California & Arizona Land Co. v. Cuddeback

CONREY, P. J.

In this action plaintiff seeks to recover the sum of one thousand seven hundred and fifty dollars alleged to have been received by defendants to and for the use of plaintiff and which the defendants have refused to repay. From a judgment in favor of the defendants plaintiff appeals.

The principal questions in this ease involve the validity of an attempted purchase of land by the plaintiff from the defendants, in view of alleged want of authority of an officer of the corporation to act in its behalf, and the right of the defends at Cuddeback to sell to the corporation his own real property while he was himself a director of the purchasing corporation.

In February, 1912, the California & Arizona Land Company, a California corporation, was organized by Robert G. Hill and others for the purpose of carrying on, among other things, the business of buying and selling land. The by-laws of the corporation contain provisions setting forth the duties of the president and other officers. Article XX reads as follows: “The board of directors may elect a general manager who may be the president of the corporation. It shall be the duty of the general manager of the corporation to look after the purchases and sales of real estate; ... to contract with agents or other persons for the purchases and sales of real estate, ... ; all of which shall be subject to the approval of the president, in the event that the president should not be the general manager.”

During the entire period of time covered by the transactions under review in this action Robert G, Hill was both president

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and general manager of the corporation and he was distinctively the person most active in the conduct of its affairs. Although the minutes of the board of directors do not show a formal election of Robert G. Hill as general manager, they do show that on February 15, 1912, the board adopted a motion providing the allowance to be made to him “for his services as president and general manager of the company.” In the latter part of April, 1912, Robert G. Hill and the defendant Cuddeback visited and inspected a tract containing 160 acres of land owned by John P. Cuddeback and Etta B. Smith and located in the southern part of Kern County. On May 3, 1912, John P. Cuddeback and Etta B. Smith executed to appellant an instrument in writing whereby, in consideration of eight thousand dollars paid and to be paid at the times therein specified, they agreed to convey to appellant said quarter section of land. This instrument also bears the signature (made at the same time) “California & Arizona Land Co., by Robert G. Hill, President.” Under this contract three payments were made during the same month, amounting in all to the sum of one thousand seven hundred and fifty dollars, which is the sum sought to be recovered in' this action. These payments were made by checks signed “California & Arizona Land Co., Robt. G. Hill, Pres., W. Lambert Hill, Sec.,” which were duly cashed at the bank on which they were drawn. In June, 1912, Robert G. Hill caused to be made a survey of the exterior lines of the quarter section described in the contract. Thereafter, on June 25, 1912, in a letter addressed to C. F. Smith (who was representing the vendors in the matter of receiving payments and arranging for conveyance to be made under the contract) he expressed some disappointment about the locations of boundaries of the tract as shown by the survey and suggested that the one thousand seven hundred and fifty dollars be paid back to the company, letting the vendors keep the land. He said that when he looked at the tract to buy it for the company it appeared to be inclosed on three sides with a good and sufficient barbed wire fence, whereas according to the survey the lines of the tract came entirely within and some distance from three certain lines of fences^ leaving those lines of fence on the lands of other owners. The vendors did not accept the suggestion thus made for termination of the contract. There