death before the contingency period ended left the estate with an interest in the purchase money rather than the real property, defeating the specific devise of the land.


Southport Congregational Church-United Church of Christ v. Hadley, 320 Conn. 103, 128 A.3d 478 (Conn. 2016)