Masoni v. Board of Trade of San Francisco
| Decision Date | 17 August 1953 |
| Citation | 119 Cal.App.2d 738,260 P.2d 205 |
| Court | California Court of Appeals Court of Appeals |
| Parties | MASONI et al. v. BOARD OF TRADE OF SAN FRANCISCO et al. Civ. 15466. |
Courtney L. Moore, San Francisco, for appellants.
James M. Conners, Norman A. Eisner, Haskell Titchell, San Francisco, for respondents.
This is an action for damages for unjustifiable interference with business relations. After a general demurrer to the complaint had been sustained plaintiffs refused to amend. They appeal from the adverse judgment entered accordingly.
The complaint alleges in substance: Plaintiffs are partners in a bar and restaurant business. About October 1, 1951, their partnership was in financial difficulties, owing approximately $17,000 to sixty-five creditors for supplies and merchandise needed for its business, and plaintiffs were trying to obtain from said creditors settlements for less than full payment or extension of time. However, Masoni, one of the partners, had ample individual means with which to pay the claims in full.
Defendants are the Board of Trade of San Francisco, hereinafter called the Board, and some of its officers, employees and attorneys. The Board has for many years engaged in the following conduct: When the Board became aware that somebody was indebted to various creditors it invited said creditors to meet with the Board at its offices and caused those that came to elect a creditors' committee, and said creditors' committee to adopt a resultion authorizing the Board to solicit from all creditors assignments of their claims to an agent of the Board, granting said assignee the right to bring action for collection of said claims, for which collection a fee was charged to the creditors.
Defendants conspired to follow the described line of conduct as to plaintiffs and their creditors and to prevent plaintiffs from settling with any of said creditors for a lesser amount than that owed or to obtain extension of time for payment. In carrying on such conspiracy the Board obtained assignments of six creditors' claims, two to defendant Drinnen, four to defendant Ryan; these assignees filed actions in the superior court through defendants Conners and Doran as their attorneys, and through them attached the bank account of plaintiff Masoni and placed a keeper in the place of business of the partnership. In a conference between plaintiffs and the defendants Hempy and Conners as to the settlement of claims defendant Hempy informed plaintiffs that the Board would not permit Masoni to deal with individual creditors directly for the purpose of settlement, but demanded payment of all claims in full plus 8% for collection fees of the Board. The Board informed plaintiffs' creditors in a circular letter that the creditors' committee had rejected a compromise because the assets of the partnership and of Masoni individually were sufficient to warrant full payment and asked creditors who wished to support the committee to execute assignments. When thereafter Masoni visited creditors to discuss a compromise they refused discussion because they had assigned their claims in response to the above circular letter. Claims of thirty-eight creditors were so assigned, a part to each of the defendants Frey, McPherson and Meyer. These assignees also filed actions through the defendants Conners and Doran, one in the superior court and two in the municipal court, and had attachments issued and a keeper placed in the plaintiffs' place of business with instructions to impound all its receipts. Defendants further threatened plaintiffs that if they did not pay, defendants would instruct the sheriff to remove plaintiffs' stock in trade and inventory to the sheriff's warehouse. Compelled by these measures and threats plaintiffs paid some of the claims sued for with costs and sheriff's fees and deposited a cash understanding as to the others.
The conduct of defendants was illegal because none of them except the attorneys Conners and Doran was qualified under Division 3, Chapter 8 of the Business and Professions Code to conduct the alleged collection activities, not having applied for or obtained a license as required by section 6870 of said code except for persons like attorneys at law exempted by section 6854, sub. (a), whereas section 6871 makes punishable as a misdemeanor the carrying on of such collection activities without a required license, and said conduct constituted illegal interference with the business relationship existing between the plaintiffs and their creditors and with plaintiffs' right to negotiate new contracts of compromise. Without said interference plaintiffs would have been able to reach compromises with some creditors for less than full payment. Moreover the levying was excessive. As actual damages plaintiffs claim amounts for reduction of claims not obtained, costs illegally caused and curtailment of sales by the presence of a keeper. In a separate count exemplary damages are claimed because of the malicious and oppressive character of the acts complained of.
The trial court in a letter to counsel of both sides, made part of the record, explained that it had sustained the demurrer with leave to amend because it was quite possible that plaintiffs could state a cause of action for wrongful attachment. However in their opening brief appellants expressly state that no such action was intended or presently possible and that the gist of the action instituted was actionable interference by strangers with the business relationship of plaintiffs and their creditors motivated by a desire of gain (collection fees) and unlawful because prohibited and punishable under the code. We shall therefore in accordance with the position of appellants consider the complaint as if the measures taken for the collection of the amounts for which action was brought would not have been illegal if taken by the original creditors themselves but the alleged illegal character of the conduct of defendants was solely based on their interference as strangers, considering also their lack of licenses and their motive.
'Intentional and unjustifiable interference with...
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