Mulkey

Appellant Rogers, as trustee in bankruptcy of the estate of one Gus R. Smith who was adjudicated a bankrupt on April 24, 1941, commenced an action against respondents in which appellant sought to have a grant deed to certain real property in Butte County, executed by the bankrupt Smith to respondents, dated December 5, 1938, and recorded December 10, 1938, declared to be a mortgage with right of redemption. Appellant also sought in the same action to have said deed declared void as being in fraud of creditors and also sought to set aside a judgment entered on July 17, 1939, quieting respondents’ title to said property against said bankrupt.

Respondents in their answer denied that the deed in question was intended as a mortgage or as other than an unconditional conveyance, denied that it was for the purpose of defrauding creditors, and denied that they had concealed any facts from the court in the action to quiet title. They also filed a cross-complaint in which they sought to quiet their title against appellant trustee in bankruptcy and also against appellant Mercantile Acceptance Corporation which had attached the property prior to the bankruptcy proceedings.

Following a trial…