Court Opinion

ID: 5441740
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:04:13.40129+00
Date Added: 2024-06-11T08:32:01.879888
License: Public Domain

Thornton, J.
The conveyance made by plaintiff to Slauson was on sufficient consideration, to wit, that Slauson would prevent the recovery of or protect plaintiff against any personal judgment on a certain contract of guaranty in the action brought by the Los Angeles County Bank against Wolfskill, plaintiff, and others. This Slauson agreed to do. On this agreement the conveyance was executed. A promise for a *427promise is a sufficient consideration. (1 Pars. Contracts, 373.) The promise on the part of plaintiff was to make a conveyance if Slauson would agree to protect it, and the promise on the part of Slauson was to protect it, in consideration of the conveyance.
It may be remarked that this promise by Slauson appears to have been complied with, for in the action the bank failed to recover a personal judgment against the plaintiff.
In this view it makes no difference that plaintiff was not bound on the guaranty, which, it was claimed, subjected it to a personal judgment in the suit of the bank. Slauson agreed to protect it from any judgment against it in that suit. Whether it was bound or not by the guaranty was the very question to be determined in that suit, and Slauson undertook to defend the suit and defeat the claim against plaintiff; or if he could not defeat the action and judgment passed against it, to protect it against such judgment.
It is said that the contract of guaranty was ultra vires, and therefore did not bind the corporation. But the bank in its action was claiming that this contract was not ultra vires; that it bound plaintiff, and was seeking to make it liable in the suit and have judgment against it. Whether Slauson knew or thought the contract bound plaintiff or not does not appear; but it makes no difference whether he thought or knew it did not. He may have acted on the view of the law that it did -not bind plaintiff, 'but this was the very point in judicature, and we see no reason why, if he was clear and positive in his opinion that plaintiff was not bound, that he could not contract as he did. He bore no relation of trust or confidence to the plaintiff which bound him to take care of its interests. He was not its guardian, agent, director, or trustee. The parties dealt at arms length, untrammeled by any confidential or fiduciary relations. The fact that Slauson was, at the time the contract was made, the president of the board of directors of the Los Angeles County Bank, cuts no figure in the matter. His holding that position did not render his contract illegal. The transaction is not claimed or alleged to have been in any way fraudulent, except as to the inducement to the members of plaintiff’s board of directors to sanction the contract with and conveyance to *428Slauson, viz., that it was made to protect themselves against personal liability as stockholders of the plaintiff corporation. This motive was not alleged to have been known to Slauson, or that he acted on it: Conceding that this motive on the part of the directors would have made the conveyance fraudulent, as Slauson knew of no such motive, he could not have acted on it, and he was guilty of no fraud.
The same reasoning applies, if the contract of guaranty made by the plaintiff was without consideration: Slauson’s contract may have induced, and no doubt did induce him to defend the action, and he had a right to defend on both grounds, that plaintiff’s contract was without consideration and ultra vires, or on either. Slauson- did not contract that plaintiff’s contract was ultra vires, and without (consideration, and therefore of no force, but that he would prevent a judgment against plaintiff, or if recovered, would protect plaintiff from it. At any rate, the outcome was that plaintiff succeeded in the action.
Whatever title the bank acquired to the lands involved herein was obtained by a fair purchase under a fair sale in the foreclosure suit. If it purchased in this mode the San Jose Rancho and the San Jose addition (that it purchased does not clearly appear) there was a redemption from the purchase of these lands by Wolfskill. As to the Azusa Rancho, there was no redemption, and for this property a sheriff’s deed was made to it after the lapse of the proper period, and it (the bank) subsequently conveyed this rancho to defendant Philip H. Martz. These sales to and purchases by the bank are not assailed in any way as unfair. If they were unfair, redress should have been sought by a motion to the court, in which the judgment of foreclosure was rendered, to have them vacated.
We find no averment in the complaint of any circumstances which vested in plaintiff herein any equity by which to charge the bank as its trustee. The grantee of the bank, Philip H. Martz, stands in its place, and occupies a position equally as favorable. There is nothing to justify fastening a trust on Martz, either as the grantee of the bank or of Slauson.
We will add' here that there is no charge of a combination or collusion by Slauson with the directors, who, as a board, authorized the conveyance to him, to defraud the corporation or its *429stockholders, and no facts averred which show any such combination or collusion. Nor is it alleged that Slauson was the bank in another guise, the latter seeking through him, as its instrument or intermediary, to secure an inequitable advantage of the plaintiff or its stockholders.
We think the judgment should be affirmed and it is so ordered,
Sharpstein, J., Ross, J., McKinstry, J., and Myrick, J., concurred.