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 .
In the case of a transaction between persons who are connected by no ties of relationship or friendship, the possibility of regarding the transaction as a gift is excluded, and it can only be regarded as a sale. Though one pays only ten dollars for property worth one thousand, he is, unless the transaction was intended as a gift, actually a purchaser, and it is difficult to say that ho is not a purchaser for value. But that the property is offered to him at such a decidedly inadequate price is sufficient to subject him to a duty of inquiry as to the sideration of five dollars for property worth eight thousand was "too grossly inadequate."
74. Ten Eyck v. Witbeck, 135 N. Y. 40, 31 Am. St. Rep. 809, 31 N. E. 994. See also Martin v. White, 115 Ga. 866, 42 S. E. 279.
75. In Strong v. Whybark, 204 Mo. 341, 12 L. R. A. (N. S.) 240, 120 Am. St. Rep. 710, 102 S. W.
968, the transaction was evidently merely a gift, and it does not seem that the grantee should have been protected as a purchaser for value. The view there stated that a consideration of one dollar or less is insufficient to entitle the purchaser to protection, while any greater sum is sufficient, is most unsatisfactory.
Existence of an adverse claim,76 and a very great discrepancy between the consideration paid and the market value of the property might, it seems, of itself justify a finding that the purchase was not bona fide.77
- (d) Notice before payment. A purchaser who did not pay the consideration before receiving notice of the adverse right cannot claim priority thereto, even though he had previously received a transfer of the legal title.78 He can assert the adverse right as a defense to the claim for the purchase price, and hence is not in the position of a purchaser for value.
- (e) Notice after part payment. A purchaser to whom the legal title has been conveyed, and who paid part, but not all, of the purchase money, before obtaining notice of the adverse claim, is usually considered as entitled to protection to the extent of the payments made by him before receiving notice.79 The
76. Ante, Sec. 569, note 55.
77. Dunn v. Barnum, 2 C. C. A. 265, 51 Fed. 355; Reed v. Munn, 80 C. C. A. 215, 148 Fed. 737; Nichols-stewart v. Crosby, 87 Tex. 443, 29 S. W. 380.
78. Wells v. Morrow, 38 Ala. 125; Duncan v. Johnson, 13 Ark. 190; Beattie v. Crewdson, 124 Cal. 577, 57 Pac. 463; Donalson v. Thomason, 137 Ga. 848, 74 S. E. 762; Brown v. Welch, 18 111. 343, 68 Am. Dec. 549; Schultze v. Houfes, 96 111. 335; Sillyman v. King, 36 Iowa, 207; Winlock v. Munday, 156 Ky. 806, 162 S. W. 76; Blanchard v. Tyler, 12 Mich. 339, 86 Am. Dec. 57; Fraser v. Fleming, 190 Mich. 238, 157 N. W. 269; Marshall v. Hill, 246 Mo. 1, 151 S. W. 131; Holladay v. Rich, 93 Neb.| 491, 140 N. W. 794; Patten v. Moore, 32 N. H. 382; Jewett v. Palmer, 7 Johns.
Ch. (N. Y.) 65, 11 Am. Dec. 401; Halloran v. Holmes, 13 N. D. 411, 101 N. W. 310; Evans v. Tem-pleton, 69 Tex. 375, 5 Am. St. Rep. 71, 6 S. W. 843; Lamar's Ex'r v. Hale, 79 Va. 147; Tibbs v. Zirgle, 55 W. Va. 49, 104 Am. St. Rep. 977, 2 Ann. Cas.421, 46 S. E. 701; Trice v. Comstock, 57 C. C. A. 646, 121 Fed. 620, 61 L. R. A. 176.
79. Craft v. Russel, 67 Ala. 9; House v. Davis, 196 Ala. 153, 71 So. 685; Davis v. Ward, 109 Cal. 186, 50 Am. St. Rep. 29, 41 Pac. 1010; Donaldson v. Thomason, 137 Ga. 848, 74 S. E. 762; Dickinson v. Wright, 56 Mich. 42, 22 N. W. 312; Parker v. Foy, 43 Miss. 260, 5 Am. Rep. 484; Macauley v. Smith, 132 N. Y. 524, 30 N. E. 997; Rector v. Wildrick, -Okla. - , 158 Pac. 610; Youst v. Martin, 3 Serg. & R. (Pa.) 423;
2 R. P. - 67 mode of effecting this protection is, however, a matter as to which the cases do not lay down any uniform rule. It is sometimes stated that the adverse claimant cannot assert his claim against the land in the hands of the purchaser without reimbursing the latter the amount paid by him before receiving notice,80 while, by other cases, the adverse claimant is not entitled, as against the purchaser, to recover the land, but can merely assert his claim to the extent of the purchase money not paid at the time of the purchaser's acquisition of notice, such unpaid purchase money being thus in effect substituted for the land.81 As between these two methods of adjusting the rights of the parties, that one should be adopted which, in view of the facts of the case, is most likely to produce an equitable result, and this would depend to some extent, it seems, upon the respective portions of the purchase money paid and unpaid at the time of the acquisition of notice, and also upon the relation of the agreed price to the actual value of the property.82 In order that the purchaser may obtain reimbursement for the amount paid by him
Sparks v. Taylor, 99 Tex. 411, 6 L. R. A. (N. S.) 381, 90 S. W. 485. But see Wormley v. Worm-ley, 8 Wheat. (U. S.) 421, 450, 5 L. Ed. 651; Doswell v. Buchanan. 3 Leigh (Va.) 365; Heck v. Fink, 85 Ind. 9.
80. Marchbanks v. Banks, 44 Ark. 48; Henry v. Phillips, 163 Cal. 135, 124 Pac. 837; Kitteridge v. Chapman, 36 Iowa, 348; Bennett v. Titherington, 6 Bush (Ky.) 193; Wiles v. Shaffer, 175 Mich. 704, 141 N. W. 599 (sem-ble); Dougherty v. Cooper, 77 Mo. 528; Haughout v. Murphy, 22 N. J. Eq. 531; Fluegel v. Henschel, 7 N. D. 276. 66 Am. St. Rep. 642, 74 N. W. 996; Webb v. Bailey, 41 W. Va. 463, 23 S.
If the purchaser has already been reimbursed out of the rents and profits of the property, he cannot, it has been held, claim any further reimbursement for the payments made by him. Beck v. Ulrich, 13 Pa. 636, 16 Pa. 499.
81. Flagg v. Mann, 2 Sumn. 486, 563; Dowell v. Applegate, 7 Fed. Rep. 881; Baldwin v. Sager, 70 111. 503; Burton v. Regan, 75 Ind. 77; Green v. Green, 41 Kan. 472, 21 Pac. 586; Hardin v. Harrington, 11 Bush (Ky.) 367; Sparks v. Taylor, 99 Tex. 411, 427, 6 L. R. A. (N. S.) 381, 90 S. W. 485.
82. See Durst v. Daugherty, 81 Tex. 650, 17 S. W. 388.