Owen, the owner of Greenacre, a tract of land, mortgaged Greenacre to ABC Bank to secure his preexisting obligation to ABC Bank. The mortgage was promptly and properly recorded. Owen and Newton then entered into a valid written contract for the purchase and sale of Greenacre, which provided for the transfer of "a marketable title, free of encumbrances." The contract did not expressly refer to the mortgage. Shortly after entering into the contract, Newton found another property that much better suited her needs and decided to try to avoid her contract with Owen. When Newton discovered the existence of the mortgage, she asserted that the title was encumbered and that she would not close. Owen responded by offering to provide for payment and discharge of the mortgage at the closing from the proceeds of the closing. Newton refused to go forward, and Owen brought an appropriate action against her for specific performance. If the court holds for Owen in this action, it will most likely be because 
the mortgage is not entitled to priority because it was granted for preexisting obligations. the doctrine of equitable conversion supports the result. Owen's arrangements for the payment of the mortgage fully satisfied Owen's obligation to deliver marketable title. the existence of the mortgage was not Newton's real reason for refusing to close.