CROW v. MADSEN et al.
This is an appeal from a judgment entered after a demurrer to the amended complaint had been sustained without leave to amend.
The demurrer was general and also special on various grounds of uncertainty. As only four grounds are argued here we will consider the others abandoned and will pay no attention to them.
The grounds which we must consider are (1) laches of the plaintiff; (2) that the complaint fails to state a cause of action because in attacking two decrees in probate plaintiff alleges only intrinsic fraud and not the extrinsic fraud necessary to maintain her action; (3) that the complaint fails to allege that plaintiff had any interest in the property in question at the time of the decree of distribution under which defendants claim; (4) that plaintiff's action is barred by the provisions of subdivisions 3 and 4 of section 338 of the Code of Civil Procedure.
While the transcript does not give the date of filing the original complaint, counsel for defendants state that it was filed on May 17, 1939. The amended complaint was filed on October 17, 1939.
It is alleged that Hanne Madsen died testate on November 10, 1936; that on January 8, 1937, her will was admitted to probate and Martin C. Madsen appointed executor. A copy of the will is attached to the pleading. Helen Madsen, since married and now Helen Crow, the widow of a deceased foster son of Hanne Madsen, was bequeathed $3,100, and the balance of her estate was bequeathed to Martin C. Madsen, son of deceased. The will was executed on April 27, 1936.
It is further alleged that on April 6, 1937, the executor returned and filed a purported inventory of the estate of Hanne Madsen, in which it was stated that “no property or estate of the above named decedent has come into the possession or knowledge of the executor”; that on January 17, 1938, the executor returned and filed a purported final account and report as executor, and petition for discharge, in which he again stated “that no money or property of any kind came into the hands of your petitioner as such executor”.
It is further alleged that Martin C. Madsen wrongfully, and with the intent to convert the property of Hanne Madsen to his own use, did not report, inventory, nor account for real and personal property which was and is the property of the estate of the deceased; (follows descriptions of four parcels of real property and seven groups of personal property); that he is claiming the property as his own by virtue of a deed and assignment from Hanne Madsen to himself, dated March 26, 1936, and recorded on the same day; that he filed the purported deed and assignment in the estate of Hans Madsen, deceased, the deceased husband of Hanne Madsen, and on October 30, 1936, caused the property to be distributed to himself; that he has no right, title or interest in the property except as trustee for the beneficiaries of the will of Hanne Madsen, deceased; that Hanne Madsen never at any time discovered or knew that Martin C. Madsen had attempted to obtain title to her property through the deed and assignment and the decree of distribution in the estate of Hans Madsen, deceased; that plaintiff did not know or discover that Martin C. Madsen made any claim to the property until November 10, 1936, when one of her attorneys delivered the will of Hanne Madsen to one of defendants' attorneys; that plaintiff and her attorney, through the attorney for defendants, learned for the first time of the claims of Martin C. Madsen and of the purported deed and assignment from Hanne Madsen and the decree of distribution in the estate of Hans Madsen, deceased; that during the life-time of Hanne Madsen, plaintiff inquired of her concerning her dealings with Martin C. Madsen; that Hanne Madsen was in entire ignorance of the purported deed and assignment to Martin C. Madsen or that he made any claim to any of the property of Hanne Madsen; that Hanne Madsen assured plaintiff that she had conveyed no property to Martin C. Madsen; that as far as she knew he made no claim in or to any of that property.
Plaintiff incorporated by reference all of the allegations of the first cause of action into a second cause of action. It was further alleged that the purported deed and assignment was never executed as a deed and assignment; that it was never delivered to Martin C. Madsen; that it was without any consideration; that it was void for want of any intention on the part of Hanne Madsen to make a gift of the property to Martin C. Madsen or to convey title to him; that Hanne Madsen had no intention of conveying the property to him; that the decree of distribution constituted Martin C. Madsen trustee of the property of the estate of Hans Madsen, deceased.
The allegations of the first cause of action were incorporated by reference into a third cause of action. It was further alleged that Martin C. Madsen was the son of Hanne Madsen; that she entrusted all her business transactions to him; that after the death of Hans Madsen, Martin C. Madsen assumed charge and control of all the property formerly belonging to Hans Madsen; that he took charge of the household of Hanne Madsen; that Hanne Madsen reposed great confidence in him; that Martin C. Madsen obtained the signature of his mother to the deed and assignment by fraud and misrepresentations; that he stated and represented to her that in signing that instrument she was simply authorizing him to obtain money from the Hans Madsen estate so that he could operate the farms and care for Hanne Madsen and her household; that upon those representations Martin C. Madsen obtained the signature of Hanne Madsen to the deed and assignment and also to a document nominating Martin C. Madsen as administrator of the estate of Hans Madsen, deceased; that in signing these documents Hanne Madsen relied upon the representations of Martin C. Madsen and on her belief in his personal honesty and integrity and his relationship to her; that Martin C. Madsen knew that his representations to Hanne Madsen were false and fraudulent and that she would act in reliance on them and on his relationship to her of son and confidential adviser; that he intended she should so act; that as a result of her signing the purported deed and assignment and their use by Martin C. Madsen in securing the distribution of all of the property of the estate of Hans Madsen, deceased, to himself, Hanne Madsen was deprived of all of her property and left entirely dependent.
A decree was sought declaring that Martin C. Madsen held the described property in trust for the beneficiaries under the will of Hanne Madsen, deceased, and particularly to the extent of the bequest of $3,100 made to plaintiff with accrued interest.
Little need be said concerning the defense of laches. Ordinarily, but not always, it is an affirmative defense to be set up by way of answer. When Martin C. Madsen filed his report and final account in the estate of Hanne Madsen, deceased, plaintiff appeared and contested it. A demurrer was sustained to her contest and she appealed. The judgment was affirmed on the ground that she had pursued the wrong remedy; that she should assert any rights she might have in an equitable action to impose a trust on the property. In re Estate of Madsen, 31 Cal.App.2d 240, 87 P.2d 903. The remittitur was issued on April 29, 1939. This action was commenced on May 17, 1939. These facts disclose no laches as plaintiff's counsel were sincere in the belief that they were pursuing the proper remedy in contesting the account in the probate proceeding.
Nor does the complaint disclose any undue delay on the part of plaintiff in failing to discover the deed and assignment from Hanne Madsen to Martin C. Madsen, executed and recorded on March 26, 1936, and the decree of distribution made on October 30, 1936. Plaintiff had no interest in any of the property of the estate of Hans Madsen and there was no reason for her making any inquiry concerning it before the death of Hanne Madsen on November 10, 1936, leaving a will in which plaintiff was named as a beneficiary. That was the first time plaintiff had any interest in any of the property or any interest in either estate which would give her any reason to make any investigation. She promptly filed her contest to the report and final account of the executor and pursued her mistaken remedy to its legal end. She filed this action eighteen days after the issuance of the remittitur in the former appeal. Certainly there is no undue delay shown on her part. Further, one element of the plea of laches is injury or prejudice caused by the delay. McGibbon v. Schmidt, 172 Cal. 70, 155 P. 460; Title Ins., etc., Co. v. California Development Co., 171 Cal. 173, 152 P. 542. The allegations of the complaint fail to even suggest any damage or injury caused by any delay on the part of plaintiff.
It is not questioned that plaintiff must allege and prove extrinsic fraud in order to successfully attack the two probate decrees. The question of whether the fraud alleged was extrinsic or intrinsic is an interesting one, probably because there seems to have been drawn no clear line of demarcation between the two kinds of fraud in the many California decisions dealing with those subjects.
California courts have frequently quoted or cited with approval the following definitions of extrinsic and intrinsic fraud found in United States v. Throckmorton, 98 U.S. 61, 65, 25 L.Ed. 93:
“But there is an admitted exception to this general rule in cases where, by reason of something done by the successful party to a suit, there was in fact no adversary trial or decision of the issue in the case. Where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practised on him by his opponent, as by keeping him away from court, a false promise of a compromise; or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority assumes to represent a party and connives at his defeat; or where the attorney regularly employed corruptly sells out his client's interest to the other side,—these, and similar cases which show that there has never been a real contest in the trial or hearing of the case, are reasons for which a new suit may be sustained to set aside and annul the former judgment or decree, and open the case for a new and a fair hearing. See Wells, Res Adjudicata, sect. 499; Pearce v. Olney, 20 Conn. 544; Wierich v. De Zoya, 7 Ill. 385 [2 Gilman] 385; Kent v. Ricards, 3 Md.Ch. 392 ; Smith v. Lowry, 1 Johns. (N.Y.) Ch. 320; De Louis v. Meek, 2 (Green) Iowa 55 [50 Am.Dec. 491].
“In all these cases, and many others which have been examined, relief has been granted, on the ground that, by some fraud practised directly upon the party seeking relief against the judgment or decree, that party has been prevented from presenting all of his case to the court.
“On the other hand, the doctrine is equally well settled that the court will not set aside a judgment because it was founded on a fraudulent instrument, or perjured evidence, or for any matter which was actually presented and considered in the judgment assailed. Mr. Wells, in his very useful work on Res Adjudicata, says, sect. 499: ‘Fraud vitiates every thing, and a judgment equally with a contract; that is, a judgment obtained directly by fraud, and not merely a judgment founded on a fraudulent instrument; for, in general, the court will not go again into the merits of an action for the purpose of detecting and annulling the fraud.’ ”
There are California cases holding that equity will not grant relief because of fraud directly involved in the merits of an action or in any matter on which the judgment or decree was rendered. See, Eisenmayer v. Thompson, 186 Cal. 538, 199 P. 798.
On the other hand there are numerous cases in which judgments and decrees have been successfully attacked in equity where deeds or conveyances were directly involved in those judgments or decrees and were directly passed upon there.
The cases of McGuinness v. Superior Court, 196 Cal. 222, 237 P. 42, 40 A.L.R. 1110; Gump v. Gump, 42 Cal.App.2d 64, 108 P.2d 21, and Harada v. Fitzpatrick, 33 Cal.App.2d 453, 91 P.2d 941 (hearing denied), are rather typical of cases in which well-recognized extrinsic fraud was found which justified action by a court of equity. The McGuinness and Gump cases involved divorce decrees where, after the rendition of interlocutory decrees, the parties resumed marital relations with the intention of continuing that relation, and one, without the knowledge of the other, obtained a final decree without disclosing the fact of the reconciliation to the court. The Harada case involved the modification of a divorce decree as the result of a conspiracy to defraud Mrs. Harada out of a leasehold estate in which she had invested not less than $15,000. The purpose of the modification of the decree and the effect it would have had on the leasehold were concealed from the court. In each case the fraud was held to be extrinsic and collateral to the issues tried in the divorce actions.
Wingerter v. Wingerter, 71 Cal. 105, 11 P. 853, is a case in which the plaintiff sought to obtain a decree in equity decreeing that certain property that had been distributed to defendant by a decree of distribution in the estate of John D. Wingerter, the father of plaintiff and brother of defendant, was held in trust by defendant for plaintiff by reason of fraud practiced on the plaintiff. John D. Wingerter died in 1867, in Los Angeles county, leaving plaintiff, his son, a resident of Missouri, as his only direct heir at law. Defendant, a brother of deceased, was appointed administrator of his estate. In 1881 defendant obtained from plaintiff a deed to the real property belonging to the estate, upon the representation that plaintiff's interest in the estate was worth little or nothing, and the promise to pay him $1,000. The acknowledgment on this deed was defective and defendant obtained a second deed later in the year and paid plaintiff the $1,000. The probate court distributed the real property to defendant in accordance with the grant in the deed. In this respect the facts in the instant case are parallel. Plaintiff was successful in the action, not because of any actual intention on the part of defendant to defraud plaintiff, but because the confidential relation of the parties required defendant to make a full, fair and complete disclosure of all material facts to plaintiff, which he failed to do.
The case of Wickersham v. Comerford, 96 Cal. 433, 31 P. 358, 360, involved a homestead set apart to a widow during probate. Deceased and defendant (his widow) had separated and entered into a contract dividing their property. She was never a member of his family after the separation. Plaintiff, a creditor of deceased, attacked the order setting apart the homestead by a suit in equity on the ground of the fraud of the widow. A demurrer to the complaint was sustained. In holding that the complaint stated a cause of action, it was said: “Counsel for respondents claim that the facts stated in the complaint do not constitute fraud of which plaintiff is entitled to complain. The complaint charges a willful suppression of a material truth and the suggestion of a falsehood by defendant, with intent to deceive and mislead the court, to the prejudice of the creditors of the estate, and avers that such suppression and suggestion had the intended effect, to the injury of the plaintiff, who was one of such creditors. I think this constituted fraud.”
In the case of Curtis v. Schell, 129 Cal. 208, 61 P. 951, 953, 79 Am.St.Rep. 107, defendant was the widow of Theodore L. Schell and executrix of his estate. Through the several years that the estate was kept open in probate she used all its income for the support of herself and her family. She supplemented this income by borrowing money from the plaintiff and others, executing mortgages on her interest in the property of the estate to secure these loans. About nineteen years after the death of her husband she secured an order giving her a family allowance of $150 per month, running back about sixteen years, the past due amounts aggregating about $30,000. She then secured an order to sell the mortgaged estate property to pay the family allowance and expenses of administration. If those obligations had been paid there would have remained in the estate only a fraction of the amount necessary to pay the indebtedness to plaintiff and others which the executrix had secured by the mortgages. These facts were not disclosed to the probate court. The trial court found that the suppression of these facts was not only a fraud on the holders of the mortgages but also upon the probate court. The Supreme Court held that the fraud “was extrinsic and collateral to the question examined on the application for the family allowance” and affirmed the judgment in plaintiff's favor.
The case of Sohler v. Sohler, 135 Cal. 323, 67 P. 282, 87 Am.St.Rep. 98, is persuasive. The plaintiffs were the children of Zaver Sohler and defendant, Lena Sohler, his widow and executrix of his estate. The other defendant, Paul Reuss, was the son of Lena Sohler and stepson of Zaver Sohler. Lena Sohler, in petitioning for distribution of the estate represented that Paul Reuss was the son of Zaver Sohler and one-eighth of the estate was wrongfully distributed to him. These facts were alleged in the complaint to which a demurrer was sustained. Plaintiffs appealed from the ensuing judgment. Defendants sought to sustain the judgment on the ground that the proceedings leading up to the decree and the decree itself were regular and therefore a bar to the action; that the fact that Paul Reuss was included in the distribution as a son of Zaver Sohler was based on perjured testimony and under the rule announced in United States v. Throckmorton, supra, and the California cases following it, such perjured testimony constituted only intrinsic fraud and furnished no ground for attacking the decree in equity. In a carefully considered opinion the Supreme Court disagreed with this reasoning most emphatically. It was pointed out that Lena Sohler was the mother of the plaintiffs, their natural guardian, also the executrix of the estate; that under this confidential relationship she owed her children the duty of protecting their rights and disclosing the true facts; that the breach of this duty constituted extrinsic fraud which was sufficient to sustain the action in equity. It could be argued almost as emphatically that as executrix she was an agent and officer of the probate court and as such under an equal duty to disclose the true facts to it; that the breach of this duty also constituted extrinsic fraud. Thus, the cases following United States v. Throckmorton can be harmonized with this case and many others even though that portion of the decree distributing one-eighth of the property of the estate to Paul Reuss must have been based on perjured testimony.
The plaintiffs in the case of Campbell–Kawannanakoa v. Campbell, 152 Cal. 201, 92 P. 184, were three of the children of James Campbell, deceased. Defendant Abigail Campbell Parker was his widow, mother of plaintiffs, and administratrix of his estate; and the other defendant, Alice K. Campbell, was a fourth child. The deceased left a will that attempted to create a void trust. Defendants conspired together to place the California property of the estate in a trust and thus defraud plaintiffs by preventing them from receiving, immediately on the close of the probate, their just and lawful portions of the assets of the estate. In furtherance of this conspiracy defendants concocted and carried through a fictitious probate sale of the property to Alice K. Campbell for $166,250. The administratrix secured a decree of distribution distributing the money she had purportedly, but not actually, received on this sale to trustees. She executed a deed to the property to Alice K. Campbell who in turn deeded it to the trustees. No money actually changed hands in any of these transactions. Plaintiffs brought an action in equity to subject their distributive shares of the property to a trust. Defendants defended under the decree confirming the sale, and the decree of distribution, which, with the proceedings leading up to them, were regular on their face. They argued that the fraud was intrinsic and not extrinsic. The Supreme Court disagreed with them. It pointed out the confidential relation existing between plaintiffs and their mother, her duty to deal fairly, not fraudulently, with them, and her duty to disclose to them and to the court the true facts concerning the fictitious sale. It was held that a breach of this duty to plaintiffs and the court constituted extrinsic fraud that would support plaintiffs' cause of action; that as these facts were alleged in the complaint it stated a cause of action; that the demurrer was wrongfully sustained.
It would extend this opinion to undue length to consider each case following the rules announced in the cases already considered. It should be sufficient to say that those rules find ample support in the following cases: Simonton v. Los Angeles Trust & Savings Bank, 192 Cal. 651, 221 P. 368; Caldwell v. Taylor, 218 Cal. 471, 23 P.2d 758, 88 A.L.R. 1194; Purinton v. Dyson, 8 Cal.2d 322, 65 P.2d 777, 113 A.L.R. 1230; Apablasa v. de Sepulveda, 91 Cal.App. 232, 267 P. 105; Larrabee v. Tracy, 39 Cal.App.2d 593, 104 P.2d 61.
The cases we have considered and cited support the following conclusions, where a confidential relationship is disclosed:
(1) That where there exists between the parties a confidential relationship such as parent and child, or husband and wife, there is a duty imposed to deal fairly, not fraudulently; to disclose the true facts and not to deceive; that a breach of this duty may constitute extrinsic fraud.
(2) That where a fiduciary relation exists such as guardian and ward, administrator and heir, executor and legatee, trustee and beneficiary or principal and agent, there is also a duty imposed to deal fairly, not fraudulently, to disclose the true facts and not to deceive; that a breach of this duty may constitute extrinsic fraud.
(3) That when a person is appointed by the probate court as a guardian, an executor, an administrator or a trustee, he is an officer and agent of the court; that there is also a duty imposed to deal fairly, not fraudulently, with the court; to disclose the true facts and not to deceive the court; that a breach of this duty may constitute extrinsic fraud.
The majority, if not all, of these rules are clearly stated and urged in 23 California Law Review 79, where many cases are cited which we have not considered.
If these rules are correct they bring many cases into harmony and rationalize others of which Stenderup v. Broadway State Bank of Los Angeles, 219 Cal. 593, 28 P.2d 14, is an example. In that case plaintiffs were creditors and had employed defendants to collect their debts. As they failed to secure satisfactory statements of the operations of defendants they brought suit for an accounting and recovered judgment. They subsequently discovered that defendants had collected over $9,000 more than the accounting disclosed; that defendants' testimony in the accounting action was false in that it failed to disclose these other collections. This judgment in the accounting case was clearly the result of perjury which constituted intrinsic and not extrinsic fraud under United States v. Throckmorton, supra, and the many cases following it. But the defendants were the agents of the plaintiffs for the collection of these debts. The duty was imposed on the agents to deal fairly, not fraudulently, with their principals, to disclose the true facts and not to deceive their principals. If a breach of this duty may constitute extrinsic fraud, the results reached are in harmony with the many cases supporting the views we have expressed.
In the instant case the demurrer was to the entire amended complaint and not to its separate causes of action. It admitted the truth of all facts alleged. In considering the sufficiency of the pleading we must assume the truth of its allegations. By reciting those facts alleged here, we give them no probative force.
When we analyze the allegations of the amended complaint we find that Martin C. Madsen is accused of committing separate fraudulent acts against two persons, two against Hanne Madsen, his mother, and another against plaintiff. It was necessary for plaintiff to plead these frauds against Hanne Madsen and herself for unless she was successful in establishing that the deed and assignment from Hanne Madsen to Martin C. Madsen was obtained through fraud and that the decree of distribution in the estate of Hans Madsen was obtained through extrinsic fraud, the fraud practiced on the plaintiff in the estate of Hanne Madsen would not entitle her to any relief because the latter fraud against her could have caused her no injury if during her lifetime Hanne Madsen had lawfully divested herself of all interest in the property of the estate of Hans Madsen, deceased, she having no other property at the time of her death.
The first fraud alleged is in securing the deed and assignment to all of the property in the Hans Madsen estate by Martin C. Madsen. It is alleged that Martin C. Madsen was the son of Hanne Madsen, her confidential adviser and the trusted manager of all her affairs. Where such a relationship is alleged the law presumes fraud, where, as here, the son and agent comes out of a transaction with his mother and principal, owning all of her property. The burden of disproving such presumption is placed on the son and agent. In addition to this presumption of fraud there are allegations that Martin C. Madsen was guilty of actual fraud in misrepresenting to his mother the character and effect of the document to which he secured her signature. It seems clear that had Hanne Madsen learned of the fraud during her lifetime and had she sought to set aside the deed and assignment to Martin C. Madsen by filing a complaint containing the identical allegations on that subject which appear in the amended complaint before us, her complaint would have alleged facts sufficient to constitute a cause of action. But Hanne Madsen did not file any such action because, as here alleged, she was in total ignorance of the fraud and did not learn of it during her lifetime because of her confidence in her son and agent and her belief in his honesty and integrity. Where such a confidential relationship exists the reliance on the duty imposed by that relationship on the son and agent to deal fairly and honestly and to disclose the true facts of any transactions should be sufficient excuse for failing to discover the fraud during the little more than seven months she lived after signing the instrument.
It was incumbent on plaintiff to have alleged facts sufficient to support a finding and judgment that the decree of distribution in the estate of Hans Madsen was obtained by extrinsic fraud. This decree distributing all of the property of the estate of Hans Madsen to Martin C. Madsen was obtained on October 30, 1936, eleven days before the death of Hanne Madsen. In measuring the sufficiency of the allegations of the complaint on this subject we must answer this question: Had Hanne Madsen, during her lifetime, invoked equity to declare a trust in the property distributed to Martin C. Madsen, alleging the facts here alleged, would her complaint have stated facts sufficient to have constituted a cause of action?
In approaching this question we desire to paraphrase the holding of the Supreme Court in Sohler v. Sohler, supra, substituting only such of our own language as is necessary because of the difference in the relationships and the facts of the two cases. With such substitutions we have the following: Martin C. Madsen, the administrator, was not alone the trustee of the heir of the estate, he was the son and trusted agent of that heir and was chargeable with all of the high duties pertaining to that relationship. As administrator it might be argued that he was a disinterested party, having no concern whatever in the question of heirship or right of distribution, standing indifferent between the parties, and interested only in carrying into effect the determination of the court upon these questions. But as son and trusted agent of Hanne Madsen, his position was a very different one. He was under the most solemn obligation to his mother and trusting principal. He was under like obligation to disclose to the court, on her behalf and in her interest, all knowledge which he possessed, and he was under the same obligation to see that her legal claims to the estate were properly presented before the court in probate; and with peculiar force did this duty press upon him, in view of the fact that during all this time he was administrator of, and administered upon, the estate through which his mother was to derive her property. Such being his position, it is charged that in violation of this duty he deceived both his mother and the probate court by concealing his prior fraud, thereby securing for himself all of his mother's inheritance, leaving her destitute and dependent on charity for support. Thus by concealing his own fraud and the truth from his mother, the rightful heir, and leaving her in ignorance, she was deprived of her patrimony and was, by fraud extrinsic to the case, prevented from being properly represented at the hearing, or from being represented at all.
It seems clear that had Hanne Madsen attacked the results produced by the decree of distribution in the estate of Hans Madsen, by the very allegations which are before us here, it would have been held that she had alleged facts sufficient to support a finding of extrinsic fraud and a judgment based on such extrinsic fraud. Martin C. Madsen as the administrator was an officer and agent of the probate court and as such he was under the high duty of dealing fairly and of disclosing the true facts to the court. It is alleged that he violated this duty and concealed those facts. Further, as such administrator, he was the trustee for his mother, the heir at law to the estate. He was also the son and trusted agent of his mother. These relationships placed upon him the high duty of honest dealings, to disclose and not to conceal the true facts. It is alleged that he violated these obligations to both the probate court and to his mother which, if true, made him guilty of extrinsic fraud collateral to the issues decided in the decree.
As Hanne Madsen might have attacked the deed and assignment and the decree of distribution in the Hans Madsen estate during her lifetime, that right of action descended to her executor and became vested in him. It is the duty of an executor or administrator to collect and reduce to his possession all of the property belonging to the deceased by suit if necessary. Therefore, under the allegations of the amended complaint it became the duty of Martin C. Madsen, the executor of the estate of Hanne Madsen, to demand of the same Martin C. Madsen, the individual, the execution of the trust and the delivery of the estate which Martin C. Madsen, the individual, held in trust for Martin C. Madsen, the executor. It was the further duty of the executor to enforce the execution of the trust by suit, if his demand was not complied with. This he did not do and thus violated his duty. By acceptance of the appointment as executor he assumed a position in which he became an adversary to himself. By accepting the office of executor he placed himself in control of the litigation against himself and prevented any hearing on the question of the trust and his fraud from which the trust arose. He alone had knowledge of those facts at that time. He should have disclosed them to the court so that he would not have been appointed to a position of trust the duties of which he could not perform without suing himself.
When he accepted the position of executor of the Hanne Madsen estate he became not only an officer and agent of the court but a trustee for the beneficiaries under the will of Hanne Madsen of which plaintiff was one. He then owed the duty to the court and to plaintiff to disclose every material fact within his knowledge bearing on the property of the estate or of any interest therein. He failed to perform this duty, which, under the decisions we have cited was extrinsic fraud. If the allegations of the amended complaint are true, which we must assume at this stage of the proceedings, he went further than the passive act of concealment and took the positive position of representing to the court that Hanne Madsen had no property nor estate at the time of her death. Whether or not this representation was intrinsic or extrinsic fraud, it is not necessary to decide, as the extrinsic fraud of breach of duty by concealment is sufficient.
We have, therefore, reached the conclusion that the fraud alleged in the amended complaint is extrinsic and sufficient to sustain the action.
Our attention is called to the copy of the will of Hanne Madsen attached as an exhibit to the amended complaint, and that this will is dated thirty-one days after the date of the deed and assignment of all of the property in the estate of Hans Madsen to Martin C. Madsen. It is argued that this will is inconsistent with the deed and is strong evidence that Hanne Madsen did not know that she had conveyed all of her property to Martin C. Madsen. In reply it is argued that it might have been the hope of Hanne Madsen to acquire some property after the execution of the will; that she might have had property of her own independent of that conveyed to Martin C. Madsen. This last argument overlooks the allegations of the amended complaint to the effect that the deed and assignment left her without property or means with which to support herself. The evidentiary value of the will should be considered at the trial. Its chief value at this time is to disclose the interest of plaintiff in the property in question.
Defendants next maintain that the amended complaint fails to state a cause of action because it is not alleged that the fraud in connection with the deed and assignment of March 26, 1936, and the decree of distribution in the Hans Madsen estate of October 30, 1936, was directed towards plaintiff and also that she had no interest in the property in question on those dates.
It is true that plaintiff had no interest in any of the property in question on either of those dates and that those fraudulent acts were not directed towards plaintiff, but against Hanne Madsen, her predecessor in interest. If we take the allegations of the complaint as true, as we must, the legal situation presented is this: Due to his fraudulent acts on and before March 26, and October 30, 1936, Martin C. Madsen became the owner of the legal title to the property as trustee for Hanne Madsen, the beneficial owner, who could have enforced her rights at any time. Ordinarily a beneficial owner may dispose of her interest in property by will. The interest of the legatee vests on the death of the testatrix and not before. When the will of Hanne Madsen was admitted to probate, plaintiff, for the first time, had such an interest in the property so that she could assert her rights to any of it, and at that time she first acquired that right.
In Harada v. Fitzpatrick, supra [33 Cal.App.2d 453, 91 P.2d 944], it was said: “A person, not a party to the action in which the extrinsic fraud is perpetrated, who is adversely affected by the judgment, may bring an action in equity to vacate it. Bowman v. Bowman, 97 Cal.App. 613, 275 P. 1023; Associated Oil Co. v. Mullin, 110 Cal.App. 385, 294 P. 421; [In re] Estate of Ince, 98 Cal.App. 763, 277 P. 886; Baar v. Smith, 97 Cal.App. 398, 275 P. 861.” See, also, Wickersham v. Comerford, supra; Simonton v. Los Angeles Trust & Savings Bank, supra; Apablasa v. de Sepulveda, supra.
While plaintiff was not interested in the property at the time of the frauds in March and October, 1936, her predecessor in interest was, and while plaintiff was not a party to the proceeding involving the estate of Hans Madsen, the extrinsic fraud in connection with the decree of distribution in that estate so adversely affected her as to enable her to bring this action.
Defendants urge that the cause of action is barred by subdivisions 3 and 4 of section 338 of the Code of Civil Procedure. Subdivision 3 has no application to this case which is to impose a trust on real and personal property because of the alleged fraud of Martin C. Madsen. It is not an action for the taking, detaining or injuring any goods or chattels nor for the specific recovery of personal property.
Subdivision 4 of section 338 of the Code of Civil Procedure places a three-year limitation on an action for relief on the ground of fraud, the cause of action not being deemed to have accrued until the discovery of the fraud by the aggrieved party. It is alleged that Hanne Madsen never discovered the frauds alleged to have been committed against her; that plaintiff discovered the fraud on November 10, 1936. The complaint was filed on May 17, 1939, well within three years from its discovery.
Defendants maintain that plaintiff must allege (1) the date of the discovery; (2) the circumstances of the discovery; (3) the reasons why it was not discovered at an earlier date; that the second and third elements are not sufficiently alleged.
It is alleged that on November 10, 1936, one of the attorneys for plaintiff took the will of Hanne Madsen to the office of one of the attorneys for defendants and delivered it to him; that he was then told of the deed and assignment from Hanne Madsen to Martin C. Madsen and of the decree of distribution in the Hans Madsen estate; that this was the first time that plaintiff learned of these documents or that Martin C. Madsen claimed any interest in the property of that estate. This sufficiently alleges the time and circumstances of the discovery. The reason why the discovery was not made at an earlier date is necessarily inferred from the allegations of the amended complaint. As we have already indicated, plaintiff had no interest in any of the property before the death of Hanne Madsen. There was no occasion for her making any inquiry concerning the property before that event. This is sufficient reason for failing to discover the fraud at an earlier date. The allegations here are more specific than those held sufficient in Apablasa v. de Sepulveda, supra.
The judgment is reversed with directions to the trial court to overrule the demurrer and give defendants a reasonable time within which to answer the amended complaint.
We concur: BARNARD, P.J.; GRIFFIN, J.