Hinrichsen v. Imperial Water Co. No. 1

CONREY, P. J.

This is an action brought by the plaintiff to compel the transfer to him, on the boobs of defendant corporation, of 160 shares of its capital stock. The defendant Farnsworth filed with his answer a cross-complaint, alleging that the plaintiff converted the stock to his use, to Farnsworth’s damage in the sum of $4,800. Judgment was entered in favor of the plaintiff, and Farnsworth appeals therefrom.

On the first day of June, 1910, L. F. Farnsworth and R. H. Benton executed to A. A. Cox their note in the sum of $12,600, due on or before January 1, 1916, secured by a trust deed of that date conveying to the trustee certain ' described real property in the county of Imperial, together with said 160 shares of capital stock of Imperial Water

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Company No. 1. It was provided therein that upon default in payment of the debt the trustee ‘ ‘ shall sell the above granted premises, or such part thereof as in his discretion he shall find it necessary to sell,” in the manner described in the deed, namely: by first publishing notice of the time and place of such sale, with a description of the property to be sold, at least once a week for four weeks in some newspaper published in said county of Imperial. On May 29, 1918, Cox transferred to Hinrichsen said promissory note, together with the security. Default having been made in the payment of the note, the trustee, on request of Hinrichsen, advertised the property in the manner described in the trust deed for sale on the sixteenth day of July, 1918. At that time the trustee offered for sale to the highest bidder all of the property described in the deed, including said 160 shares of capital stock. At the time of execution of the trust deed Farnsworth and Benton had caused the water stock to be issued to Cox, pledgee of Farnsworth and Benton, and had delivered said water stock to Cox without the indorsement of said pledgors. At the time appointed for the sale and when the property was offered for sale, both Farnsworth and one Wallace Merchant were present. This occurred pursuant to an agreement in writing theretofore made between the two men last named which referred to the proposed sale of land and water stock, and wherein Merchant agreed to bid for the property the sum of $30,000, and further agreements were made with respect to the terms on which Merchant should hold the title, if Merchant became purchaser at such sale. Merchant did bid the sum of $30,-000, but the property was sold to Hinrichsen by reason of the fact that Hinrichsen bid the higher sum of $30,350. After the sale and on the same day, the defendant Farnsworth directed the trustee to pay out of the purchase money received from the sale several sums of money and said sums were by virtue of such order paid out by the trustee, thereby exhausting the entire proceeds of the sale over and above the sum of approximately $20,000 owing to Hinrichsen.