judgment of the superior court of Alameda county, is, as a matter of law, entirely devoid of any foundation for its support. It is plain to be seen that there could be no inconsistency between the court's findings on the points under consideration and the recitals of the Alameda court's judgment unless the latter could be successfully pleaded and proved in bar of plaintiff's right of action, and, as we have shown, evidence of said judgment and its recitals was not admitted upon that theory.

The court, to briefly recapitulate, correctly held, in its ruling on the motion to strike out, that the Alameda county judgment could not, under the circumstances as disclosed by the answer itself, operate as a bar to plaintiff's right to the relief demanded by the averments of its complaint; but at the trial, with manifest propriety-indeed, in response to the demands of justice and equity-the court received evidence of said judgment so that any excess which might be realized from the sale of the property over the amount necessary to indemnify the plaintiff against loss might be adjudged to belong to the party justly and legally entitled thereto; or, as the court concluded as a matter of law, in case the plaintiff was not compelled to satisfy the judgment rendered by the superior court of Santa Clara county in favor of E. G. Northrup and against the defendant here, the whole sum realized from the sale of the mortgaged property, less the costs, attorneys' fees, etc., should be paid to said defendant.

2. The contention that the failure of the court to make specific findings as to whether the resolution authorizing the board of directors to execute the note and mortgage was adopted at a regular or a legally called special meeting is without substantial merit, as is, likewise, the point that there is no finding that such authorization was made by a majority of the board of directors. It appears from the findings that at the time the note and mortgage were authorized to be made said J. J. Smith and M. F. Fillmore, payees of the note, were members of the board of directors of the defendant, and the proposition that the court did not find that the said instruments were authorized to be made by a majority of the directors proceeds from a somewhat subtle, if not hypercritical, analysis and challenge of that portion of finding No. IV, which reads as follows: “... but at the time and at the

meeting whereby said mortgage was authorized to be executed said J. J. Smith and M. F. Fillmore did not vote or participate in said meeting when the execution of said mortgage was being considered or voted upon, but that the majority of the board of directors then remaining unanimously authorized the execution of said note and mortgage," ete. It is said that the language of said finding which we have italicized is so ambiguous that it fails to clearly disclose that a majority of all the members of the board of directors authorized the mortgage to be executed. The finding, it may be conceded, could have been more clearly phrased, but we think its language is clear enough to indicate that the court therein intended to find, and does thereby find, that a majority of all the board of directors were present and participated in the proceedings culminating in the authorization of the execution of the instruments. In other words, we think the finding must be construed to mean that, with Smith and Fillmore absent, so far as taking any part in the proceedings was concerned, the remaining members of the board transacted the business concerning the note and mortgage. This construction not only gives the finding its evident meaning, but harmonizes with the rule as it has been uniformly followed in California in the construction of findings of fact. In Breeze v. Brooks, 97 Cal. 77, [31 Pac. 744], it is said that "the findings of the court should receive such construction as will uphold rather than defeat the judgment; and when, from the facts found by the court, other facts may be inferred which will support the judgment, such inference will be deemed to have been made by the trial court." And in Warren v. Hopkins, 110 Cal. 506, [42 Pac. 986], the court declares that "any uncertainty in the findings is to be construed so as to support the judgment rather than defeat it." (See, also, Krasky v. Wollpert, 134 Cal. 342, [66 Pac. 309]; Paine v. San Bernardino etc. Co., 143 Cal. 656, [77 Pac. 659]; Gould v. Eaton, 111 Cal. 639, [52 Am. St. Rep. 201, 44 Pac. 319]; People's Home Savings Bank v. Rickard, 139 Cal. 285. [73 Pac. 858].)

It is true that there is no finding which in express language indicates whether the meeting at which this transaction was conducted was a regular meeting of the board or a regularly

called special meeting. But we think the presumption must be indulged that it was a lawful meeting of the board.

3. The point urged by appellant that the resolution authorizing the execution of the note and mortgage, having been pleaded in the answer as one of the defenses against the action to foreclose the mortgage, involves a material issue, upon which a finding should have been made, cannot be sustained.

The necessary effect of the argument upon this point is that the resolution, having specifically designated a particular fund, or money to be derived from a particular source, out of which the note should be paid, its payment out of any other money or by any other means cannot be coerced. This prop

osition is devoid of any solid reason for its maintenance. In the first place, the resolution does not by its terms limit the right to compel the payment of the note to the contingency that there shall be received by the defendant certain moneys from said "Mr. Holmes." It provides as well for a mortgage to be executed upon the property of the defendant as security for the payment of the note. Besides, the note, as must essentially be the fact, is, upon its face, an unconditional promise to pay to the payees the sum set forth therein, and there is no provision in said note that it is to be paid only out of money to be obtained from a particular person or

source.

The plaintiff, so far as the findings disclose, took the note by assignment in the nature of collateral security-that is, for the purpose of indemnifying it against any loss it might sustain through having become the surety for the defendant on the appeal from the judgment obtained against it by Northrup. Assuming that the terms of said resolution could in any event affect the right of plaintiff to maintain this action, there is absolutely nothing in the record from which it may even be remotely inferred that the plaintiff had any knowledge of the contents of the resolution, by which the directors of the defendant authorized themselves to make the note and inortgage. As before declared, the judgment adjudging the whole transaction void and setting it aside could in no manner or degree bind the plaintiff, it not having been made a party to the action in which that judgment was given. It would seem, we may say in this connection, that it was intended that

the plaintiff should know nothing of that action, for the defendant knew that the note and mortgage had been assigned to plaintiff for its (defendant's) benefit prior to the commencement of said action, and yet consented to a judgment declaring the note and mortgage void.

We conclude upon this point that the resolution or its terms did not constitute a material issue in the case, and it follows, of course, that no finding with regard thereto was necessary or required.

4. The contention that the court committed a vital error by not finding that the note had not been paid is untenable.

It is a well-established rule that where a complaint in an action on a promissory note alleges that the party declaring thereupon is the "owner and holder" of the note raises the presumption that such note has not been paid, and that the burden is upon the party defending against the note to prove that it has been paid, if such be his defense. (Griffith v. Lewin, 125 Cal. 620, [58 Pac. 205]; Pastene v. Pardini, 135 Cal. 434, [67 Pac. 681]; Stuart v. Lord, 138 Cal. 672, [72 Pac. 142]; Thompson v. Thompson, 140 Cal. 546, [74 Pac. 21].) The court finds, but denominates it as a conclusion of law, that "plaintiff is the lawful owner and holder of said. note and mortgage," etc. But, although this finding or conclusion is designated by the court as a conclusion of law, it nevertheless involves the finding of a fact, and is sufficient as such to support the judgment in that respect. If the plaintiff is the lawful owner and holder of said note, then certainly the presumption is that it has not been paid. It is moreover to be presumed that if the defendant had introduced proof sufficient to overcome the presumption of the nonpayment of the note the court would have made a finding accordingly. Furthermore if, as a matter of fact, the defendant introduced evidence addressed to the proposition that the note had been paid, it should have brought up such evidence by a bill of exceptions or a statement, and, having failed to do so, the presumption is that, if evidence was offered and received upon the point, such evidence was against it, the burden being upon it to prove the fact or overcome the presumption of nonpay'ment.

5. It is lastly contended that the note and mortgage are void because the payees were directors of the defendant at the

time of the execution of the instruments, Smith being also secretary of the board of directors at said time. In support of this proposition, we are referred to the comparatively recent case of Pacific Vinegar & Pickle Works v. Smith, 145 Cal. 365, [104 Am. St. Rep. 42, 78 Pac. 550]. But an examination of that case will readily disclose that it does not sustain the position of appellant here.

It is there held (we quote from the syllabi which correctly state the propositions as they are treated in the text) that "one who is president and director of a corporation occupies a beneficiary and trust relation thereto; and where he purchased its notes outright, and caused the corporation, by himself as president, to become an indorser thereof to himself individually, guaranteeing the payment of the notes without the authority, knowledge, or approval of the corporation, he cannot maintain an action to enforce the express contracts of indorsement, the making and enforcement of which are equally prohibited by law. Such contracts are a breach of trust, and voidable at the mere election of the corporation, if not absolutely void. . . ." The president of the corporation in that case had done, according to the evidence, the very thing which the foregoing declares cannot be lawfully done in a transaction between himself and the corporation, the relation between the two being essentially fiduciary in its nature. No one could have the temerity to dispute the soundness, justice and equity of the rule as thus laid down. Here, however, the findings show a state of facts which marks a clear line of distinction between that case and the one at bar. As seen, it not only appears that the payees of the note took no part in the execution of the note and the mortgage, or in the proceedings of the board of directors leading thereto, but that the action of the directors in the matter was subsequently ratified by the holders of more than two-thirds of the entire capital stock of the defendant.

In Pacific Vinegar etc. Works v. Smith, supra, Mr. Justice Lorigan, who wrote the opinion, exhaustively examines and reviews a large number of the cases touching upon the proposition under discussion, and with most gratifying perspicuity points out the difference between that class of cases where an officer of the corporation as such deals with himself in his individual capacity concerning the property of the corpora