Tucker

This is a companion case to American Trust Co. v. California Western States Life Insurance Co., S. F. No. 15797 (ante, p. 42 [ 98 Pac. (2d) 497 ]), this day decided. The factual background and basic legal issues involved in the instant case have been fully reviewed in the opinion in the American Trust Company case, and need not be repeated here. We shall, however, mention briefly two defenses made by defendant herein which were not discussed in the former opinion.

The first is that the contracts under which California-Western was obligated to take back the stock originally issued to the four large stockholders were not in fact repurchase agreements. The theory is advanced that the appellants sold their Western stock for $70 per share; they were paid $40 cash, and were to receive $30 later, as a deferred payment; the California-Western stock was given them in pledge, to secure the deferred payment; and the so-called repurchase by California-Western was merely a redemption of the pledged stock by payment of the debt. The difficulty with this theory is that it is contrary to all the evidence and the findings. The contracts, drafted by able counsel representing experienced business…