Valentine v. Austin — 36 N.Y. St. Rep. 400

Majority

p. 400

Ludlow W. Valentine, an Infant, App’lt, v. Susan A. Austin et al., Resp’ts.^[1]

[Court of Appeals, Second Division,

Filed March 10, 1891.)

Headnote

1. Record—Lis pendens.

When the action in which a Ms pendens was filed has heen dismissed and the notice canceled, it ceases to he a statutory notice to purchasers of the premises described in it.

2. Same—Bona pide purchaser.

When intending purchasers find that a Ms pendens his heen canceled, it is not negligence or evidence of bad faith on their part not to search for the papers which had been filed in such dismissed action.

Appeal from a judgment of the general term of the supreme court, in the second judicial department, entered on the decision of a special term.

Horace Secor, Jr., for app’lt; James D. Bell and W. 0. Beecher, for resp’ts.

The action was begun January 20, 1888, to-set aside the deed of June 7, 1886, from Catharine A. Valentine to Hermann T.- Richardt, on the grounds (1) that at its date the grantor was of unsound mind; (2) that it was obtained from her without consideration, by fraud and undue influence; and also to set aside the deed of October 27, 1886, from Richardt to Susan A. Austin, and the mortgage of October 1, 1887, given by her to Elizabeth H. Lunt, on the grounds (1) that each of .them had actual or statutory notice that Richardt acquired his title by fraud, or (2) that each of them had sufficient information of the circumstances under which he acquired his title to put them on inquiry, and having failed to inquire, notice to them of the fraudulent character of his title should be implied.

The court found that Mrs. Valentine was of sound mind on the-7th of June, 1886, and so remained until her death. But it was found that Richardt obtained his conveyance by undue influence and without consideration, and that the premises were then and ever since have been reasonably worth $15,000, and a judgment was ordered and entered against him for that sum with interest from the date of his deed, with costs. Richardt did not appeal from the judgment The complaint against Mrs. Austin and Mrs. Lunt was dismissed on the merits, and a judgment of dismissal entered, with costs in favor of each of them against the plaintiff, from which he appealed to the general term, where it was affirmed, with two bills of costs, from which affirmance he appealed to this court. Austin and Lunt, in compliance with the rule of pleading in such cases, Seymour v. McKinstry, 106 N. Y., 230 ; 8 N. Y. State Rep., 580; 11 id,, 760, alleged in their answers that the conveyance to each was for value, in,good faith and without notice of any kind that Richardt’s title was fraudulent.

A case not being annexed to the judgment roll, the only questions which are presented for discussion are those which arise on

p. 401

the plaintiff’s exceptions to the conclusions of law of the trial court.

Upon the issues joined between the plaintiff and the respondents, the court found that Mrs. Austin purchased the property from Eichardt in good faith, relying upon his possession and record title, without notice of any infirmity therein. The plaintiff conceded that this purchase was made in good faith, and went so far as to request the court to find “ that the defendant Austin purchased said property from said Eichardt in good faith, for $12,000, relying upon his record title and possession.” But he excepted to the sentence “ without notice of any infirmity therein,” which is the only finding to which an exception was filed, though exceptions were taken to all of the conclusions of law. As before stated, the evidence not being before the court, the finding so far as it is one of fact is conclusive, unless as the plaintiff asserts, it is inconsistent with and overthrown by the other facts found. It is not found nor is it asserted that either of the respondents had actual notice that Eichardt obtained his title by undue influence and without consideration, but it is asserted that both of them had either statutory or at least implied notice of the infirmity of his. title.

It is found that November 22,. 1883, Eichardt obtained, without consideration, by fraud and undue influence, a previous deed of this property from Mrs. Valentine, which was duly recorded the next day, and that in May, 1884, an action was begun in the city court of Brooklyn, in the name of Catherine A. Valentine by Charles H. Joy, her next friend, against Eichardt, to set aside the deed as fraudulent, and as obtained by undue influence and without consideration. It is also found that on the 7th of May, 1884, there was filed in the office of the clerk of the county of Kings a notice of the pendency of that action, which was in the usual form, the title being given, and stating in substance that its object was to set aside the conveyance of November 22, 1883. It is further found that by a deed dated May 22, 1884, Eichardt reconveyed the premises to Mrs. Valentine, and December 20, 1884, a final judgment was entered dismissing the complaint in the -last mentioned action; and September 6, 1886, the lis pendens was canceled by an order of the court in' which the action was brought. Before Mrs. Austin completed her purchase she received an official search, which revealed the fact that the lis pendens referred to was filed May 7, 1884, and canceled September 6, 1886. A like search disclosing the same facts was furnished Mrs. Lunt when she took her mortgage. The learned counsel for the plaintiff insists that the lis pendens was constructive notice, by force of the statutes relating to lis pendens, to the respondents that the first deed from Mrs. Valentine to Eichardt vías obtained by fraud. When the action in which the lis pendens was filed had been dismissed and the notice canceled, it ceased to be a statutory notice to purchasers of the premises described in it. Code Civ. Pro., §§ 1670-1674. It is difficult to conceive of an effective notice of the pendency of an action when no action is pending.

p. 402

It is further insisted that if the lis pendens was not a statutory notice that the facts found were sufficient to put the respondents, upon inquiry, and that they having failed to inquire were negligent and notice should be implied.

It is not found that the respondents or their attorneys knew of the existence of the judgment which was entered in the action, or had any knowledge of the relations which are now found to have existed between Mrs. Valentine and Richardt. When the respondents found that the Us pendens had been cancelled, it was not negligent, or evidence of bad faith on their part not to search for the papers which had been filed in an action which had been dismissed. It is not affirmatively found that a complaint was ever filed in that action, but if one was, and had been examined, it would have shown that the defendant Richardt was charged with having obtained a previous deed by fraud and undue influence, which taken in connection with the dismissal of the action, and the re-conveyance of the property, would not be sufficient to authorize this court to hold as a matter of law, despite the findings of fact referred to, that the grantee or mortgagee believed, or "had cause to suspect that Richardt’s title was fraudulent, or that they were negligent in not making further inquiry.

The judgment should be affirmed, with costs in favor of each ' respondent

All concur.