Montgomery v. Peterson

THE COURT.

This action is to set aside two deeds on the ground of alleged fraud. The appeal is by the corporation defendant, Tucker Farming Company, and is from the judgment directing it to execute deeds to the plaintiffs and from an order denying its motion for a new trial.

The real property in question consists of an undivided two-fifths of the remainder in fee of a tract of approximately ninety-five acres, valued at two hundred dollars an acre, situated in Monterey County. On August 4, 1898, the owner of the property at that time, by deed duly recorded on that date, conveyed a life estate therein to Ira B. Tucker, with remainder in fee to the latter’s five sons and daughters, two of whom are the plaintiffs herein. At the time of the execution of the deeds here involved in the year 1902, the interest of the life tenant in the property was encumbered by a mortgage and there were delinquent taxes upon the whole tract amounting to four hundred and sixty-eight dollars. The interests of the plaintiffs were not encumbered otherwise than by the lien of these delinquent taxes. When the plaintiffs executed their deeds Maud Montgomery was a married woman and John Tucker was 21 years of age. The life tenant was inclined to dissipation, and F. S. Baker, who was the agent of the life tenant, approached the defendant C. W. Peterson with a proposition to form a corporation, and consolidate

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therein the life estate and remainder interests, with a view to the better exploitation of the land by placing it under irrigation and rendering it more productive. C. W. Peterson at once took up the proposition with the owners of the land. In exchange for their conveyances the grantors were to receive certain money and a proportionate share of the stock of a proposed corporation. After considerable negotiation all of the interested parties except one Kitty Tucker reached an agreement along the lines mentioned. This agreement was executed by the parties interested on the twenty-third day of July, 1902, and was acknowledged before a notary public by Ira B. Tucker, the life tenant, Minnie Tucker, and the defendant, C. W. Peterson. The agreement in part provides for conveying the property, the time when the deeds shall be delivered and the amount of cash and the number of shares in the corporation to be received by each of the parties. On the same day that this agreement was executed Ira B. Tucker and Minnie Tucker likewise executed and acknowledged the deed and acknowledged a letter of instructions to their agent, F. S. Baker, and, pending the formation of the corporation, deposited with him the deed in escrow. The agreement, deed, and letter of instructions were forwarded to the plaintiff and Maud Montgomery in San Francisco for execution, and they were accompanied by a letter to her from Ira B. and Minnie Tucker, directing her to deliver the deed and letter of instructions to Baker. On July 24, 1902, in San Francisco, she executed these documents before a notary public, and four days later delivered them to Baker, and also signed the following: “San Francisco, July 28, 1902. I hereby deliver to F. S. Baker the aforesaid deed, also letter of instructions.” She then received as her proportion of the venture two hundred and fifty dollars in cash and later three thousand six hundred shares of the capital stock of the corporation, which in the mean time had been organized.