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District Court of Appeal, Fourth District, California.

GALE et al. v. WITT et al.

Civ. 3625.

Decided: May 22, 1947

Ray Miller, of San Diego, for appellants. Monroe & McInnis, of San Diego, for respondents.

This is an action in equity to recover, on the usual trust theory, property distributed in a prior probate proceeding to the defendant Witt. The plaintiffs are the sons and only heirs of the deceased, who left a will naming Witt as her executor, giving him her residence property, and leaving the remainder of her estate to the plaintiffs.

The attesting witnesses appearing on the will were the defendant Witt, the attorney who represented him in the probate proceedings, and this attorney's secretary Mrs. Geiger. The will was admitted to probate and seven months later a decree was entered distributing the property in accordance with the terms of the will. There was no contest of the will and no opposition to the petition for distribution, and the orders made in the probate proceedings have become final.

This action was filed more than six months after the real property was distributed to Witt. The attorney was joined as a defendant but the court later dismissed the action as to him, and no appeal was taken from that order. Briefly stated, the complaint charges that the will was executed by the deceased with Witt and this attorney as the only witnesses; that Mrs. Geiger added her signature as a witness after the death of the testatrix; that the defendants procured this additional signature because they realized the insufficiency of the will to pass the real estate to Witt; and that they fraudulently presented the will in its final form, representing to the court that it had been properly executed. It is then alleged that the plaintiffs had no knowledge of the true facts and did not discover anything in connection with the fraud until more than three months after the decree of distribution was entered.

A demurrer to the complaint was overruled and an answer was filed by Witt. When the case went to trial an objection to the introduction of any evidence was sustained, on the grounds that the order admitting the will to probate and the decree of distribution had become final and could not be collaterally attacked except for extrinsic fraud, and that the fraud alleged was intrinsic and not extrinsic in character. A judgment of dismissal was entered and this appeal followed.

The sole question presented is whether or not such fraud as that here charged is extrinsic in character. It is well settled that in such a case the fraud relied on must be extrinsic or collateral to the questions examined or determined in the prior proceeding, and that a good equitable excuse must be shown for not having there raised the issue. Hammell v. Britton, 19 Cal.2d 72, 119 P.2d 333. The respondent contends that no such excuse was here shown; that the appellants were heirs and had notice of the probate proceedings; that the issue as to the proper execution of this will was necessarily passed upon, both when the will was admitted to probate and when the petition for distribution was heard; and that the appellants, having failed to present the matter at that time, are bound by the determination then made.

The appellants rely mainly on the decision of this court in Crow v. Madsen, 111 P.2d 7, which was not reported in State Reports. Broadly speaking, it was there held that a violation of a confidential relationship, and of the duty owed by an executor to disclose the true facts and not to deceive the court, were sufficient to constitute extrinsic fraud. The respondent attempts to distinguish that case by contending that no violation of confidential relations or of any duty to the appellants here appears. He concedes that where another party is entitled to believe that the executor will protect his interest, instead of asserting a conflicting interest, there exists such a relationship of trust and confidence that the perpetration of a fraud might well be held extrinsic, as in the Crow case, since it would then operate to prevent the other party from appearing and protecting his own interest. It is then argued that a different situation here appears since it was apparent from the beginning that Witt intended to claim that Mrs. Geiger was a proper attesting witness; that the appellants must have known that this fact would be represented to the court, and that Witt was asserting his right to receive the property under the terms of the will; that from the outset his position, as a devisee, was antagonistic to the appellants' position as heirs; that they could not have believed that Witt was conducting his administration for the purpose of vesting title to the home property in them; that the fraud charged, representing that the will was properly executed, amounts to nothing more than a misrepresentation to the court with respect to the exact issue there involved; and that such fraud, under established rules, is intrinsic in character. The respondent relies upon Pico. v. Cohn, 91 Cal. 129, 25 P. 970, 27 P. 537, 13 L.R.A. 336, 25 Am.St.Rep. 159, and other cases, in which it has been held, generally speaking, that the use of perjured testimony or forged documents constitutes intrinsic rather than extrinsic fraud, since defense thereto may be made in the action in which the fraud occurs.

While it has been held, in a number of cases, that a judgment would not be vacated merely because it was obtained by forged instruments or perjured testimony, it does not necessarily follow that, under some circumstances, such things may not constitute extrinsic fraud. The basic distinction in such cases seems to be whether the fraud in question was such as to prevent a full and fair hearing, or whether it involved a situation where the injured party, having the opportunity so to do, has failed to present his case. The rule itself, distinguishing between intrinsic and extrinsic fraud, is designed not only to give finality to judgments, but to protect injured parties who have wrongfully been prevented from presenting their case, especially where a court has been imposed upon. Under the rule, a violation of confidential relations which has the effect of preventing a party from presenting his case may be sufficient to constitute extrinsic fraud.

The leading case defining extrinsic fraud is United States v. Throckmorton, 98 U.S. 61, 25 L.Ed. 93. The court there stated that the cases where relief would be granted are those in which ‘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 and deception practiced on him by his opponent, as by keeping him away from court, a false promise of 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.’ Because of the examples given in this statement of the rule, some cases have limited its application to situations where the injured party has been kept in ignorance of the proceeding, or prevented from making a defense, by some representation made directly to him by the other party. The rule, by its terms, seems to go further than this and to cover any fraud or deception which prevents the other party from presenting his case. In other words, where the fraud was such that it prevented a real contest on the issue in question.

In Caldwell v. Taylor, 218 Cal. 471, 23 P.2d 758, 761, 88 A.L.R. 1194, fraud although largely the same as that involved in a previous will contest, was held to be extrinsic since the false statements made by the beneficiary of the will had prevented the plaintiff from setting up a real defense to the probate of his father's will. The court stated that the case was similar in principle to the one there cited, in which it was held that willful concealment of fraud was sufficient to warrant the aid of equity since the fact of such original fraud, if known, would have been a defense in the original action. In that case, the court said: ‘The main requirement to establish extrinsic fraud is that the unsuccessful party was prevented by his adversary from presenting all of his case to the court. One of the examples given is that of a party who is prevented from appearing in court. It would seem that the deceit practiced in the instant case was just as effective to prevent the proper presentation of the contest as if the plaintiff had been prevented from being present at the hearing.’ In Purinton v. Dyson, 8 Cal.2d 322, 65 P.2d 777, 779, 113 A.L.R. 1230, there was involved a situation where an executor, who was also a beneficiary of the estate, failed to inform a pretermitted heir of the death of her ancestor with the intention of gaining an increased share in the estate. In holding that the suppression of this information constituted extrinsic fraud, the court said: ‘However, it is difficult to see how fraud could be practiced more directly upon one entitled to present his rights to a court than by keeping him in ignorance of the proceedings.’ After pointing out that most such cases have involved direct representations that it was unnecessary for the other party to appear in the proceedings, the court further said: ‘But the rule allowing the maintenance of an action in equity for extrinsic fraud should not be limited so strictly as to require as a basis evidence of representations made directly to the one defrauded.’ The court further quoted from Bankers' Trust Co. v. Patton, 1 Cal.2d 172, 33 P.2d 1019, as follows: ‘It is assumed that the willful suppression in bad faith of material facts in probate proceedings by which the plaintiff and other creditors would be deprived of property and assets * * * would constitute an extrinsic fraud against which equity could grant relief by charging the distributees as trustees, even though the decree of distribution itself be not disturbed.’

In other cases, the concealment of material matters and the suppression of the truth with the intent to mislead the court have been held to constitute extrinsic fraud on the general ground that they have in fact prevented the injured party from presenting, or fully presenting, his case in the original action. (Wingerter v. Wingerter, 71 Cal. 105, 11 P. 853; Wickersham v. Comerford, 96 Cal. 433, 31 P. 358; Curtis v. Schell, 129 Cal. 208, 61 P. 951, 79 Am.St.Rep. 107; Sohler v. Sohler, 135 Cal. 323, 67 P. 282, 87 Am.St.Rep. 98; Campbell-Kawannanakoa v. Campbell, 152 Cal. 201, 92 P. 184, 187.) In several of these cases confidential relations between the parties with a consequent duty to reveal the true facts was also relied on as supporting the theory of extrinsic fraud. In some of them the offending party had also acted as executor of the estate, and there had been a breach of the resulting duty to disclose the facts to the court. In the last case cited, where a pretended sale of the property of the estate was put through in order to circumvent an illegality in the will, the court held that the entire proceedings, including the sale and the distribution of its proceeds, were a mere sham, an imposition on the jurisdiction of the court and an attempt, by concealing the real facts from the court, to use that jurisdiction for the purpose of depriving the plaintiffs of their rights under the law. It was held that this was ‘an imposition upon the jurisdiction of the court, to the injury of the absent property owners, from the nature of the transaction was concealed and who were wholly in ignorance thereof, and could not have learned concerning the same from anything appearing on the face of the purported proceedings, by one who was their trustee for the proper administration of the affairs of the estate * * *.’ The court held that these acts constituted a fraud upon the plaintiffs as well as upon the court and that ‘the extrinsic character of the fraud is even clearer here’ than in the ordinary case ‘where a party was in a former proceeding simply deprived by some fraudulent artifice or breach of fiduciary duty on the part of the prevailing party of his opportunity to be heard upon the issues there presented and determined.’

Applying the established rules to the alleged fraud here in question it must be held that the same is extrinsic in character. Something more appears than the mere fact that what amounts to a forged instrument, with perjured testimony, was employed and used in the original proceedings. There was a fiduciary relationship between these parties since the respondent executor not only was under the duty of disclosing the true facts to the court but he was acting as a trustee for the appellants as beneficiaries of the estate. Bacon v. Bacon, 150 Cal. 477, 89 P. 317. By concealing the true facts and falsely representing that this will had been properly attested, under the allegations of the complaint, he violated his duty to the court and to the appellants and effectively prevented a contest or a real hearing. The pretended due execution of this will was as much a sham as was the pretended sale in the case above cited. As was said in Bacon v. Bacon, 150 Cal. at page 492, 89 P. at page 323.

‘To deny relief where the fact is technically in issue, though, by reason of the mistake or fraud, not controverted or contested at the trial or hearing, would be to destroy the equitable remedy in a large class of cases in which it has been hitherto administered.’

It is idle to say that the appellants, being heirs, had notice of the proceedings and could have there brought out the true facts. They had no knowledge of the facts until some months after the entry of the decree of distribution, which it is claimed is conclusive of the issue. From the nature of the case the appellants had no way of knowing that this will, vouched for by the executor, was not in fact executed before the witnesses whose signatures were attached thereto, with all of the earmarks of having been actual attesting witnesses. Such a fraud would naturally be more deceptive than a mere forgery, in which some possibility of detection may be inherent. These signatures were genuine, leaving no possible sign of the concealed fraud. There was nothing on the face of the proceedings which would have informed the appellants of the true situation, which would arouse their suspicion or which should have prompted them to make an investigation. They were entitled to rely upon the representations made to the court and to them by the executor, who was acting officially for the court and as trustee for them in the proper administration of the estate. Not only was an imposition and fraud practiced upon the court by the executor as an officer of the court, but it operated directly to mislead the appellants, and it was intended to and did have the practical effect of preventing a real contest on this issue and of depriving the appellants of an opportunity to be heard. It would be difficult to imagine a form of fraud which would more directly affect the rights of the appellants or more effectively prevent them from having a real hearing, than the presentation of such an instrument under such circumstances by one having the duty to disclose the true facts, both to the court and to them. It follows that the fraud in question is extrinsic in character, and that the judgment of dismissal should be reversed to the end that the truth or falsity of the charges made may be fairly heard and determined.

The judgment is reversed.

BARNARD, Presiding Justice.

MARKS and GRIFFIN, JJ., concur.