Mound City Land & Water Ass'n v. Slauson

Thornton, J. The conveyance made by plaintiff to Slauson was on sufficient consideration, to wit, that Slauson would prevent the recovery of or protect plaintiff against any personal judgment on a certain contract of guaranty in the action brought by the Los Angeles County Bank against Wolfskill, plaintiff, and others. This Slauson agreed to do. On this agreement the conveyance was executed. A promise for a [427]promise is a sufficient consideration. (1 Pars. Contracts, 373.) The promise on the part of plaintiff was to make a conveyance if Slauson would agree to protect it, and the promise on the part of Slauson was to protect it, in consideration of the conveyance.

It may be remarked that this promise by Slauson appears to have been complied with, for in the action the bank failed to recover a personal judgment against the plaintiff.

In this view it makes no difference that plaintiff was not bound on the guaranty, which, it was claimed, subjected it to a personal judgment in the suit of the bank. Slauson agreed to protect it from any judgment against it in that suit. Whether it was bound or not by the guaranty was the very question to be determined in that suit, and Slauson undertook to defend the suit and defeat the claim against plaintiff; or if he could not defeat the action and judgment passed against it, to protect it against such judgment.

It is said that the contract of guaranty was ultra vires, and therefore did not bind the corporation. But the bank in its action was claiming that this contract was not ultra vires; that it bound plaintiff, and was seeking to make it liable in the suit and have judgment against it. Whether Slauson knew or thought the contract bound plaintiff or not does not appear; but it makes no difference whether he thought or knew it did not. He may have acted on the view of the law that it did -not bind plaintiff, 'but this was the very point in judicature, and we see no reason why, if he was clear and positive in his opinion that plaintiff was not bound, that he could not contract as he did. He bore no relation of trust or confidence to the plaintiff which bound him to take care of its interests. He was not its guardian, agent, director, or trustee. The parties dealt at arms length, untrammeled by any confidential or fiduciary relations. The fact that Slauson was, at the time the contract was made, the president of the board of directors of the Los Angeles County Bank, cuts no figure in the matter. His holding that position did not render his contract illegal. The transaction is not claimed or alleged to have been in any way fraudulent, except as to the inducement to the members of plaintiff’s board of directors to sanction the contract with and conveyance to