San Ramon Valley Bank v. Walden Co.

RICHARDS, J.

This action was instituted for the foreclosure of two mortgages covering a tract of land described as lot 21 in the Walden Tkact, in' the county of Contra Costa. The first of these mortgages was one purporting to have been executed by The Walden Company, a corporation, to the plaintiff herein on May 1, 1918, as security for a promissory note for the sum of $1,500; the second mortgage was one executed on November 25, 1918, by The Walden Company to one C. R. Hook, as security for its promissory note for the sum of $250, which last-named note and mortgage were assigned to the plaintiff herein on December 20, 1918. The defendants R. S. N. Burdick and Mary Burdick, his wife, who are the ap

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pell ants herein, appeared in said action and filed their answer therein, setting forth certain defenses which they are now urging upon this appeal. A consideration of these defenses requires a brief recital of the facts showing the relation of the defendants Burdick to their codefendant, The Walden Company, and to the premises affected by these mortgages and by the foreclosure thereof. On and prior to the fifth day of April, 1918, The Walden Company was the owner of lot 21 in the Walden Tract and on that day entered into an agreement with R. S. N. Burdick and Mary Burdick, which, while of a somewhat involved nature, disclosing past dealings and differences between the parties to it, amounts in substance to an agreement for the conditional sale of said lot 21 in the Walden tract by The Walden Company to the Burdicks for a purchase price totaling $2,659.10, which was to be made up in the following manner: The Walden Company was to negotiate a loan of $1,500 secured by its mortgage upon the premises in question, upon obtaining which it was to deed the premises to the Burdicks, subject to the encumbrance thus created, which they were to assume and pay; and, in addition to this, they further agreed to pay The Walden Company the sum of $1,159.10 in monthly installments of $150 as the balance of the purchase price of said premises until the same was fully paid. Thereafter and on May 1, 1918, The Walden Company, through its vice-president and secretary, borrowed the sum of $1,500 from the San Ramon Valley Bank, the plaintiff herein, giving the promissory note and mortgage therefor, signed by its aforementioned officials and attested by the seal of the corporation, which is the main subject of this foreclosure suit. It was the contention of the Burdicks at the trial and is their contention upon this appeal that the said officials of The Walden Company who executed said note and mortgage had no authority so to do. This contention is based upon a certain resolution of the directors of The Walden Company, passed by them on May 1, 1918, authorizing the vice-president and secretary of the corporation to borrow the sum of $1,000 from the San Ramon Valley Bank, to be secured by a mortgage upon the premises in question.