Opinion ID: 2615306
Heading Depth: 2
Heading Rank: 2

Heading: Scheidel.

Text: It is alleged in the complaint that plaintiff Abbie was compelled to convey the Sacramento ranch property for a third of its actual market value to defendant Scheidel. The conveyance is alleged to have been made as a result of the extortionary claim of Beltrami and Scarlett and from fear that Abbie would lose her Sacramento home property. Scheidel is alleged to have had knowledge of the duress which was being exercised by Beltrami and Scarlett. Plaintiffs seek to have the conveyance of the Sacramento ranch property to Scheidel set aside, and the property restored to plaintiffs. Does this allege a good cause of action against Scheidel? It is to be noted that no active wrongdoing has been alleged against this defendant. The actual duress was that of Beltrami and Scarlett. Scheidel, however, is alleged to have had knowledge of the situation in which Abbie found herself. Thus, the question is whether the wrongful acts of a third party constituting duress may be sufficient to allow rescission of a contract with a party, who, although not participating in those wrongful acts, had knowledge of the innocent party's position. [13] The Restatement of Contracts gives an affirmative answer to this question. Section 496 states that the duress of a third party renders a transaction voidable by a party induced thereby to enter into it under the same circumstances as the rule stated in section 477 relating to fraud. Section 477 reads: Fraud or material misrepresentation [or duress] by a third person renders a transaction voidable by a party induced thereby to enter into it if the other party thereto (a) has reason to know of the fraud or misrepresentation [or duress] before he has given or promised in good faith something of value in the transaction or changed his position materially by reason of the transaction, ... (See also 62 A.L.R. 1477, 1478; 4 A.L.R. 864; Bumgardner v. Corey, 124 W. Va. 373 [21 S.E.2d 360, 364]; Wells Fargo Nevada Nat. Bank v. Barnett, 298 F. 689, 691; McDonald v. Pend Oreille Mines & Metals Co., 189 Wash. 389 [65 P.2d 1250, 1257].) This is also the rule in California. ( Harper v. Murray, 184 Cal. 290, 294 [193 P. 576]; Carroll v. Carroll, 16 Cal.2d 761, 770-771 [108 P.2d 420].) [14] Under the rule of these cases the allegations that Scheidel had knowledge of Abbie's predicament are sufficient to give rise to the right of rescission. Scheidel had no legal right to take advantage, knowingly, of the wrongdoing of third parties. When he did, he connived with the wrongdoers as that term is used in the statute relating to rescission. (Civ. Code, § 1689.) [15] The very fact that the conveyance was for an allegedly inadequate consideration, under the cases, is of some importance in determining whether or not it was made under duress. ( Pipes v. Webb, ___ Miss. ___ [111 So.2d 641, 643].) For the foregoing reasons, it must be held that the complaint, so far as the substantive law is concerned, states a cause of action against the three defendants. This brings us to the real question presented and that is whether the statute of limitations is applicable to any of the causes of action stated.