Case Name: Bingham v. Hyland
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1889-06-21
Citations: 6 N.Y.S. 75
Docket Number: 
Parties: Bingham v. Hyland.
Judges: 
Reporter: West's New York Supplement
Volume: 6
Pages: 75–79

Head Matter:
Bingham v. Hyland.
(Supreme Court, General Term, Fifth Department.
June 21, 1889.)
1. Bona Fide Purchaser—Consideration.
One who takes a deed to land as security for a pre-existing indebtedness, and for no other consideration, is not a purchaser for a valuable consideration, within the' meaning of the recording act of New York.
2. Appeal—Review—Weight op Evidence.
One of the grantors in an alleged lost and unrecorded deed to a bank testified to the execution and delivery of the deed, and there was uncontradicted evidence of his declarations while in possession of the property, and before a subsequent deed to defendant, that the title to the property was in the bank. Held, that a finding that the deed was executed and delivered would not be disturbed on appeal.
.3. Evidence—Declarations against Interest.
Reports to the comptroller of the currency and published statements, including the property as assets of the bank, attested by the alleged grantors as officers of the bank, and declarations by one of them as president of the bank to the bank examiner that the deed had been executed, made before the deed to defendant, and while the bank was occupying the property, are admissible in evidence, as declarations against interest while in possession of the property, as against the.grantors and all claiming under them.
Appeal from special term.
Argued before Barker, P. J., and Dwight, J.
J". A. Vanderlip, for appellant. J. JST. Beekley, for respondent.

Opinion:
Dwight, J.
The action was in equity to establish title to certain real estate in the plaintiff, as receiver of the First National Bank of Dansville, under an alleged lost and unrecorded deed from James and Samuel D. Faulkner to the bank, and to have a subsequent recorded deed from James Faulkner, of his interest in the same real estate, to the defendant, Hyland, and the record thereof, declared null, void, and of no effect as against the bank and the receiver. Title in the alleged grantors of the bank, at the date of their supposed deed, was admitted; also, in effect, that, but for the alleged deed to the bank, title to an undivided six-tenths of the real estate was in James Faulkner at the date of ids deed to Hyland. It was also conceded, as Hyland himself testifies, that " when this deed was delivered me I gave Mr. Faulkner no money, nor any obligation of any kind, nor agreement to pay money, nor surrendered any obligation to him. It was simply a voluntary act on his part to secure me for a pre-existing debt." These admissions, we suppose, limited the material inquiry in this case to the single question whether the alleged prior unrecorded deed was in fact executed and delivered by the supposed grantors to the bank. If so, the subsequent deed by one of the same grantors to the defendant could be of no effect, except by virtue of the recording act; .and, under the admission of the defendant's evidence quoted above, his deed was not within the benefit of that statute, because, though he were "a purchaser in good faith, "—that is, without notice of the prior unrecorded deed,— he was not "a purchaser for a valuable consideration." Proof of that fact •could hardly be more explicit or conclusive than that made by the evidence given by Hyland himself. His whole narrative of the antecedent and immediate circumstances of the transaction fully bears out the statement in which he sums up the character of the transaction itself, in the words, "It was simply a voluntary; act on his [Faulkner's] part to secure me for a pre-existing debt. " One who takes a conveyance, either in payment of or as security for a preexisting debt, is not a purchaser for a valuable consideration, within the meaning of the recording act. Weaver v. Barden, 49 N. Y. 286; Cary v. White, 52 N. Y. 138; Webster v. Van Steenbergh, 46 Barb. 211; Westbrook v. Gleason, 79 N. Y. 23, 28; Yowng v. Guy, 87 N. Y. 457, 462. To be such, he must part with value on the faith of the purchase. He must pay the purchase money or some part of it, or give security for its payment, or deliver something of value in consideration of the conveyance; or, if the transaction is by way of payment or security for a pre-existing indebtedness, he must surrender other securities which he holds for the same, or by express agreement extend the time of payment. The rule in this respect, under the recording act, is the •same as under the law-me'rchant in respect to the transfer of negotiable paper. Weaver v. Barden, supra. The transferee of such paper takes it discharged of equities in favor of the maker only when he takes it in good faith and for value; that is, without notice of such equities, and upon the present payment or rendering of a valuable consideration. See Weaver v. Barden, supra, 293-295, and the cases cited. We should not have thought it necessary ta dwell or cite authorities upon the question of the nature of the consideration necessary to bring a subsequent purchaser within the benefit of the recording act, but that the learned counsel for the appellant seemed to be laboring under the impression that the rule was otherwise than as shown by the authorities cited. Under the rule as stated it was not necessary for the plaintiff to show that the defendant had notice of the prior unrecorded deed.
The question whether the alleged deed was, in fact, executed and delivered was an issue of fact of which the affirmative was supported by the direct testimony of James Faulkner, one of the alleged grantors, the other being dead. Evidence was also received, under the objection of the defendant, of oral and written declarations of James Faulkner before his deed to Hyland, and when (if the deed to the bank had not already been executed and delivered) he was m possession of the property as owner, to the effect that title to the property was in the bank. All this evidence was substantially uncontradicted. The court is asked to hold that it did not constitute a fair preponderance of the competent and credible evidence in the case, on the ground that James Faulkner's testimony was unworthy of credit, and that his declarations were inadmissible against the defendant, Hyland. On the question of credit, attention is called to the motive of Faulkner to testify falsely,to the character of his testimony, and to his manner in testifying. All these were proper considerations to urge upon the attention of the trial court; and, if the case were one of closely-balanced evidence, might possibly justify the court of review in setting aside the finding of fact; but in this case, as has been said, the evidence in question is substantially uncontradicted, and the considerations urged against its credibility could be more thoroughly appreciated by the court which saw the witness and heard his testimony than by us, who see and hear him only through the imperfect medium of the printed page. The court below gave credit to his testimony, and the case is not one in which we feel justified in coming to an opposite conclusion.
The property in question was the building and lot in Dansville, occupied by the bank from its organization. It was the property of the two brothers, James and Samuel D. Faulkner, to whom the bank paid rent before the date of the alleged conveyance in or before 1876, after which time, as James testifies, the bank received the rent from the other tenants of the building. James Faulkner was cashier of the bank; his father, James, Sr., was president; and his brother, Samuel D., one of the directors. In 1876, the report of the cashier to the comptroller of the currency, attested by James Faulkner, Sr., and Samuel D. Faulkner, as directors, included the banking house among the assets of the bank, and all similar reports made after that date and before the suspension of the bank contained a similar entry. Samuel D. Faulkner died in 1878, and James, Sr., in 1884, after which the present James Faulkner became the president of the bank. Several of the reports and published statements of the character above mentioned were received in evidence, under the objection of the defendant, as were also declarations of James Faulkner made to the bank examiner in 1886 and 1887, before the execution of the deed to Hyland, to the effect that the deed in question had been executed to the bank. The last-mentioned declarations were received only as against the defendant James Faulkner, but we think all the evidence of the three classes mentioned was competent against Hyland, as declarations of a grantor while in possession of the property, before the conveyance to the defendant, and against his (the grantor's) proprietary interest. Such declarations are held to be admissible against such grantor and all persons claiming under him. Chadwick v. Fonner, 69 N. Y. 404, and the cases cited; Waring v. Warren, 1 Johns. 340, The weight and probative effect of such declarations must, of course, depend largely upon their character and the circumstances under which they are made; but that they are competent evidence in this case against the defendant, Hyland, as a person claiming under the declarant, seems to be established by the cases cited. It may also be noticed that Hyland claims under both James Faulkner, Sr., and Samuel D. Faulkner; because, it there was no conveyance to the bank, James Faulkner, Sr., inherited the undivided halt of his son Samuel D., who died first, intestate• and without issue, and James took a share of such undivided half under a general residuary clause in his father's will. The rule stated above, therefore, seems to apply to the declarations of both James Faulkner, Sr., and Samuel D. Faulkner, contained in the reports and statements signed by them.
We think there was no error on the trial, in the admission of evidence, to the prejudice of the defendant. The judgment should be affirmed.
Barker, P. J., concurs. organized under chapter 362 of the Laws of 1880, as amended by chapter 171 of the Laws of 1881. The plaintiff was one of the original incorporators of the company, and was one of its directors, and its secretary from its incorporation until January, 1886. By its by-laws (article 2, § 1,) the powers of the company are vested in its board of 12 directors. By section 8 of the same article the president, vice-president, and secretary constitute an executive committee, possessing and exercising all the powers of the board of directors when the latter is not in session. That committee holds stated meetings, quarterly, on the second Saturdays of January, April, July, and October, and at each stated meeting it is their duty "to examine and approve all applications upon which policies have been written during the quarter next preceding, and cancel or modify all policies which they do not approve." By section 7 of the same article "every application [for insurance] must receive the approval of one member of the executive committee before a policy can be issued." On the 11th day of July, 1885, the plaintiff, being such director and secretary of the defendant, filled out and signed an application for an insurance of $500 "on his wine-house and cellar," and of $1,500 "on his personal property kept stored therein. " He signed his own name, as member of the executive committee, to the certificate of approval indorsed on the application, and afterwards procured the signature of George Brown, who was vice-president, and one of the executive committee, to the same certificate. Brown was driving on the highway at the time. He testifies that he was returning home from a meeting of the executive committee, at whicli he had met the plaintiff, and that on the highway the latter presented the application to him, saying it was one which he (Brown) had overlooked; that he (plaintiff) had signed it, and it was all right. He testifies that he did not examine the application further than to see that the plaintiff had signed the approval, and that he signed it without knowing whose application it was. On the other hand, the plaintiff testifies that he told Brown it was his (the plaintiff's) application, and that Brown looked at the contents of the paper before signing the approval. The lltli day of July, 1885, which is the date of the application, was also the date of the second Saturday of July of that year, which was the time fixed by the by-laws for one of the stated quarterly meetings of the committee. It is not asserted that the plaintiff presented his application to the committee at its meeting on that day. Upon this application thus made and approved the plaintiff at some time issued to himself a policy of $2,000, corresponding in number (Ho. 747) and in the description of the property insured to the application. The policy bears no date, but purports to insure the plaintiff for the term of three years from the 11th day of July, 1885, which was the date of the application. It was filled out by the plaintiff on a form in his possession as secretary, already signed by the vice-president, and he countersigned it himself as secretary. By section 5, art. 2, of the by-laws of the company it is provided that the secretary shall write and countersign all policies of insurance; he shall act as general agent of the company during his term of office, and may canvass and receive applications for insurance, and receive such fees and commissions as may be paid to any other agents of the company. " On the secretary's book the plaintiff charged himself, under date of July 11, 1885, with the amount of the premium payable on the application, ($10,) and credited himself with "commissions on do., $1.00." At what date he wrote the policy for himself does not appear; but it does appear that at neither of the stated meetings of the executive committee in October or January following the date of the application was it submitted to the exec-