The concept of disentitling conduct in equity priority disputes is not confined to conduct leading to the creation or acquisition of a later equitable interest; it extends to conduct contributing to a failure by the holder of a later interest to protect its existing contractual rights at an earlier time. Where a party obtains priority through disentitling conduct, the court may impose conditions requiring that party to 'do equity' vis-à-vis the prior interest holder. A call option granted over land before the grantor acquires legal title does not create an equitable interest in the optionee until the grantor completes the purchase. Whether the penalties doctrine requires adjustment in its timing of assessment when the impugned stipulation involves transfer of property rather than money remains an open question.
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