This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
67. Jor.-s v. Robinson, 77 Ala. 499; Randolph v. Webb, 116 Ala. 135, 22 So. 550; Hill v. Yar brough, 62 Ark. 320, 35 S. W. 433; Tripler v. Macdonnid Lura ber Co., 173 Cal 144, 159 Pac. 591; Gilchrist v. Hough, 63 lnd. 576, 30 Am. Rep. 250, Koon v.
Tramel, 71 Iowa, 132, 32 N. W. 243; De Mey v. Defer, 103 Mich. 239, 61 N. W. 524; Schumpert v. Dillard, 55 Miss. 348; Dourde-doure v. Humbert, 85 N. J. Eq. 89, 95 Atl. 742; O'brien v. Fleckenstein, 180 N. Y. 350, 105 Am. St. Rep. 768, 73 N. E. 30; Branch v. Griffin, 99 N. C. 173, 5 S. E. 393, 398 isemble); First Nat. Bank v. Lamont, 5 N. D. 393, 67 N. W. 145: Farmers & Merchants' Nat. Bank v. Wallace, 45 Ohio St. 153, 12 N E. 439; Pittsburgh & C. R. Co. v. Barker. 29 Pa. St. 160; Farmer's & Merchants' Bank v. Citizens" Nat. Bank, 25 S. D. 91, 125 N. W. 642; Steffian v. Milmo Nat. Bank, 69 Tex. 513, 6 S. W. 823.
68. Saffold v. Wade, 51 Ala. 214; Foorman v. Wallace, 75 Cal. 552, 17 Pac. 680; Schluter v. Harvey, 65 Cal. 158, 3 Pac. 659; Jerome v. Carbonate Nat. Bank, 22 Colo. 37, 43 Pac. 215; Sutton garded.69 On principle, it would seem, the former view-is the more satisfactory, and such a view is in no way inconsistent with the view that one to whom a mortgage is given to secure a pre-existing debt is not a purchaser for value, since there is, in the latter case, no relinquishment of the claim. It has, nevertheless, been asserted by an able writer,70 that, however, logical may be the view that a conveyance is on valuable consideration if executed in satisfaction of a debt, and is not on valuable consideration if executed as security for a debt, such a distinction is unfortunate in its practical results, as rendering it possible for the creditor, in his testimony, to give such a color to the transaction as may be most for his benefit, as against a third person not a party to the transaction. This is no doubt true, to some extent at least, but whether it is desirable to obscure the legal principles applicable to a particular state of facts for the sake of diminishing the possibility of perjury, a possibility which can never be entirely excluded, may well be doubted, and it may be remarked, moreover, that this is by no means the only case in which a person may be affected by the testimony of v. Fork, 144 Ga. 587, 87 S. E. 799; Bunn v. Schnellbaeher, 163 111. 328, 45 N. B. 227 (semble); Adams v. Vanderback, 148 Ind. 92, 62 Am. St. Rep. 497, 45 N. E. 645, 47 N. E. 24; Busey v. Reese, 38 Ind. 264; Hanold v. Kays, 64 Mich. 439, 8 Am. St. Rep. 835, 31 N. W. 420; Soule v. Shot-well, 52 Miss. 236; State Bank of St. Loais v. Frame, 112 Mo. 502, 20 S. W. 620; Clements v. Doerner, 40 Ohio St. 632; Alstin's Ex'r v. Cundiff, 52 Tex. 453; Cammack v. Soran, 30 Gratt. (Va.) 292; Shufeldt v. Pease, 16 Wis. 659.
69. Landv. Hea, 20 Idaho, 250, 118 Pac. 506; Metropolitan Bank v. Godfrey, 23 111. 579; Lillibridge v. Allen, 100 Iowa, 582, 69 N. W. 1031; Western Grocer Co. v. Alleman, 81 Kan. 543, 27 L. R. A. (N. S.) 620, 135 Am. St. Rep. 398, 106 Pac. 460; Schloss v. Feltus. 103 Mich. 525, 36 L. R. A. 161, 61 N. W. 797; Pan-coast v. Duval, 26 N. J. Eq. 445; Dickerson v. Tillinghast. 4 Paige (N. Y.) 215, 25 Am. Dec. 528; Howells v. Hettrick, 160 N. Y. 308,
Another person as to a matter in regard to which he himself is not in a position to testify.
54 N. E. 679; Temple v. Osburn,
55 Ore. 506, 106 Pac. 16; Steffian v. Milmo Nat. Bank, 69 Tex. 513, 6 S. W. 823.
70. 2 Pomeroy, Eq. Jur. Sec. 749. And see Retsch v. Renehan, 16 N. Mex. 541, 120 Pac. 897; Gest v. Packwood, 34 Fed. 368.
In a few of the states in which one who receives a conveyance in satisfaction of an indebtedness is not ordinarily regarded as a purchaser for value, it has been decided, apparently, that he is such a purchaser if, at the time, he relinquishes security which he holds for the indebtedness.71 But since the satisfaction and consequent extinguishment of the debt would necessarily release the security for the debt, it is not readily apparent why the express relinquishment of security should, when accompanying a satisfaction of the debt, constitute a valuable consideration.
- (c) Adequacy of consideration. It is generally agreed that, in order that one may be protected as a purchaser for value, it is not necessary that the consideration paid by him be adequate, that is, that it equal the full value of the property.72 On the other hand it is said that one who pays a merely "nominal" consideration cannot claim as a purchaser for value.73 What degree of inadequacy is necessary to render the consideration merely nominal is a question of difficulty.
71. Bunn v. Schnellbacher, 163 111. 328, 45 N. E. 227; Grand Rapids Nat. Bank v. Ford, 143 Mich. 402, 114 Am. St. Rep. 668, 8 Ann. Cas. 102, 107 N. W. 76; Padgett v. Lawrence, 10 Paige (N. Y.) 170, 40 Am. Dec. 232.
72. Frey v. Clifford, 44 Cal. 335; Ennis v. Tucker, 78 Kan. 55, 130 Am. St. Rep. 352; Strong v. Whybark, 204 Mo. 341, 12 L. R. A. (N. S.) 240; Hume v. Ware, 87 Tex. 380, 28 S. W. 935; Reed v. Nunn, 80 C. C. A. 215, 148 Fed. 737; Bassett v. Notworthy, Rep. temp. Finch, 102, 2 White & Tudor's Leading Cas. in Eq. 1.
But in North Carolina it is said that the price must be fair and reasonable. Collins v. Davis, 132 N. C. 106, 43 S. E. 579.
73. Curtis v. Riddle, 177 Ala. 128, 59 So. 47; Morris v. Wicks, 81 Kan. 790, 26 L. R. A. (N. S.) 681, 106 Pac. 1048; Tinnin v. Brown, 98 Miss. 378, Ann. Cas. 1913A, 1081, 53 So. 780; Ten Eyck v. Witbeck, 135 N. Y. 40, 31 Am. St. Rep. 809, 31 N. E. 994; Abernathy & South & W. R. Co., 150 N. C. 97, 63 S. E. 180; Huff v. Maroney, 23 Tex. Civ. App. 465, 56 S. W. 754; Dunn v. Barnum, 2 C. C. A. 265, 51 Fed. Fed. 355. In Nichols-stewart v. Crosby, 87 Tex. 443, 29 S. W. 380, it was decided that a conit has been said in this connection that "a small sum, inserted and paid, perhaps because of a popular belief that some slight money consideration is necessary to render the deed valid, will not of itself satisfy the terms of the (recording) statute, where it appears upon the face of the conveyance, or by other competent evidence, that it was not the actual consideration."74 This statement was made in connection with a conveyance to a near relative, and it indicates, it is conceived, the proper criterion for such a case, that is, that if the transaction is in reality a gift, though under the guise of a sale, the beneficiary is not a purchaser for valuable consideration.75 It does not seem, however, that one who pays a substantial price should be deprived of the protection accorded a purchaser for value merely because, by reason of relationship or friendship, he acquires the property at a price lower than would have been demanded of another person, except as this may tend to charge him with notice.