Opinion ID: 2615306
Heading Depth: 1
Heading Rank: 2

Heading: time limitation problems

Text: The complaint alleges that the conspiracy by which Beltrami and Scarlett plotted to collect the obligation owing Weber a second time was initiated on August 18, 1952. The complaint also alleges that the deed to Scheidel was recorded in January, 1953. Thus it appears that all the transactions involved, i.e., the payment of all funds to the title company, the delivery of the deed to Scheidel, the payment of moneys by the title company to Beltrami and Scarlett, took place no later than January, 1953. The complaint in this action was filed November 30, 1956, or over three years from the consummation of all the transactions. The effect of this delay must be considered separately as to (1) Beltrami and Scarlett, and (2) Scheidel.
From the prayer of the complaint and the facts alleging the nature of the wrongdoing of Beltrami and Scarlett, it is clear that all that the plaintiffs are seeking against these defendants is a sum of money, viz., the $10,150 plus interest allegedly collected a second time from plaintiffs by the defendants. The theory of recovery is not clear. But whether it be considered a suit for restitution to recover money paid under duress (Rest., Restitution, §§ 70, 71, supra ), or an action for money had and received sounding in tort (see Woodham v. Allen, 130 Cal. 194, 198 [62 P. 398]), or, simply an action for money damages for the tortious conduct of the defendants resulting in injury to the plaintiffs, the basic nature of the wrongdoing of these defendants is duress. [16a] It must be determined, therefore, what statute of limitation applies when the prayer for recovery is based on a defendant's duress. There is little authority on this point. The Code of Civil Procedure does not specifically provide for such an action, but it would seem that section 338 is applicable. Subdivision four of that section states that within three years must be brought: An action for relief on the ground of fraud or mistake. The cause of action in such case not to be deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake. Duress, as already pointed out in another connection is a species of fraud. It also should be held that duress is fraud for purposes of the statute of limitations. This is the conclusion reached by a federal court applying California law. ( Tidwell v. Richman (D.C., S.D., Calif. 1953), 127 F. Supp. 526, 534.) [17] The two types of wrongdoing, duress and fraud, are often factually closely interconnected and indistinguishable. (See e.g., Sears v. Rule, 27 Cal.2d 131 [163 P.2d 443].) A person who presses an unfounded claim to obtain money from an innocent party, who finds he must pay because of the circumstances in which he finds himself, is certainly guilty of fraudulent conduct. The entire conduct reeks of fraud. The very pressing of a false claim with knowledge of its falsity constitutes a misrepresentation, which is the backbone of what we know as ordinary fraud. [16b] For these reasons, it must be held that subdivision four of section 338 is applicable where the gravamen of plaintiff's action is duress. Since the injury to plaintiffs from the acts of Beltrami and Scarlett arose more than three years before the filing of the complaint, the action must fail as to Beltrami and Scarlett, unless the plaintiffs can bring themselves within some exemption so as to have tolled the statute of limitations. No such exception is alleged. [18] Plaintiff Thomas Leeper contends that as to him the statute of limitations was tolled and that the filing of the complaint with regard to himself was therefore timely. He relies on section 352 of the Code of Civil Procedure, which reads: If a person entitled to bring an action, mentioned in chapter three of this title [including § 338], be, at the time the cause of action accrued, either: 1. Within the age of majority; or, 2. Insane; or, 3. Imprisoned on a criminal charge, or in execution under the sentence of a criminal Court for a term less than for life; ...  The time of such disability is not a part of the time limited for the commencement of the action. (Emphasis added.) The complaint alleges that the plot on the part of Beltrami and Scarlett commenced August 15, 1952, and was consummated sometime during or before January, 1953. The amended complaint shows that the plaintiff Thomas Leeper was convicted of a felony [perjury and conspiracy to defraud], sentenced for a term of 22 years, and was confined in prison commencing June 16, 1952. Thus, all the wrongful acts of the defendants are alleged to have taken place after Thomas Leeper was in state prison. It is apparent that the cause of action, if any, must have accrued during Leeper's incarceration. Leeper was released on parole on June 16, 1954. Nothing appears in the record as to whether he was then restored to his civil rights, but that is the earliest date the cause of action in his favor accrued. The complaint was filed on November 30, 1956, or less than three years after plaintiff Leeper's release. Thus, as regards the plaintiff Thomas Leeper, section 352 tolls the statute as against Beltrami and Scarlett, because the effect of section 352 is to delay the commencement of the running of the statute until the disabilities therein mentioned have ceased. [19a] Does the fact that the statute was tolled as to Thomas Leeper help Abbie or only Thomas Leeper? If the cause of action were a joint one, the statute would be tolled as to both. If an action not severable is not barred as to one of the parties on account of his infancy at the time the cause of action arose, it is not barred as to either of the other parties. (2 Wood on Limitations (4th ed. 1916) 1079.) The right of Abbie and Thomas to maintain their actions was not joint. [20] Normally parties are not joint obligees unless they have entered a contract together which operates so as to give them a joint right of action (see e.g., Greenfield v. Sudden Lumber Co., 18 Cal. App.2d 709, 719-720 [54 P.2d 1007]; 2 Witkin, California Procedure, 1054, § 77; 37 Cal. Jur.2d 338, § 19), or, unless a defendant or defendants have injured a property interest owned by plaintiffs in some form of joint ownership. (Clark, Code Pleading, (2d ed. 1947) 350.) [19b] Plaintiffs Abbie and Thomas Leeper do not base their action on a joint obligation owed them under a contract. The contractual debt allegedly satisfied and pressed for a second time by Beltrami and Scarlett was that of Thomas alone. Further the property interest of Thomas and Abbie was not joint. It is alleged that Thomas conveyed property to Abbie which was sold to satisfy the unfounded claim: No joint interest was created thereby. The complaint also alleges that Abbie has reconveyed to herself and Thomas as joint tenants any interest which she has in the Scheidel property. This conveyance was after the facts giving rise to any right in either plaintiff and is not sufficient to render the cause of action of either plaintiff a joint one. Thus, there is no authority for holding that the statute of limitations is tolled as to Abbie's right of action merely because it was tolled as to Thomas. Since the statute was tolled as to Thomas Leeper but not as to Abbie it must be determined whether a cause of action accrued as to Thomas Leeper while he was in jail against Beltrami and Scarlett. The complaint alleges that Abbie had gone upon the bond of one Greene, along with another bondsman, one Yeary. The bond was forfeited, and judgment was ultimately entered against Abbie and Yeary. Abbie was in fear of losing her Sacramento home property (her separate property) through an execution and sale pursuant to said judgment. To prevent this from happening, Thomas conveyed both the Sacramento and Sutter ranch properties to Abbie and Yeary. It is alleged that [O]ne of the purposes of said deed to said ranches was to enable said bondsmen to pay off said $10,000.00 Greene bond, and the judgment obtained thereon. By the amended complaint, plaintiffs have alleged a further purpose or consideration for the conveyances: [A] further consideration for Leeper conveying said property to his wife was that any property not needed by her to satisfy the $10,000 judgment on the Greene bond, ... should be held by her and used for the joint support of Leeper and his wife after Leeper's discharge from prison; ... It is seen from the facts surrounding the conveyance of the Sacramento and Sutter ranch properties from Thomas to Abbie, that Abbie as between herself as grantee and Thomas as grantor did not have an unrestricted title to the property. Her authority with regard to the property was limited to selling it in order to satisfy the outstanding bond judgment against her, and to retaining the proceeds from such a sale for the joint support of herself and Thomas after the latter's release from jail. The debt that Beltrami and Scarlett were trying to collect a second time was that of Thomas. Abbie was not authorized under the conveyance from Thomas to use the proceeds of the sale to pay Thomas's debt. She was forced to pay the debt a second time because of the duress exercised by Beltrami and Scarlett. The latter accepted payment from the title company in full satisfaction of Thomas's debt. Abbie, in her dealings with Beltrami and Scarlett, must have been acting as Thomas's agent. [21] Where a third party exercises fraud or duress in obtaining payment from an agent, the principal has a cause of action against the wrongdoer. (2 Mechem on Agency (2d ed.) 1661, § 2089; Rest., Agency 2d, § 315, § 100, comment c.; Gammon v. Ealey & Thompson, 97 Cal. App. 452, 462 [275 P. 1005].) Under this rule since Beltrami and Scarlett coerced Abbie not only to act as agent of the plaintiff Thomas, but also to pay the debt of Thomas a second time, the principal Thomas had a right to recover the money if Thomas would have had a right had the coercion been exercised directly against him. [22] Plaintiff Thomas therefore had a cause of action accruing in his favor as of the time of the wrongful acts of Beltrami and Scarlett directed toward his wife. The cause of action accrued at the time Thomas was imprisoned. The statute of limitations did not commence to run at least until he was released. The complaint was timely filed as to Thomas against Beltrami and Scarlett. Therefore, the sustaining of the general demurrer as to Thomas was improper and in this regard the trial court must be reversed.
The facts relating to time as respect Beltrami and Scarlett are the same as to defendant Scheidel. The transaction which plaintiffs claim gives them a right of action against Scheidel was consummated not later than January, 1953. But the nature of the relief sought against Scheidel varies from that sought against Beltrami and Scarlett. Plaintiffs seek to have an executed deed, that is, the conveyance of certain property from plaintiff Abbie to defendant Scheidel, set aside or cancelled; they seek to have their title quieted to the property involved as against Scheidel, and to have a reconveyance of said property from Scheidel to themselves. The deed which the plaintiffs are attacking arose out of what appears to have been a contract between Abbie and Scheidel whereby Abbie conveyed the land to Scheidel for a consideration of $10,000 paid over by Scheidel to Abbie. Plaintiffs claim that this contract and the conveyance which grew out of it are not now binding because of the acts of duress of Beltrami and Scarlett of which the grantee Scheidel is alleged to have had knowledge. It has already been concluded that the allegations in this respect are sufficient. But, the problem remains as to whether or not the plaintiffs are precluded by their delay from the relief which they seek. Over three years passed from the conveyance of land to Scheidel until the filing of the complaint in this action, and over two years elapsed from plaintiff Thomas's release from jail until the filing of the complaint. [23] If the action be considered one for rescission the plaintiffs are barred by reason of their delay. Rescission, whether legal or equitable, will not be permitted unless the plaintiff acts promptly in rescinding. ( Estrada v. Alvarez, 38 Cal.2d 386, 390 [240 P.2d 278]; Civ. Code, § 1691; Toby v. Oregon Pac. R.R. Co., 98 Cal. 490, 499 [33 P. 550]; 9 Cal.Jur.2d 570, et seq.) [24] The complaint here shows on its face a two-year delay as to one plaintiff and a three-year delay as to the other, before plaintiffs attempted to rescind. Such a delay, unexplained, precludes relief. ( Victor Oil Co. v. Drum, 184 Cal. 226, 243 [193 P. 243].) [25] The failure to act promptly results in a waiver of the right to rescind. ( Pearson Candy Co. v. Waits, 27 Cal.2d 615, 620 [165 P.2d 674]; Neet v. Holmes, 25 Cal.2d 447, 458 [154 P.2d 854].) [26] Where, as here, no explanation is given in the complaint for a substantial delay after knowledge of the facts giving rise to the right to rescind, the complaint is demurrable. ( Bancroft v. Woodward, 183 Cal. 99, 109 [190 P. 445]; Gedstad v. Ellichman, 124 Cal. App.2d 831, 834 [269 P.2d 661]; Clanton v. Clanton, 52 Cal. App.2d 550, 555 [126 P.2d 639]; Williams v. Smith, 127 Cal. App.2d 607, 612 [274 P.2d 204]; King v. Los Angeles County Fair Assn., 70 Cal. App.2d 592, 596 [161 P.2d 468].) Plaintiffs, in an attempt to escape the rule of these cases, contend that this action is not for rescission, but one for the recovery of real property, and that the applicable code section is section 318 of the Code of Civil Procedure providing a five-year period for the bringing of an action to recover real property or its possession. [27] If the action is one essentially to recover the real property, the five-year section applies. ( Murphy v. Crowley, 140 Cal. 141 [73 P. 820]; Goodnow v. Parker, 112 Cal. 437 [44 P. 738]; Oakland v. Carpentier, 13 Cal. 540; Campbell v. Genshlea, 180 Cal. 213 [180 P. 336]; see also South Tule etc. Ditch Co. v. King, 144 Cal. 450, 455 [77 P. 1032]; Brazil v. Silva, 181 Cal. 490, 498-500 [185 P. 174]; People v. Kings County Development Co., 177 Cal. 529, 534-536 [171 P. 102]; Cox v. Schnerr, 172 Cal. 371 [156 P. 509] (dictum); Pierce v. Freitas, 131 Cal. App.2d 65 [280 P.2d 67] (dictum); Earl v. Lofquist, 135 Cal. App. 373, 379 [27 P.2d 416].) The authorities on this subject are in confusion. Thus, it has been held that where the action is to cancel a deed, even though the ultimate aim of the action is to recover real property, section 343 of the Code of Civil Procedure is applicable. That is the section providing for a four-year time limit as a catchall for actions not previously specifically covered. ( Wade v. Busby, 66 Cal. App.2d 700, 702 [152 P.2d 754]; Zakaessian v. Zakaessian, 70 Cal. App.2d 721 [161 P.2d 677].) It has also been held that where the gravamen of the action is fraud, the three-year provision of section 338, subdivision 4, applies, even if the relief prayed for is cancellation and the recovery of real property. ( Turner v. Milstein, 103 Cal. App.2d 651 [230 P.2d 25]; Hart v. Walton, 9 Cal. App. 502 [99 P. 719]; Lightner Mining Co. v. Lane, 161 Cal. 689, 702 [120 P. 771, Ann.Cas. 1913C 1093]; Unkel v. Robinson, 163 Cal. 648 [126 P. 485]; Douglas v. Douglas, 103 Cal. App.2d 29 [228 P.2d 603].) It is apparent that, where a plaintiff brings an action to recover real property either by a quiet title action or by a suit to cancel or set aside a deed, and his success depends upon the ability to show that defendant was guilty of fraud or duress, there is considerable confusion in the cases as to which limitation statute applies. At least three different statutes have been held applicable  section 318, the section fixing a five-year period for the recovery of real property; section 343, the section providing a four-year period for actions not otherwise covered; and section 338, subdivision (4), the section providing for a three-year period after discovery for fraud actions. It has also been held that the promptness requirement applicable to rescission actions applies. This confusion apparently arises out of the failure of the cases to consider adequately the basic rights of the plaintiff arising out of defendant's wrongful conduct, and the failure to consider the substantive rules applicable to these basic rights. In the instant case the relief sought is to have the deed to Scheidel rescinded, plaintiffs' title quieted, and Scheidel compelled to execute a new deed to plaintiffs. Thus the question is whether, because the ultimate relief sought is recovery of real property, the five-year provisions of section 318 are automatically applicable, or should the plaintiffs be held to the ordinary rules applicable to rescission? There are many cases holding that quiet title actions are of an independent nature completely divorced from the facts that give rise to the plaintiff's right to have his title quieted. Thus it has been held that a complaint couched in general terms alleging plaintiff's ownership and defendant's assertion of an adverse claim is not demurrable. ( Jose Realty Co. v. Pavlicevich, 164 Cal. 613 [130 P. 15]; Moore v. Copp, 119 Cal. 429 [51 P. 630]; Brooks v. Johnson, 122 Cal. 569 [55 P. 423]; White v. Stevenson, 144 Cal. 104 [77 P. 828]; Wendling etc. Co. v. Glenwood etc. Co., 153 Cal. 411 [95 P. 1029]; Taliaferro v. Crola, 152 Cal. App.2d 448 [313 P.2d 136].) It has also been held that if a complaint is in two counts, one in general terms for quiet title, and the other specifying the defendant's wrongdoing which is the basis of the quiet title action, the complaint is not demurrable even though the specific count is faulty. ( California-Michigan L. & W. Co. v. Fletcher, 206 Cal. 392, 394 [274 P. 527]; Aalwyn v. Cobe, 168 Cal. 165, 167 [142 P. 79].) These cases seem to hold that suits to recover real property, where the relief sought is quiet title, must be viewed independently from the grounds upon which the relief is sought, and that the five-year statute is applicable. On the other hand, the more modern rule places more emphasis on the basic rights involved. Thus it has been held that, where the complaint is in two counts, one to quiet title, and one to cancel a deed, if the count to quiet title depends upon the cancellation count, the complaint must stand or fall on the cancellation count. ( Ephraim v. Metropolitan Trust Co., 28 Cal.2d 824, 833 [172 P.2d 501].) And there are many cases holding that, where the legal title is in the defendant, and the plaintiff seeks to quiet title on the ground defendant's title was secured from plaintiff by fraud, the plaintiff must plead and prove facts constituting the fraud. ( Burris v. Adams, 96 Cal. 664, 667 [31 P. 565]; Burris v. Kennedy, 108 Cal. 331 [41 P. 458]; Virginia etc. Co. v. Glenwood Lumber Co., 5 Cal. App. 256 [90 P. 48]; Estate of Yoell, 164 Cal. 540, 546 [129 P. 999].) It has been held that this rule requiring allegations of fraud in such actions is an exception to the general rule that a cause of action to quiet title may be stated in general terms. ( Thompson v. Moore, 8 Cal.2d 367, 372 [65 P.2d 800, 109 A.L.R. 1027]; Kroeker v. Hurlbert, 38 Cal. App.2d 261, 265 [101 P.2d 101]; Moss Estate Co. v. Adler, 41 Cal.2d 581, 584 [261 P.2d 732]; Borneman v. Salinas Title Guar. Co., 66 Cal. App.2d 500 [152 P.2d 649].) Thus the modern tendency is to look beyond the relief sought, and to view the matter from the basic cause of action giving rise to the plaintiff's right to relief. This approach is a sensible one. [28] In the instant case plaintiff Abbie and defendant Scheidel entered into a contract for the sale of land. Abbie's basic right is to rescind based on Scheidel's fraud. Normally a party is required to rescind promptly after knowledge. The complaint shows on its face that plaintiff did not rescind promptly after knowledge. Thus the realistic approach is to hold that the complaint is demurrable regardless of the form in which the prayer for relief is couched. [29] The matter can be stated very simply. Plaintiffs' right to quiet title depends on their right to get out of the contract of conveyance. That right depends upon whether, at the time of filing the complaint, the plaintiffs had a right to rescind. Such right requires prompt action after knowledge. The complaint shows a long unexcused delay after plaintiffs knew of the wrongful actions of defendant. Ergo, the complaint should be demurrable. This approach is not unknown to California law. In Burris v. Kennedy, 108 Cal. 331 [41 P. 458], the court posed the following hypothetical problem: A desires to defraud B by inducing him to sell to A his land for half its value. He employs C to assist in deceiving and defrauding B, and for such services promises him one thousand dollars, and gives his note for that amount. The fraud having been consummated, the court will not aid C in the collection of his note, but will hold it void. But B cannot assume that his deed is void and sue A in ejectment to recover the land; he must rescind, and bring his action alleging the acts of fraud. (108 Cal. at p. 342, emphasis added.) The court went on to hold that the fact that the defendant pleaded the instrument under which the defendant claimed did not aid the plaintiff, since such pleading did not reveal that the plaintiff relied on the fact that the instrument was obtained by fraud: But in no event would the answer change the theory of plaintiff's action, or constitute notice that he relied upon fraud. He would have been compelled in this case not only to set up the fraud but to seek a rescission of the fraudulent sale. (108 Cal. at p. 344; see also Kroeker v. Hurlbert, 38 Cal. App.2d 261, 265-266 [101 P.2d 101].) [30] The same rule is applicable if the action be considered as one for cancellation of a deed. If the right asserted depends upon the right to rescind, the plaintiff must act promptly or he is barred. ( Barkley v. Hibernia Sav. etc. Soc., 21 Cal. App. 456, 458 [132 P. 467]; see also Cross v. Mayo, 167 Cal. 594, 602 [140 P. 283]; Clanton v. Clanton, 52 Cal. App.2d 550, 556 [126 P.2d 639]; Meyer v. Haas, 126 Cal. App. 560, 563 [58 P. 1042]; O'Meara v. Haiden, 204 Cal. 354, 363 [268 P. 334, 60 A.L.R. 1381].) [31] There is one case decided by this court that is contrary to the above cases. That case is Thompson v. Moore, 8 Cal.2d 367 [65 P.2d 800, 109 A.L.R. 1027]. There plaintiffs, owners of property in San Francisco, and defendants, owners of property in Yolo County, were negotiating an exchange. Defendants misrepresented the value of the Yolo County property. Plaintiffs, as part of the exchange, gave defendants a note secured by a trust deed on the Yolo property. Upon discovering the fraud, plaintiffs brought an action to quiet their title to the Yolo County property and to cancel the trust deed. The court held that the complaint, although framed in two counts, stated but one cause of action, and that was an action to quiet title. The court (p. 371) specifically held that the action was not one to rescind. The case has been criticized (see annotation 109 A.L.R. 1032) on somewhat technical but persuasive grounds. The case is also subject to a nontechnical objection. Plaintiffs' right to quiet their title depended upon a successful attack on the trust deed by a showing that defendants were guilty of fraud in its procurement. Thus the court was not realistic when it held that the cause of action to cancel the deed was merely incidental to the quiet title action. The court should have held that the quiet title action was incidental to the action to cancel the deed. It is apparent that the quiet title suit was completely dependent upon plaintiffs' success in attacking the trust deed. The court in the Thompson case was undoubtedly correct in holding that facts alleged in a complaint authorizing relief both to quiet title and to cancel an instrument state but one cause of action. That is undoubtedly the law. (See Parsons v. Weis, 144 Cal. 410, 414 [77 P. 1007]; Beronio v. Ventura County Lumber Co., 129 Cal. 232, 235 [61 P. 958, 79 Am.St.Rep. 118]; California Trust Co. v. Cohn, 214 Cal. 619, 628 [7 P.2d 297]; Wood v. Roach, 125 Cal. App. 631, 640 [14 P.2d 170].) But this does not mean that the cause of action is necessarily one to quiet title. Quieting title is the relief granted once a court determines that title belongs in plaintiff. In determining that question, where a contract exists between the parties, the court must first find something wrong with that contract. In other words, in such a case, the plaintiff must show he has a substantive right to relief before he can be granted any relief at all. Plaintiff must show a right to rescind before he can be granted the right to quiet his title. The Thompson case permits a plaintiff who has executed a contract to secure relief by simply couching his cause of action in terms of quiet title, and thus permits him to avoid and evade the normal requirements of a cause of action to avoid that contract. This is pure formalism and should not be countenanced. The case is disapproved. [32] The requirement that one entitled to rescission must act promptly is a salutary rule. ( Hammond v. Wallace, 85 Cal. 522, 531 [24 P. 837, 20 Am.St.Rep. 239]; Oppenheimer v. Clunie, 142 Cal. 313, 320 [75 P. 899].) For the foregoing reasons, it is concluded that plaintiffs' action as to Scheidel must fail since plaintiffs have not stated any facts to excuse their delay in seeking rescission of the contract under which Scheidel acquired the title plaintiffs seek to have set aside. [33] In the absence of some statement on the issue it must be presumed that no facts excusing the delay exist. ( Williams v. Smith, 127 Cal. App.2d 607, 612 [274 P.2d 204].) The judgment is affirmed as to Scheidel. The judgment is affirmed against Abbie Leeper and in favor of Beltrami and Scarlett. The judgment in favor of the residuary legatees against Abbie Leeper is affirmed, but such judgment in favor of such legatees as against Thomas Leeper is reversed. The judgment against Thomas Leeper and in favor of Beltrami and Scarlett is reversed, except as such judgment includes a cause of action assigned to Thomas Leeper by Abbie Leeper which is affirmed because barred by the statute of limitations. Justice requires that all parties should bear their own costs on this appeal. It is so ordered.