Geo. M. McDonald & Co. v. Johns
Washington Supreme Court
114 P. 175 (1911)
Relevant factsFree
Johns, indebted to both McDonald (plaintiff) and Bechtol, signed mortgages on the same property in favor of each creditor; Bechtol's mortgage was signed and delivered first, but McDonald's mortgage, given purely as security for Johns's preexisting debt with no new consideration paid, was recorded first, and McDonald had no actual notice of Bechtol's earlier mortgage. The trial court held McDonald was not a bona fide purchaser for value because it paid no valid consideration for its mortgage, and McDonald appealed.
IssueFree
Whether a conveyance of property as security for a preexisting debt is made upon sufficient consideration to make the creditor a bona fide purchaser of the property.