OLIVERA v. GRACE

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District Court of Appeal, Fourth District, California.

OLIVERA v. GRACE.

Civ. 2777.

Decided: August 14, 1941

Harold M. Davidson, of Alhambra, for appellant. Daniel A. Knapp, of Los Angeles, for respondents.

The question presented on this appeal is whether the court erred in sustaining defendants' demurrer to plaintiff's third amended complaint without leave to amend. The third amended complaint alleged substantially that Emilie Rust, a widow, owned certain real property; that she conveyed the property to John and Marie V. Zell, who thereafter reconveyed the property to Emilie Rust and her daughter Hattie Haas, as joint tenants; that in connection with the said conveyance Emilie Rust sought the advice of Judge Bidwell and William Getz as to the legal consequence and incidents of the disposition of her property; that subsequent to the execution of the joint tenancy Emilie Rust sustained an injury to her head resulting in the complete loss of her mentality so that thereafter she was, up to her death, wholly devoid of understanding and incapable of transacting business of any nature; that she was judicially declared incompetent on April 8, 1938, and that plaintiff Marguerite Olivera was appointed her guardian; that Emilie Rust died on December 13, 1938, and that plaintiff Marguerite Olivera was appointed administratrix of her estate; that on April 23, 1936, Hattie Haas died and defendant Rosaline Grace was appointed administratrix of her estate; that on July 10, 1936, defendant Rosaline Grace commenced an action to reform the joint tenancy deed, asking that it be reformed to a conveyance in fee to Hattie Haas, with reservation of an estate for life in Emilie Rust; that defendant Rosaline Grace served Emilie Rust with process in said action; that Emilie Rust failed to answer and a default was entered; that judgment was secured reforming said joint tenancy deed to convey a fee to Hattie Haas with a life estate reserved in Emilie Rust; that defendant Rosaline Grace knew that Emilie Rust was incompetent but notwithstanding such knowledge failed to have a guardian appointed for her; that defendant Rosaline Grace knew that Emilie Rust had talked with Judge Bidwell and that she had told him she wanted to create a joint tenancy with her daughter Hattie Haas; that defendant Rosaline Grace also knew that Emilie Rust had talked with William Getz respecting the joint tenancy; that notwithstanding this knowledge, defendant failed to call these men as witnesses in the action to reform the deed; that defendant failed to inform the court of the facts concerning Emilie Rust's mental condition; that except for said fraud the decree reforming the deed would not have been rendered; and that plaintiff did not know of said action until January 4, 1939, when she found the complaint among the papers of Emilie Rust.

The rule is that upon a general demurrer a complaint will be liberally construed with a view to substantial justice, but the court will not apply this rule so as to allow an unmeritorious cause of action to be veiled by a subterfuge of loose and equivocal statements. Substantial justice requires that the essential facts appear at least by necessary implication from the allegations set forth. Risco v. Reuss, 45 Cal.App.2d –––, 113 P.2d 914. In the third amended complaint it is alleged that Rosaline Grace knew that Emilie Rust was incompetent, but the fact also appears from the third amended complaint that Emilie Rust was not declared to be incompetent until about two years after the default judgment had been taken. It follows that Rosaline Grace could not have known of Emilie Rust's incompetency as an adjudicated fact. The presumption is that a person is sane. Proof of insanity carries back no presumption of its past existence. It exists only from the time when it is proven to exist. Estate of Dolbeer, 149 Cal. 227, 86 P. 695, 9 Ann.Cas. 795. A person may be incompetent in the general acceptation of the term and yet be able to carry on his business. Here, Emilie Rust may have been incompetent, yet her incompetency may not have been of such a character as to deprive her entirely of the powers of knowing and understanding the nature of the summons and complaint which were served on her in the action to reform the deed. San Francisco Credit Clearing House v. MacDonald, 18 Cal.App. 212, 122 P. 964. She did not throw them away but placed them with her other papers. To know that a person is insane one must have proof thereof and not be merely guessing or conjecturing. Because one may think a man is insane that does not make him so. The law does not permit labels of insanity to be so easily tacked upon a person whose actions and conduct are such as to lead his friends to believe he is insane. His friends might be wrong. Until the court has declared a person to be incompetent he is presumed to be sane. One may have an opinion of another's insanity but that would not be the same as having knowledge of the fact of another's insanity. The statement that Rosaline Grace knew of Emilie Rust's incompetency is equivalent to saying that she had knowledge that the incompetency mentioned had been proved to exist. From a legal standpoint this could not be true because the incompetency had not been determined to exist until April 8, 1938. Avery v. Avery, 42 Cal.App. 100, 183 P. 453. We may presume that the service was made in good faith; that it was made in accordance with the law; that Rosaline Grace was innocent of any wrong; and that she believed her grandmother Emilie Rust understood the nature of the papers served. Nothing in the third amended complaint would lead us to discard these presumptions or to presume otherwise. Had Emilie Rust at the time the papers were served been judicially declared to be of unsound mind or incapable of conducting her own affairs and a guardian had been appointed for her, the service to be valid would have had to be made by delivering a copy of the summons to her and also to her guardian. But we know the fact to be that she had not been declared incompetent and she had no guardian. The service in these circumstances, to be valid, had to be made on Emilie Rust personally. This was done and she was therefore properly before the court and the court had jurisdiction to render a judgment against her. Code Civ.Proc., § 411, subds. 4 and 7; Sacramento Savings Bank v. Spencer, 53 Cal. 737; Winslow v. McCarthy, 39 Cal.App. 337, 178 P. 720. Every intendment must be indulged in favor of the degree rendered in the action referred to (Freeman v. Gray–Cowan, Inc., 219 Cal. 85, 25 P.2d 415) and the decree may not be set aside on the ground of fraud unless it is shown that the fraud was practiced directly upon Emilie Rust and that she was by reason thereof prevented from presenting her case to the court. The courts will not relieve a party from the effect of a judgment when the fraud charged relates to matters upon which the judgment was regularly obtained and where an opportunity was given to the party against whom it was entered to contest the matters in issue or present any defense which was available. Flood v. Templeton, 152 Cal. 148, 92 P. 78, 13 L.R.A.,N.S., 579.

In United States v. Throckmorton, 98 U.S. 61, 65, 25 L.Ed. 93, the court said: “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.”

In Flood v. Templeton, supra, the court in commenting on the rule laid down in the Throckmorton case, said (152 Cal. page 156, 92 P. page 82, 13 L.R.A.,N.S., 579): “It will be observed that the principal ground upon which equity affords relief, as announced in the Throckmorton Case, is that by reason of the fraud practiced on the plaintiff against whom the judgment was obtained there was no adversary trial of the issues in the action; that he was prevented through such fraudulent act of his adversary, and without any fault on his own part, from presenting a meritorious defense to the action brought against him.”

There are no allegations in the third amended complaint which charge Rosaline Grace with this kind of fraud, and in view of some of the allegations of the pleading, it is difficult to see how any such charge could consistently be made. Emilie Rust was properly served. She was presumably sane. She saved the summons and complaint and for all we know she purposely remained away from the court. It is contended that Rosaline Grace practiced extrinsic fraud upon the court by not advising the court that she thought her grandmother was insane. This is a harsh contention and quit untenable. She could not be guilty of fraud in failing to disclose facts of which she had no knowledge. All she had was an opinion, if she had anything on that score, and there was no duty on her part to disclose this opinion to the court. Estate of Shay, 196 Cal. 355, 237 P. 1079.

“One is not to be charged with concealment of any fact unless he is under some obligation to disclose it, and the mere omission to make mention of a fact, in the absence of any knowledge or notice on his part that it is requisite to make such mention, falls far short of fraud.” 12 Cal.Jur. § 44, p. 773. See, also, Wickersham v. Comerford, 104 Cal. 494, 38 P. 101.

It is also contended that the conduct of Rosaline Grace “in placing on the stand only witnesses who were favorable to her case and in withholding and keeping from the court all witnesses having knowledge of all the facts and in preventing the defendant from having a fair trial or in fact from being represented at all was the practice of extrinsic fraud upon the court.” Emilie Rust may have sought the advice of Judge Bidwell, William Getz and a number of other persons, but unless they had a part in the transaction or knew about it first hand they would not be of much assistance in the case and their testimony most likely would be excluded as being too remote and immaterial. We may assume that there was ample evidence offered by disinterested witnesses to support the complaint; that the Zells, who would be expected to be present at the time of the transfer and would know their own intention and would know the expressions of intention made by the grantees Emilie Rust and Hattie Haas, would present to the court the facts attending the transfer; that nothing was concealed from the court and that all the facts, including the reason for the deed itself, were given to the court even though Hattie Haas could not testify by reason of her death, nor Emilie Rust, if it be true, by reason of incompetency. Rosaline Grace had no duty to call any persons as witnesses who might have talked previously with Emilie Rust respecting the transferring of her property, and her failure to call such witnesses did not constitute a fraud on the court. In re Griffith, 84 Cal. 107, 23 P. 528, 24 P. 381. The trial court must have been satisfied with the evidence offered or it would not have granted the relief. There is a presumption that the trial court heard sufficient evidence to support its judgment. Smith v. Golden Gate Syndicate, 43 Cal.App. 346, 185 P. 209.

What would happen if the judgment were set aside? Would a new trial result in a different judgment? These questions cannot be answered from the third amended complaint. Equity will not do the vain thing of setting aside a judgment when the result would be the same.

“In an action to set aside a judgment for fraud, the plaintiff must not only show by his complaint the facts constituting the fraud which give him his right to the relief, but must also show that he has a defense to the original action upon the merits, and that he is able to present to the court the evidence constituting that defense. It is not sufficient to merely allege these matters as ultimate facts, or to aver them in the form of an affidavit of merits, but the facts themselves––those constituting the fraud, those constituting his defense, and those constituting his ability to present them to the court––must be incorporated into his complaint, so that the court may determine that, if his allegations are admitted by the other party, the plaintiff would have been entitled to a judgment in his favor in the original action.” Whitney v. Kelley, 94 Cal. 146, 153, 29 P. 624, 626, 15 L.R.A. 813, 28 Am.St.Rep. 106 (concurring opinion).

Plaintiff made no request to amend her third amended complaint after the ruling upon the demurrer and she thereby waived her right to assert that the court abused its discretion in sustaining the demurrer without leave to amend. See v. Joughin, 18 Cal.App.2d 414, 64 P.2d 149.

Inasmuch as this action was pending when section 472c of the Code of Civil Procedure became effective, the new rule as therein set forth is not applicable.

The judgment is affirmed.

MUNDO, Justice pro tem.

We concur: BARNARD, P. J.; MARKS, J.