McLean v. Ellis

PULLEN, P. J. This action was brought for the recovery of $5,000, less a credit of $1200, which was alleged to have been loaned to appellant and others, by the assignor of respondent.

Appellant claims that respondent’s assignor, Mrs. Jessie Moore, had entered into a joint mining venture with himself and the other named defendants, and that the right to be repaid was controlled by a conditional agreement which had been executed and received by Mrs. Moore.

The court found that Mrs. Moore had loaned the $5,000 to defendants at their request and that she was not bound by the written agreement sent to her by the appellant, Mr. Ellis. The court concluded that she had not entered into any joint mining venture, and judgment was rendered in favor of respondent and against appellant for $3,800, the amount of the balance remaining unpaid.

Mrs. Moore, a resident of the State of Texas, first met Mr. Ellis in Los Angeles in September, 1934. This meeting was [514]a result of correspondence- between Mrs. Moore and her nephew, Mr. Sears, who was interested in a mining venture at Grass Valley with Mr. Ellis and other associates.

It had been previously determined that $5,000 was needed to carry on the mining venture, and Sears told Ellis that the money might possibly be obtained from his aunt, Mrs. Moore. Sears testified that Ellis explained the mining venture to Mrs. Moore at the meeting in Los Angeles, and that Mrs. Moore told Ellis she was not interested. Mrs. Moore testified that at that time Ellis asked her for a loan of $5,000, but she refused. Ellis returned from Los Angeles without any assurance that the money might be obtained. Further correspondence was carried on between Sears and his aunt, and in tiie latter part of October, 1934, Mrs. Moore sent a check for $5,000 to Mr. Sears. At this time Mrs. Moore had not received any note or any other evidence of indebtedness from Mr. Ellis or any of the defendants. Mrs. Moore testified that the cheek for $5,000 was sent to her nephew after having received a letter from him which assured her that it would only be a “short time” loan, and that the money had been sent to him on this assurance.

The $5,000 check was retained by Mr. Sears for some time, and then after a talk with Mr. Ellis, it was turned over to him on November 12, 1934. A discussion took place between Ellis and Sears as to “an agreement” or “legal note” which was to be sent to Mrs. Moore. On November 13, 1934, Ellis wrote a letter to Mrs. Moore in which it was stated that a loan was sought from the government and that the $5,000 would be paid back as soon as the loan went through. The letter stated that a bonus of $1,000 would be paid after they had received their money. The letter also referred to $2,500 bonus, and then spoke of a $5,000 bonus in the event that the government loan failed to go through. Mrs. Moore testified that prior to this letter there had been no discussion of any bonus or government loan and that she had no knowledge of any such arrangement prior to the receiving of this letter from Mr. Ellis. The check for the $5,000 cleared the bank on November 14, 1934.