Union Bank v. Brummell

In Union Bank v. Brummell (1969) 269 Cal.App.2d 836, the defendants originally intended to purchase the property given as security, but the lender "advised or required them" to transfer title to the property to a preexisting corporation solely owned by the defendants. (Id. at p. 838.) The court found the guaranties the defendants executed in connection with the loan were shams, reasoning "the legislative purpose against deficiency judgments may not be subverted by use of a corporation with the true principal obligor relegated to the position of guarantor." (Ibid.)