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District Court of Appeal, Second District, Division 3, California.

Anita P. FLORES, Plaintiff and Appellant, v. Esther G. ARROYO, also known as Esther Arroyo Flores, Defendant and Respondent. *

Civ. 24662.

Decided: March 30, 1961

Max Tendler and Gerald Friedman, Los Angeles, for appellant. Wolver & Wolver, Los Angeles, for respondent.

The present action was instituted by Anita P. Flores, the divorced wife of Frank G. Flores, against Esther G. Arroyo, the second wife of Frank, who also had divorced him. The purpose of the action is to obtain relief for a fraud alleged in the complaint to have been perpetrated upon plaintiff by Frank and Esther in the following manner: They conspired to cheat plaintiff out of her rightful share of the community property of herself, and Frank and to accomplish that purpose they purchased in the name of Esther real property with $25,000 of community funds of plaintiff and Frank; they concealed said facts from plaintiff, for the purpose of cheating and defrauding her; plaintiff and Frank entered into a property settlement agreement which divided the community property, with the exception of said sum of $25,000 or the property purchased therewith; in the negotiation of the property settlement Frank not only fraudulently concealed the purchase of said real property with community funds but also represented that the property being divided was all of the community property; plaintiff believed and relied upon said representation and executed the property settlement in ignorance of the use of community funds in the purchase of said property. Plaintiff was awarded a decree of divorce from Frank and the property settlement was approved by the decree and incorporated as a part of the same. Plaintiff received a final decree of divorce in March 1958. In December 1958, Frank conveyed his interest in the real property to Esther by quitclaim deed. Plaintiff first learned of the foregoing facts January 15, 1959. Defendant demurred to the complaint; the demurrer was sustained without leave to amend and judgment was rendered dismissing the action. Plaintiff appeals.

The complaint, which had been once amended, stated a good cause of action for relief.

We shall consider first the grounds upon which defendant seeks to uphold the judgment. The first point is that the property settlement agreement between plaintiff and Frank, and its incorporation in the decree, constituted a full and complete settlement of their property rights, which cannot be re-litigated. On this point defendant cites the case of Broome v. Broome, 104 Cal.App.2d 148, 231 P.2d 171. The case is not in point. Plaintiff there had been awarded certain property by a decree of divorce in accordance with an agreement that she had made with her husband. She brought suit for additional property upon the theory that the agreement gave her an interest in after-discovered property. The court said (104 Cal.App.2d at page 155, 231 P.2d at page 174): ‘She is attempting now to relitigate an adjustment of her property rights which were fixed by the interlocutory judgment. * * * She thus makes a collateral attack on the decree without alleging any facts that might have defeated a full and fair trial of the divorce action. This cannot be done. No second action can be tried as to anything within the scope of the first whether in fact it was alleged and considered in the first or not, so long as the same matter was actually in issue.’

Plaintiff in our case was deceived in negotiating the property settlement; she was thereby deprived of an opportunity to assert and litigate her rights therein in the divorce action and the decree of divorce which approved the property settlement was the result of the extrinsic fraud practiced upon plaintiff by Frank and Esther.

Defendant also cites Garten v. Garten, 140 Cal.App.2d 489, 259 P.2d 23, which holds that when the pleadings put in issue the status of certain property the court may determine whether it is separate or community property, and enter judgment accordingly. We cannot disagree with that proposition, but it is not relevant to the issues presented by the complaint.

Defendant does recognize that there is a difference between intrinsic and extrinsic fraud and that a judgment may be impeached only for the latter. She therefore contends that plaintiff has alleged only intrinsic fraud which resulted in the decree and approval of the property settlement. Therefore, she says plaintiff cannot go behind the decree upon the basis of the facts which she has alleged. This argument is unavailing. Under the facts alleged the decree in Anita's case is not res judicata of the issues in the present case.

It is settled that where a husband fraudulently conceals the existence of community property from his wife and obtains her consent to an unfair division of the community property by means of concealment or misrepresentation, approval of the agreement and its incorporation in a decree of divorce does not protect the husband in an action by the wife seeking redress for the fraud. Esther stands in no better position than would Frank.

In Dandini v. Dandini, 120 Cal.App.2d 211, 216, 260 P.2d 1033, 1036 the court said: ‘At least where one party occupied a confidential relation to the other active measures taken by one to conceal the true facts from the other constitutes extrinsic fraud. See the full discussion and the cases collected by the court in Jorgensen v. Jorgensen, 32 Cal.2d 13, 18–21, 193 P.2d 728. We find nothing in the argument that the court could not award the newly discovered community property to the wife in this action without setting aside the separate maintenance decree. The same argument was summarily disposed of in Milekovich v. Quinn, 40 Cal.App. 537, 545–546, 181 P. 256, 260, ‘It is not necessary under the rule announced in Green v. Duvergey, supra, [146 Cal. 379, 80 P. 234], that a divorce decree be set aside in whole or in part.’ The court in this action gave the plaintiff the additional relief of which Dandini's extrinsic fraud had deprived her in the original action. To do that it was not necessary to set aside the original decree, which had properly disposed of all of the community property disclosed in that action. It would be futile to set aside the disposition of property made by the former judgment only to readopt the same disposition in a new judgment.'

The complaint in the present action alleges not only concealment of material facts by Frank, but active misrepresentation.

Having determined that the complaint stated a good cause of action for equitable relief we turn to another feature of the appeal that is discussed in the briefs, namely, whether plaintiff's action is barred by a decree of divorce which Esther obtained from Frank, in which she was awarded the real property in question. This false issue crept into the case under a theory of court procedure which is as inappropriate as it is novel. By her demurrer defendant pleaded as res judicata a judgment of divorce in Esther's suit against Frank, by which she was awarded as against him the property in question, and which she asserted and now asserts operates as a bar to the present action. First we find from the record that the judgment in that case was not before the court except as it was pleaded in the demurrer; there was no stipulation that it might be considered by the court for any purpose. The judgment in the present case recites that the court had taken judicial notice of the actions of Anita against Frank and of Esther against Frank, although there is no recital in the judgment or any provision of it which indicates whether the court determined that the judgment in Esther's case is a bar to the present action. Looking further we find that after the present appeal was taken the parties entered into a stipulation for inclusion in the record on appeal, for the consideration of this court in arriving at its judgment, ‘The judgment roll and all papers and records on file with said Clerk, including Minute Orders and exhibits, including but not limited to any property settlement agreement in the action entitled Anita P. Flores, plaintiff, v. Frank G. Flores, defendant, being case number D–511182, in the files and records of the above-entitled Court’ and ‘The judgment roll and all papers and records on file with said Clerk, including Minute Orders and exhibits, including but not limited to any property settlement agreement in the action entitled Esther Arroyo Flores, plaintiff, v. Frank G. Flores, defendant, being Case Number D–544500, in the files and records of the above-entitled Court.’ Included in the clerk's transcript are numerous documents which we presume to be those listed in the stipulation.

We are not at all disposed to recognize this included material as a part of the record on appeal. It does not belong here under any authorized procedure and we do not recognize the right of counsel in the case to inject into an appeal matters which were not before the trial court for decision, but which they may wish to have this court decide for the convenience of the parties. The rules on appeal are not only for guidance of the litigants and their counsel but they draw the line between what may and what not be considered by a reviewing court in the exercise of appellate jurisdiction. They do not vary from case to case in order to satisfy the whims and eccentricities of the lawyers who seek to by-pass proceedings in the trial court. However, the procedure urged upon this court is no more peculiar than the action of the trial court in taking judicial notice of the judgment in Esther's case against Frank, which had never even been called to the attention of the court, except by way of demurrer. Presumably, the court looked at that file of its own volition, under the erroneous impression that it had before it for its consideration a properly pleaded defense of res judicata. For all we can learn from the record the present action may have been dismissed for the reason that the court regarded the judgment in Esther's case to be res judicata of Anita's pleaded cause of action. Ordinarily it would be presumed that the court did not commit the error of deciding the case on that theory, but that presumption cannot be fitted into the procedure shown by the record.

The judgment must be reversed. If the judgment in Esther's case is pleaded as res judicata it will be for the trial court to pass upon the merits, if any, of that defense. Since that question is not before us, it would be inappropriate for us to express our opinion as to the merits of a plea of res judicata, consisting of a judgment in an action to which Anita was not a party, in which she did not participate, of which she had no knowledge, and with relation to which she was a stranger in every sense of the word.

Upon remand the demurrer to the amended complaint should be overruled. If the defendant seeks leave to file an answer the court should rule upon the request in view of the provisions of section 472a, Code of Civil Procedure, which provides that in such a situation ‘The court may, upon such terms as may be just, allow an answer.’ See also Rule 2(e), Rules for Superior Courts. As stated in Thornton v. Borland, 12 Cal. 438, decided under the Practice Act, section 67, as amended in 1854, which provided “The Court may, upon such terms as shall be just, and upon payment of costs, allow the defendant to file an answer,” and ‘The allowance rests in the discretion of the Court below, subject to review, of course, in case of its arbitrary or unreasonable exercise.’ The court said further that the power of the court was to be exercised so as to prevent delays and to promote justice. See, also, Private Investors v. Homestake Min. Co., 11 Cal.App.2d 488, 54 P.2d 535; Fong Bros. v. Geiger, 60 Cal.App.2d 201, 140 P.2d 464.

We may add that in exercising its discretion in this connection, and in similar situations, it would be proper for the court to consider whether the proceedings which had their origin in a pointless demurrer unduly and unjustly delayed a determination of the action on its merits. There is a salutory purpose in vesting in the court this discretionary power, which should not be ignored. When a defendant gains a dismissal by means of a clearly untenable demurrer, the plaintiff should not be the one to suffer through the ensuing delay.

The judgment is reversed for further proceedings in accordance with the views herein expressed.

SHINN, Presiding Justice.

VALLEÉ and FORD, JJ., concur.