Lanktree v. Spring Mountain Acres, Inc.

[364]

SHENK, J.

This is an appeal from a judgment for the defendant in an action to set aside a deed.

For many years the plaintiff was the owner of a ranch called “Spring Mountain Ranch”, comprising some 688 acres, and situated in Napa and Sonoma Counties, this state. Prior to July, 1927, the property had become run down, the buildings dilapidated and the owner had become financially involved. The Bank of America, St. Helena branch, held a trust deed against this property securing a loan of $3,900 which the bank was threatening to foreclose. Wilbur J. Lanktree, son of the plaintiff, and acting in her behalf, approached the defendant Roberts to enlist his interest in aiding the plaintiff in her financial difficulties. Mr. Roberts was in association with the defendant Robinson as building contractors in Oakland and elsewhere, conducting their business through the medium of a corporation called Roberts-Robinson Company. At the solicitation of the son, Mr. Roberts visited the plaintiff’s ranch and after a considerable lapse of time became interested in a proposition to improve said ranch and convert it into a resort of mountain cabins, golf course, etc., as well as to conduct ranching operations in conjunction with an adjoining 240-acre ranch acquired by Mr. Roberts. During his. investigation and negotiations with the plaintiff, Mr. Roberts advanced money to pay taxes and incidental expenses on the plaintiff’s ranch. Finally an agreement was reached whereby a corporation was to be formed under the name of Spring Mountain Acres, Inc. To this corporation the title to the two ranch properties was to be conveyed and the capital stock of the corporation was to be 250 shares of the par value of $100 each. One hundred twenty-three shares were to be issued to the plaintiff, sixty-four shares to Mr. Roberts, and sixty-three shares to Mr. Robinson. The defendants Roberts and Robinson agreed to assume and pay the $3,900 obligation secured by the trust deed on the plaintiff’s property.

Pursuant to the agreement the plaintiff, in January, 1928, executed a deed conveying title to her ranch to “Spring Mountain Acres, Inc.”, and delivered it to Mr. Roberts for the purpose of carrying out the transaction. Thereafter, in March, 1928, the corporation was organized by the plaintiff, Roberts and Robinson, a qualifying share of stock having