Case Name: Horace Anderson, as Trustee, etc., of Ramon Martinez Hernandez, Respondent, v. Isabell M. Blood and Another, Appellants, Impleaded with Others
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1895-04
Citations: 93 N.Y. Sup. Ct. 244
Docket Number: 
Parties: Horace Anderson, as Trustee, etc., of Ramon Martinez Hernandez, Respondent, v. Isabell M. Blood and Another, Appellants, Impleaded with Others.
Judges: 
Reporter: Supreme Court Reports (Hun)
Volume: 93
Pages: 244–257

Head Matter:
Horace Anderson, as Trustee, etc., of Ramon Martinez Hernandez, Respondent, v. Isabell M. Blood and Another, Appellants, Impleaded with Others.
Inadequacy of consideration■ — impeachment of the title to real estate therefor —judicial notice that the pur chasm’s purpose is to resell at an advance — want of time to consider suspicious circumstances.
Where the plaintiff in an action seeks to impeach the sale of real estate on the ground of inadequacy of consideration, he is hound to establish the inadequacy of the consideration by at least credible testimony, and not by prevaricating witnesses. Interests of purchasers of real estate cannot be taken away from them by evidence of uncertain character.
Quiere, whether, in an action brought to set aside conveyances as fraudulent and void, the defense of inadequacy of consideration can be made available.
The court will take judicial notice that it is not an uncommon occurrence for a party to make a contract for the purchase of real estate, for the purpose of' reselling the same at a profit before he is obliged to complete his contract, and such a circumstance does not invalidate the sale of the real estate to him.
The case distinguished where suspicious circumstances are brought to the attention of a purchaser only at the moment of closing a purchase of real estate, from one in which the purchaser has had an opportunity to ponder and deliberately consider them.
Parker J., dissenting.
Appeal oy the defendants, Isabell M. Blood and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 6th day of June, 1894, upon the decision of the court rendered after a trial at the New York Special Term setting aside deeds of certain premises, adjudicating as to the interests of the parties therein and directing an accounting.
The facts in this case appear in the opinion of Parker, J.
E. Ellery Anderson and John E. Parsons, for the appellants.
Harold Swain, Francis L. Wellmcm and Alfred G. Reeves, for the respondent.

Opinion:
Yan Brunt, P. J.:
I cannot concur in the conclusion arrived at by Mr. Justice Parker in this case. Conceding the law to be as stated by him, that actual notice to Mrs. Blood or her agents was not necessary,' but only the existence of such facts as would put them upon inquiry, it does not seem to me that such inquiry would have developed such a condition of affairs as would impeach her title.
It seems to me that the learned judge below arrived at the conclusion reached by him by considering the property to be of a value which is not established by the testimony, and by holding Mrs. Blood responsible for knowledge which might possibly have been acquired by a person not her agent. It is expressly stated by the learned justice that Mr. Waddell, who examined the title of this property upon a loan by his client thereon, was the attorney and agent of Mrs. Blood. An examination of the record shows that Mr. Waddell held no such relation to Mrs. Blood. He did not examine the title for her. It is true that she paid him his expenses and commissions on the examination of that title. But in such examination he was representing his client, the mortgagee, who pro posed to loan the money upon the property, and not Mrs. Blood ; and he did not become her agent by reason of the fact that she was satisfied to take the property without any further examination by a lawyer employed by herself.
It further appeal's that the learned trial justice found the value of this property at the time of this purchase by Mrs. Blood to have been the sum of $45,000; and that was considered a suspicious circumstance in that it was bought below the market price, and should have induced inquiry and excited suspicion. 1 have examined the record in vain to find any proof of any such value. It is true that a witness by the name of Yeoman swore this property to be of- the value of $52,500. But it is evident that this witness was perfectly willing to fulfill his contract of swearing to -the value of this property with or without any information on the subject, and with or without any foundation for his opinion. He shows upon his cross-examination that ho was ignorant of any transaction in respect to property in that neighborhood. He then testified that he made up his mind in regard to the value of the property because of his knowledge of the rental of the property and the taxes which were paid thereon — not the taxes which were paid in 1887 and 1888, but the taxes which were paid at the time at which he was testifying. He testifies that he was told that this property was rented for $4,000 or $4,500, and that the taxes at the present time were about .$500, and that it was upon this basis that he made up his valuation. But when he ascertains that'the rental of $4,000 or $4,500 was of a furnished house and not of a house unfurnished, he is entirely equal to the occasion. He says: " I was not governed by that (the rental value) at all. I made my valuation independent of that — not governed by anything that he said " in regard to the rent — exactly contrary to that which he had previously testified. And this witness, prevaricating as he evidently did, is considered to have established a foundation of value of this property, not of $52,500, but of $45,000 — a sort of half-way house between his estimate and that of a witness examined on the part of the defendant who had great experience in the sales of real estate as an auctioneer and real estate agent, and he testified that its value was $37,500, and that he had sold property equally good for that price.
If this plaintiff was seeking to impeach this sale on the ground of inadequacy of consideration, lie was bound to establish it by at least creditable testimony and ' not by prevaricating witnesses. Interests of purchasers of real estate cannot be taken away from them by evidence of such a character. It may be that inadequacy of consideration cannot be made available in an action of this character. (Truesdell v. Sarles, 104 N. Y. 164.)
But it must be borne in mind that the title of Mrs. Blood in respect to this real property cannot be impeached'unless the evidence requires the finding of an unlawful combination between the former trustee and Melliado in respect to this sale. It is not enough that the trustee has acted improvidently or has made a sale when the property was not in such condition that it would not bring its largest price because of leases thereon. But it must be found that there was an understanding, a fraudulent scheme between the trustee and the purchasers at the auction sale that it should be bid in for their benefit.
I have searched the record in vain for any evidence of any such scheme or understanding. The only possible particle of evidence is that the premises were struck off at the auction sale for $32,500, and were subsequently sold by the purchasers for $40,000. It is in evidence that the auction sale was fairly conducted. Publicity was given to the sale because it is in evidence that parties who had their eye on this property were present, evidently desirous of acquiring it, but not yet exactly ready to purchase. In fact the representative of the very purchasers whose contract to purchase with Mrs. Blood has brought about this litigation, was present at the sale and says that it was fairly conducted, that there was no secrecy, nothing in the world about it to excite suspicion, and the property was struck off in the usual way.
But it is said by the learned judge in the court below, that it is evident that the purchaser's at the auction sale never intended to take the title and that they never did until they got a purchaser.. As it has been held by the Court of Appeals, in Frace v. N. Y., L. E. & W. R. R. Co. (143 N. Y. 182), that we may take judicial notice, of the fact that certain spark arresters are in common use upon engines or locomotives, I think the court may also take judicial notice that it is not an uncommon occurrence by any means for a. party to make a contract for the purchase of real estate, expecting; to resell tbe same at a profit, before lie is compelled to complete under liis contract. If such a circumstance is to invalidate transactions in real estate by means of suits brought years thereafter, there will not be much security in dealing in real estate in the city of New York.
The evidence shows that a reputable and careful attorney (Mr. Waddell) in the examination of this title saw nothing suspicious in regard to the circumstances attending it to call for special inquiry; and it should take no slight evidence to impeach the title of a purchaser who has paid a fair consideration for the property bought.
There is another feature in this case which seems to have been lost sight of. These suspicious circumstances, if any existed, in reference to this title, came to the knowledge of the agent of Mrs. Blood, if at all, at the moment of closing the title. They had no time to think about them, to cogitate over them, to come to conclusions after deliberation, and to study out the various suspicious points by means of which it is now sought to invalidate the title they then procured. They were first revealed then and there, and neither Mrs. Blood or her agents had any time to ponder over these things, and weigh them and determine as to whether they may have been suspicious or not. And yet the mental processes of these people are judged by what we say they should have been, we having had the opportunity to deliberate and ponder over the transaction. The very statement of the learned trial judge shows conclusively that the plaintiff was not entitled to a judgment. He, sitting as a judge, says at the end of the plaintiff's case: " It seems to me now that there is hardly proof enough here to show that this woman had reason to believe that there was any fraud going on against the oestuis quo trust." Why should he expect these purchasers in the haste of closing the title to have come to the conclusion that such fraud existed ? Hearing the evidence, having his attention called to the fact that fraud was claimed, yet he is not so impressed by the evidence but that he states that he does not think that there is any proof showing that Mrs. Blood had any reason to believe that there was any fraud going on against the oestuis que trust. There was nothing developed on the defendants' ease which strengthened the proof upon the part of the plaintiff; and it is only upon reflection and turning over and considering the facts that the judge comes to the conclusion that there was sufficient to put the purchaser upon inquiry. When did the purchaser have any time before closing this purchase to turn this over, to consider it, to place this and that fact together, and to form, a conclusion ?
It seems to me also that Mr. Justice Parker is in error in holding that because of the stipulation contained in the case, the question as to whether the conveyance by Mrs. Blood to Mrs. Koss, her daughter, on her approaching marriage, was for a good consideration, was eliminated from the case. The learned judge below found that the consideration for said conveyance was the consideration of blood relationship, and the approaching marriage of her said daughter to Charles E. Koss. The stipulation did not impeach this statement contained in the deed. The learned trial judge in making his findings did not so think. All that the stipulation amounted to was that Mrs. Koss did not pay any money for the property. It in no way affected the question presented as to a marriage settlement. But it is not necessary to discuss this proposition, because the plaintiff entirely failed to make out a case. Indeed, the whole ground of this action rests upon the fact that a purchaser desirous of procuring this property for a particular purpose, was willing to pay an exorbitant price for the same, beyond all question far above its ordinary value. I do not think that this should justify the impeaching of this title years after it has been taken.
The judgment should be reversed and a new trial granted, with •costs to the appellants to abide the event.
O'Brien, J. :
While in the proper action the evidence might justify a recovery against the trustee or the purchaser at the auction sale for the profits realized upon the sale to Mrs. Blood, it is insufficient to warrant the conclusions that Mrs. Blood was not a purchaser in good faith, for value, or that the title of Mrs. Koss, her daughter, was invalid as against the beneficiaries.
I, therefore, concur with the presiding justice for a reversal of the judgment.