Standard Livestock Co. v. Bank of California

For some years prior to August 9, 1917, L. B. McMurtry owned the Ridgewood Ranch, located between Willitts and Ukiah, in Mendocino County. Prior to that date the owner had become financially involved. He owed the First Federal Trust Company, on notes past due secured by mortgage on the ranch, over $85,600. At the same time he owed the Bank of California $52,500 on unsecured notes. Other creditors existed and were pressing their claims. On the date last mentioned McMurtry executed to William R. Pentz a grant, bargain and sale deed conveying to Pentz the entire title. At the same time Pentz executed a defeasance reciting that the deed was made as security for McMurtry’s indebtedness to the bank and agreeing that the property should be reconveyed upon the payment of the indebtedness. Pentz was one of the assistant cashiers of the bank, and, it may be added, he was the brother-in-law of McMurtry. McMurtry received the defeasance but did not record it. The deed to Pentz was duly recorded. After these things had occurred B. P. Noonan and McMurtry discussed the making of a lease under the terms of which the entire ranch would be leased to Noonan except that McMurtry would reserve hunting…