Shelley v. Board of Trade

262 P. 403, 87 Cal. App. 344, 1927 Cal. App. LEXIS 101
CourtCalifornia Court of Appeal
DecidedDecember 8, 1927
DocketDocket No. 6005.
StatusPublished
Cited by6 cases

This text of 262 P. 403 (Shelley v. Board of Trade) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shelley v. Board of Trade, 262 P. 403, 87 Cal. App. 344, 1927 Cal. App. LEXIS 101 (Cal. Ct. App. 1927).

Opinion

CAMPBELL, J., pro tem.

In February, 1922, the appellant, Joseph Shelley, and his brother, Sam Shelley, were copartners and were engaged in operating “Army Stores” in San Francisco, Fresno, Eureka, Pittsburg, and Stockton, California, and at Reno, Nevada. They owed large sums of money and were in financial difficulties and their creditors were uneasy. Joseph Shelley and his brother, Sam Shelley, feared they would be pressed by their creditors. *346 Accordingly, they conferred with Mr. Elkus, a member of the Board of Trade of San Francisco, about the situation and Mr. Elkus arranged a meeting of the Board of Trade, which was called for February 18, 1922, and at which time Mr. Elkus submitted a signed statement which he obtained from the Shelleys showing their assets and liabilities. At a subsequent meeting of the Board of Trade on February 24, 1922, the committee of investigation having reported, it was agreed that an extension of time be granted for the payment of the Shelleys’ obligation, payments to be made at the rate of $15,000 per month, the Shelleys to execute interest-bearing notes to the creditors, and it was then agreed that the creditors were to stand all the expenses, and on March 8, 1922, the fact that the creditors were to stand the expenses was stated in a letter written by respondent G. W. Brainard, secretary of the Board of Trade, to the creditors, stating: “The expenses of the adjustment are to be borne by creditors.” It was also agreed that all moneys received by the Shelleys in the conduct of their business were to be turned over to the Board of Trade for distribution to the creditors except that fifty per cent of the gross receipts should be used for operating expenses and replenishment of the stocks of merchandise, if necessary. It was subsequently learned by written confessions from the managers of the stores on Mission Street, San Francisco, and at Stockton, which were given to Adjuster Adelstein of the Board of Trade, that Joseph Shelley had not kept faith with the committee of the Board of Trade and had withheld sums probably amounting to several thousand dollars. At the meeting of the Board of Trade on April 10, 1922, this matter was reported and a demand was made of Joseph Shelley and Sam Shelley to effect a transfer of all of their assets for the benefit of the creditors or an attachment would be levied. This being refused an attachment was levied on April 12, 1922, on the San Francisco and Reno stores. Thereafter Sam Shelley, acting for and on behalf of the copartnership, at a meeting of the Board of Trade on April 17, 1922, stated that he had been able to obtain money from one J. Gollober with which to pay the creditors. This was agreeable to the committee, provided all the expenses incurred by the Board of Trade in the administration of the settlement of *347 this matter be paid by the Shelleys. Objection was made by Sam Shelley to standing the expense, but after discussion it was agreed between all parties that the regular Board of Trade charges, amounting to two per cent, should be borne by the creditors, but that all other expenses should be borne by the Shelleys'. Both the Shelley brothers and the creditors proceeded to act upon this agreement and subsequently on April 20, 1922, a full written statement of account owing the creditors and containing the expenses referred to and all other matters (Defendants’ Exhibit 2) was delivered by the Board of Trade to the attorneys representing and acting for the Shelleys and J. Gollober, to whom the Shelleys were to execute a bill of sale in consideration of his paying the outstanding obligations. After the Shelleys had examined the statement and agreed to its contents on April 24, 1922, Mr. Jaffa, one of the attorneys representing and acting for the Shelleys and Mr. Gollober, sent the money advanced by Mr. Gollober to the Board of Trade by letter, statitig that the money was to be distributed to the creditors and for expenses as per statement of April 20, 1922, which included .the items of expense here in dispute. The letter from Attorney Jaffa addressed to the Board of Trade, which was admitted in evidence, is as follows:

“I hand you herewith the sum of thirty-six thousand four hundred seventy 85/100 dollars, to hold in escrow upon the following terms and conditions:
“1. No disposition whatever of said sum shall be made nor shall any steps in this transaction be taken until Tuesday, the 25th day of April, 1922, and then only if no creditors of said Joseph Shelley and Samuel Shelley shall appear and contest the sale from said Joseph Shelley and Samuel Shelley to Julius Gollober. Should said contest be made, the said sum is to be returned to the undersigned.
“2. The attachment in the action in the Second Judicial District Court of Nevada, in and for the County of Washoe, entitled G. W. Brainard v. Joseph Shelley and Samuel Shelley, and numbered therein 18110, and the attachment in the action in the Superior Court of the State of California, in and for the City and County of San Francisco, entitled G. W. Brainard v. Shelley Brothers et al., and numbered therein 124984, and each of them, shall be released *348 and the said actions and each of them shall be dismissed and the said promissory notes upon which the said actions were based shall be marked cancelled and delivered to the said Joseph and Samuel Shelley.
“3. Upon the completion of said acts and each of them, the said sum handed you herewith is to be distributed by you to those creditors listed on your statement of April 19, 1922, and the balance of said sum is to be applied by you in payment of your expenses incurred in connection with the Shelley Brothers as indicated on your statement of April 20, 1922, and you are to furnish said Shelley brothers with receipts in full from the said creditors and each of them. Any balance remaining is to be returned to the undersigned.”

The third condition in the letter is that “said sum handed you herewith is to be distributed by you to those creditors listed on your statement of April 19, 1922, and the balance of said sum is to be applied by you in payment of your expenses incurred in connection ‘with the Shelley Brothers as indicated in your statement of April 20, 1922, and you are to furnish said Shelley brothers with receipts in full from said creditors and each of them. Any balance is to be returned to the undersigned.” Subsequently all of the material conditions set forth in the letter were complied with by the Board of Trade.

This action was brought to recover the sums listed in the statement of April 20, 1922, as costs, it being alleged that $2,977.38 in excess of the amount distributed to the creditors was paid by the Board of Trade. Judgment went for defendants, and from this judgment plaintiff has appealed.

Appellant urges the following points on this appeal: 1. The agreement made by Sam Shelley on April 17, 1922, was void because based on past and gratuitous consideration; 2. Findings were made outside the issues; 3. Findings were made which are contradictory or inconsistent; 4. Failure of the court to find on material issues; 5. Findings do not support the judgment; and 6. The evidence does not support the findings.

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Bluebook (online)
262 P. 403, 87 Cal. App. 344, 1927 Cal. App. LEXIS 101, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shelley-v-board-of-trade-calctapp-1927.