Portola Realty Co. v. Carlston

RICHARDS, J.

This is an appeal from a judgment in favor of the defendants in an action in equity brought by the plaintiff, seeking relief from a sale of real estate under a

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trust deed, of which the defendants Carlston and Harris were the trustees, and at which sale the defendant Winship was the purchaser of the property covered by said trust deed.

The facts of the case are undisputed, and are these: On 'July 6, 1912, the plaintiff and appellant herein executed a trust deed covering the real estate in question to secure its indebtedness evidenced by its promissory notes in the sum of $58,077.32 to E. Winship, the defendants Carlston and Harris being named as trustees in said deed. This deed of trust was in the usual form, and provided that in the event of the grantor’s default, and upon demand of the beneficiaries, the trustees were required to sell the property at public auction as a whole, or, in their discretion, in such parcels or subdivisions as they in their judgment should deem reasonable, after publishing notice of time and place of sale once a week for three weeks; and also provided as one of the terms of such sale that all bids and payments should be made in United States gold coin. Shortly after the execution of the promissory notes and deed of trust Mr. Winship transferred the same to the Central National Bank of Oakland as collateral security for a certain indebtedness of the United Iron Works, of which he was president. At the time of such transfer, and up to and after the sale under the trust deed, the said Carlston, one of said trustees, was president of said bank, and Harris, the other of said trustees, was a stockholder therein. The promissory notes of the plaintiff fell due on or about June 6, 1913, and were unpaid. Five days thereafter the said Central National Bank served a written demand upon the trustees, reciting that default had been made in the payment of these notes, and demanding that the property be sold under the provisions of the trust deed. In response to this demand the trustees gave notice of their proposed sale of the premises in question to be held on July 8, 1913, the said notice being published once a week for three weeks prior to the fixed day of sale. In said notice it was provided and published that the premises would be sold in one parcel. On July 7, 1913, one day before the sale, the plaintiff herein commenced an action in the superior court of the county of Alameda, seeking to restrain such sale, and in such action obtained a temporary restraining order, requiring the trustees to show cause on July 11, 1913, why they should not be enjoined from selling the premises during the pendency of the action. On