U.S. Court of Appeals for the Ninth Circuit, 1936

Security-First Nat. Bank of Los Angeles v. Rindge Land & Navigation Co.

U.S. Court of Appeals for the Ninth Circuit · Decided October 19, 1936 · Denman, Garrecht

86 F.2d 3; 107 A.L.R. 1256; 1936 U.S. App. LEXIS 3634 (Federal Reporter, Second Series)

Counsel

0rrick) Palmer & Dahlquist and Garret McEnerney, all of San Francisco, Cal., for appellant Pacific States Savings & Loan Co ', ^ „ . ,, . ,, Newlin & Ashburn, A. W. Ashburn, Gurney E. Newlin, and Clyde E. Holley, all Qf Lqs a el Cal„ for appellant Security pirst Nat Bank of Los Angeles., , . _ _ , , „ John W. Preston and Agnew & Boekel, a^ ^an Francisco, Cal., Rea, Free & Jacka> °f TSan Jose Cal. and Marvin Os-^urn, ^os Angeles, Cal., for appellee RlndSe Land & Navigation Co.

Cases that cite this one

3 later published cases cite this decision.

Taylor v. Merrill (9th Cir. 1939)
James Talcott Construction, Inc. v. P & D Land Enterprises (Mont. 1993)
Security-First Nat. Bank v. Rindge Land & Navigation Co. (9th Cir. 1936)

This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.

Opinion of the Court

DENMAN, Circuit Judge,

The petition for rehearing asserts that jke opjn;on 0f the court in effect finds that j.jle t>Qnc[g were sold by the bondholders’ committee to the Pacific States as a result of fraudulent conspiracy and then ignores its finding in reaching its conclusions. No such inference from the findings is warranted. The dealings between the bondholders’ committee and the Pacific States were free from any obligation, legal or equitable, to the debtor. In the absence of any lawful obligation to the debtor, the purchase of the bonds is not converted into a fraudulent conspiracy because one or all the negotiators had a motive, however unethical in character, which would be satisfied by the fact that the lawful profit, if made, would exhaust the proceeds of the sale of the security given by the debtor corporation and leave nothing for it and its stockholders. It is not incumbent upon the court to assess the justification or lack of it, for the personal resentments between the representatives of the two syndicates after months of hostile negotiation,

Pétition for rehearing denied,

Dissenting Opinion

GARRECHT, Circuit Judge

(dissenting).

The facts as found by the lower court which are supported by the evidence establish collusion and fraud. Further, under *4the circumstances disclosed in this case, appellants were under equitable obligation not to overreach the debtor and unsecured creditors as was done. The decree of the District Court should be affirmed.

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