Leeper v. Beltrami

Decision Date08 December 1959
Citation53 Cal.2d 195,77 A.L.R.2d 803,347 P.2d 12,1 Cal.Rptr. 12
CourtCalifornia Supreme Court
Parties, 347 P.2d 12, 77 A.L.R.2d 803 Abble F. LEEPER et al., Plaintiffs and Appellants, v. William BELTRAMI, Individually and as Executor, etc., et al., Respondents. Sac. 6884.

Abbie F. Leeper and Thomas B. Leeper, in pro. per.

John F. Downey, Malcolm S. Weintraub, Downey, Brand, Seymour & Rohwer, Sacramento, Rodegerdts & Means, Woodland, Chalmers & Sans, Woodland, Driver, Driver & Hunt, Philip F. Driver, Sacramento, Thomas E. Reynolds, Fairfield, Busick & Busick and Charles O. Busick, Jr., Sacramento, for respondents.

PETERS, Justice.

Plaintiffs appeal from a judgment entered after the sustaining of defendants' demurrer without leave to amend. The plaintiffs seek recovery of money paid allegedly under the duress of certain of the defendants. The plaintiffs also seek to recover real property conveyed to another defendant under the same duress. Other defendants, distributees of the estate of one Frank Weber, are joined, but against nearly all of them, the actions have been dismissed by stipulation. The rights of any remaining distributees are dependent upon the rights of the plaintiffs as against the defendants Beltrami and Scarlett.

The allegations of the complaint can be summarized as follows:

In 1937 plaintiff Thomas Leeper borrowed $10,150 from one Frank Weber. Leeper gave a promissory note and also, as security, mortgage on certain ranch property owned by Leeper in Sutter County, and another mortgage on ranch property owned by Leeper in Sacramento County. Thereafter, Leeper served as Weber's attorney. By a separate written agreement the fees earned by Leeper in acting as Weber's attorney were to be applied on the debt. Pursuant to this agreement and the services rendered by Leeper, the debt was fully discharged by the year 1951. Although further services were rendered during the year 1951, by mutual agreement between Weber and Leeper, all debts owing each other were canceled, and no other debts were thereafter contracted.

In the year 1951 plaintiff Abbie Leeper, Thomas Leeper's wife, with one George A. Yeary, 'went upon the bond of one Greene in the sum of $10,000.' The bond was forfeited and the District Attorney demanded payment of the $10,000 by Abbie. The District Attorney threatened to force an execution sale of Abbie's Sacramento home, her separate property (not the same as the mortgaged Sacramento ranch property). In order to facilitate the payment of the bond by his wife without the necessity of sacrificing the home property, and for other reasons, Thomas Leeper deeded both the Sacramento and Sutter ranch properties to Abbie and Yeary, Yeary's only interest being to pay the bond.

By the fall of 1952 judgment was obtained against Abbie on the bond for $10,000 and execution was levied on her home property. An execution sale was threatened.

In the meantime, Frank Weber, Thomas Leeper's former creditor, had died. On or about August 15, 1952, the representatives of his estate, Beltrami and Scarlett, defendants herein, 'falsely plotted to make Leeper and his wife pay said $10,150.00 debt a second time.' They filed an action in the Superior Court of Sacramento County to foreclose the mortgages on the Sacramento and Sutter ranch properties. In connection therewith lis pendens were filed against the properties in both counties. They knew at this time that nothing was due on either the note or the mortgages securing the same.

On October 28, 1952, Abbie and her fellow bondsman found a purchaser for the Sutter ranch property who was willing to pay $18,000, enough to satisfy the bond judgment. The purchaser refused to buy, however, unless Abbie cleared the title of the allegedly false claim pressed by Beltrami and Scarlett. The latter, although they knew the debt had been satisfied, refused to withdraw their claims upon being requested to do so by Abbie.

Because the purchaser would not buy without removal of the cloud on the Sutter property, Abbie was compelled to sell the Sacramento ranch to defendant LaVerne Charles Scheidel for $10,760, a third of the actual worth of that property. The sale is alleged to have been made under compulsion arising out of the extortionary claim of defendants Beltrami and Scarlett, and from fear of Abbie's losing her Sacramento home because of the bond judgment.

Scheidel placed the purchase money ($10,760) with a title company, as did the purchaser of the Sutter property ($18,000). From these deposits the title company paid the bond judgment, the allegedly false claims of Beltrami and Scarlett, and the residue to Abbie.

The instant complaint was filed on November 30, 1956. The complaint prayed for recovery of the money paid to Beltrami and Scarlett; recovery of the proceeds of any of that money which had been distributed to legatees of Weber's estate, joined as defendants; recovery of the Sacramento ranch from Scheidel; and, other remedies by way of rents and profits from that property.

In the meantime, Thomas Leeper on June 16, 1952, was imprisoned in State Prison after conviction for perjury and conspiracy to commit fraud. His sentence was 22 years. He was released on parole on June 16, 1954, or over two years before the complaint in the instant action was filed. The compulsion by Beltrami and Scarlett is alleged to have commenced on August 18, 1952. The transactions involving the deed to Scheidel and the payments made to and by the title company were all completed not later than January, 1953, since in this month the deed to Scheidel was recorded.

It must first be determined whether the complaint states a cause of action against Beltrami and Scarlett or against Scheidel. The cause of action against Beltrami and Scarlett is separate and distinct from that against Scheidel. The conduct of Beltrami and Scarlett violated the right of plaintiffs Abbie and Leeper to be free from acts constituting duress. Scheidel, on the other hand, owed the plaintiffs the obligation not to take advantage of the plaintiffs' situation, a situation created by Beltrami and Scarlett, at least in part. Thus the obligations of both sets of defendants give rise to different causes of action.

The defendants did not demur on the ground that separate causes of action were not separately stated. Therefore, this ground of demurrer was waived. But the nature of the causes of action must be differentiated because the substantive law differs as to the obligations owed by each set of defendants, and because the time limitations differ as to the two causes of action. Before these matters can be discussed, the precise nature of the defendants' wrongs must be considered, and considered separately.

I. Nature of the Defendants' Wrongful Conduct.
A. Beltrami and Scarlett

Against these defendants the complaint attempts to state a cause of action for wrongful acts in the nature of dures which resulted in the payment of an already paid debt by plaintiffs to these defendants as representatives of the estate of Weber, and which collaterally resulted in the transfer of real property from plaintiffs to Scheidel.

Under modern law duress is not limited to threats against the person. It may also consist of threats to business or property interests. Sistrom v. Anderson, 51 Ca.App.2d 213, 220-221, 124 P.2d 372; 5 Williston on Contracts, 4517-4518, § 1617; 40 Cal.L.Rev. 425; Restatement of Contracts, § 493. The modern doctrine has been recognized in California. Young v. Hoagland, 212 Cal. 426, 430-431, 298 P. 996, 75 A.L.R. 654; Thompson Crane & Trucking Co. v. Eyman, 123 Cal.App.2d 904, 910-911, 267 P.2d 1043. It has been held that one who falsely clouds the title to real property and then seeks some consideration to remove the cloud is guilty of a wrongful act and may be compelled to restore the consideration recovered by him. Wake Development Co. v. O'Leary, 118 Cal. App. 131, 4 P.2d 802; Ezmirlian v. Otto, 139 Cal.App. 486, 34 P.2d 774; McNichols v. Nelson Valley Bldg. Co., 97 Cal.App.2d 721, 218 P.2d 789.

Plaintiffs in the instant case have brought themselves within the doctrine enunciated by the cases. It is alleged in the complaint that the defendants wrongfully, with knowledge of the falsity of the claim, attempted to foreclose on a mortgage which had already been satisfied. Beltrami and Scarlett filed a suit to foreclose the mortgage. A lis pendens filed in connection with that suit clouded the title of the property owned by Abbie so that, because of her situation, she was not able to sell the property without paying the allegedly false claim and conveying other property to Scheidel. Thus plaintiffs have alleged sufficient facts to show that the defendants Beltrami and Scarlett were guilty of duress as against the plaintiff Abbie.

Respondents argue that no duress was involved because they were merely seeking to foreclose a mortgage, a legal remedy. It is contended that the taking of legal action or the threat to take such action cannot constitute duress. This is generally true. Hanford Gas & Power Co. v. City of Hanford, 163 Cal. 108, 112, 124 P. 727; Burke v. Gould, 105 Cal. 277, 283, 38 P.733; Sistrom v. Anderson, 51 Cal.App.2d 213, 221, 124 P.2d 372. But the complaint here alleges something more than the threat to take legal action. It alleges that Beltrami and Scarlett, in making such threats, knew the claim asserted was false. This amounts to duress. Restatement of Restitution, § 71; McNichols v. Nelson Valley Bldg. Co., 97 Cal.App.2d 721, 724, 218 P.2d 789.

These respondents also urge that, even if wrongful, their acts were not the proximate cause of plaintiffs' injuries. They correctly point out that some of the circumstances that made the pressing of the claim particularly onerous were not created by them. Thus, the threat of execution of the bond judgment against Abbie's separate home property was the result of Abbie's executing the bond with...

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