Court Opinion

ID: 9794322
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:03:55.224572+00
Date Added: 2024-06-11T08:14:36.619181
License: Public Domain

BLACKBIRD, Justice
(specially concurring).
I concur in the ' essential conclusions reached in the opinion filed here by Justice BERRY, but, as I view this case, there are strong reasons for reaching the same result that are not mentioned therein, and which I consider important, not only to the litigants in this case, but also of importance to the Bench and Bar in clearly defining our position, and charting its course in future litigation.
On the basis of its facts, this, to my knowledge, is a case of first impression and I think it should be more completely shown that our decision does not strike down any previous precedent cited by any of the parties, but is in accord with the majority of well-reasoned authority.
Though defendants contend that the final decree in the matter of Dewey Smith’s Estate (Probate No. 1007), never having been appealed from, must, in the present district court action, be regarded as “res judicata”, as to his heirship, and they cite Title 58 O.S.1951 § 632, as to the conclusiveness of such decree, they recognize, in one statement of their brief, that such a decree, even though rendered after proper statutory notice, can be modified “in a court of equity, by proof of fraud.” It is well settled that where extrinsic fraud is shown to have existed, the successful party or parties unjustly enriched thereby may be regarded as trustees for the benefit of those who have thus been deprived of their rightful inheritances. See Patterson v. Dickinson, 9 Cir., 193 F. 328, 334, and Long v. Mulford, 17 Ohio St. 484, 93 Am.Dec. 638, 651, 652. While the judgment or decree of the probate court is not set aside — where the estate property is still in the hands of the distributees, said decree, though ostensibly valid, may be avoided, and the devisees’ respective interests adjusted so that all legal heirs may obtain their proper share of the property. See Zaremba v. Woods, 17 Cal.App.2d 309, 61 P.2d 976, 981, citing Caldwell v. Taylor, 218 Cal. 471, 23 P.2d 758, 88 A.L.R. 1194; Gerlach v. Schultz, 72 Idaho 507, 244 P.2d 1095, and authorities cited therein; Purinton v. Dyson, 8 Cal.2d 322, 65 P.2d 777, 780, 113 A.L.R. 1239, and other cases cited in the Annotations thereto, and at 49 A.L.R. 1219, and in Hoverstad v. First Nat. Bank & Trust Co., 76 S.D. 119, 74 N.W.2d 48, 56 A.L.R.2d 938, 944; 30A Am.Jur., “Judgments”, Sec. 761; Restatement of the Law, Judgments, Sec. 112. (The last cited case is distinguishable from the present one in that there the executor held no part of the estate’s corpus, as does Vivian Phillips here, and the court deemed the action a collateral attack, and thought the better policy was to relegate the plaintiff therein to vacation proceedings in the county court, where requiring executors' accountings is a customary function). *201When such procedure is followed, the dire and far-reaching effects on title stability, of “upsetting” final decrees, never occurs, and bona fide purchasers from distributees under apparently valid decrees, are protected. Sohler v. Sohler, 135 Cal. 323, 67 P. 282; Restatement, supra; 24 Am.Jur., “Fraud and Deceit”, page 6, at note 4. Also as one court (Seeds v. Seeds, 116 Ohio St. 144, 156 N.E. 193, 198, 52 A.L.R. 761, 769) has put it:
“If it be said that the sanctity, the solemnity, and the finality of judgments and decrees of the courts will thereby be destroyed, it may be answered that fraud and imposition upon the courts have always been grounds for setting aside their judgments and decrees; that where decrees are entered by practice of fraud and imposition upon the courts, whereby certain persons have enriched themselves at the expense of others, it is the peculiar province of a court of chancery to right the wrong. The only protection to which the decrees and judgments of the courts are entitled is to be found in the quantum and character of proof which are necessary to be found in establishing a case of fraud and imposition.”
As to related matters, see the Annotations, 160 A.L.R. 1349, 1352, 1354.
By way of demonstrating the distinction between extrinsic and intrinsic fraud, as applied to probate proceedings, the court, in the Purinton case, supra (quoting from the Zaremba case, supra) pointed out [8 Cal.2d 322, 65 P.2d 780] :
“There is a clear line of demarcation * * * between a statement made in the petition for the probate of the will which would limit the giving of notices to heirs, and testimony in court to the effect that there were no such heirs, after the heirs had been notified of the proceedings for the probate of the will as provided by the different sections- of the Probate Code.” (Emphasis mine;) As will be noted from the above quotation, one of the types of misrepresentation, described therein, is in the same general category as that involved here, i. e., the type that tends to limit notice and prevent a party having an interest in probate proceedings, from having his “day in court” therein, such as the statements as to the number and identity . of Dewey Smith’s heirs that were contained in the petition for her appointment as administratrix and her final report and petition for distribution which Vivian filed in Probate Cause No. 1007, supra. If she had not made such representations, but instead had disclosed in said pleadings that her deceased husband may have had another heir besides those she named therein (of which possibility she was well aware) then there would have been no necessity for her undertaking (in-order to show she had discharged her positive fiduciary duty as administratrix in said proceedings) the inconsistent and rather unenviable task of proving (without documentary verification or support) that she verbally gave the probate judge information whose tendency was to cast doubt upon the positive statements contained in her pleadings. But, in her verbal representations, she was not completely honest. Her characterization as mere “rumor”, of information about a former marriage by Dewey and a child’s being born of that marriage (birth of plaintiff) were more than just rumor. She knew they were facts. Of course, it was not proved that at the time her husband’s estate was probated, Vivian knew that plaintiff was still alive, or in existence (though there is evidentiary basis for concluding that a more intelligent, diligent, or less “half hearted” search would have led to plaintiff’s discovery). But Hewitt v. Hewitt, 9 Cir., 17 F.2d 716, 718, shows that this fact is not controlling. The significant thing is that Vivian and/or her attorney told the probate judge about plaintiff in a manner or way that tended to discourage, rather than encourage, further inquiry about, and search for, her. In the Hewitt case, supra, after showing that the
*202standard of conduct governing strangers at arms length, does not apply to the fiduciary relationship existing between the adminis-tratrix of estate property, and the rightful heirs to it, the court demonstrated that it is such fiduciary’s duty to make a full disclosure to the court about her information as to the decedent’s heirs; and that when she does not do this, or remains silent — resulting in her gain, or enrichment, at the missing heir’s expense — “there is a fraud of most serious nature”, whether it be regarded as “intrinsic” or “extrinsic”, or both. With reference to this duty of an admin-istratrix toward a “missing” heir, who in that case was the administratrix’ deceased husband’s adopted son, and her failure there to discharge it, the court, among other things, said:
“This duty she wholly failed to discharge, and the reason for her failure cannot be accepted. She knew that her husband had an adopted son, and the only knowledge or information she had as to his death was the bare statement of her husband that it had been so reported to him, but where, when, or by whom she was not advised. Had she communicated all of these facts to the court, it is not at all likely that a decree of distribution would have been entered without directing further investigation or inquiry — at least we have a right to so presume.” (Emphasis mine.)
In the present case, Vivian had no information that plaintiff, whom she knew (rather than only heard) had existed at one time, was then dead. I see no reason why the court’s condemnation of the adminis-tratrix’ conduct in the Hewitt case, and the effect given said conduct, would not apply with equal, if not greater, force to Vivian’s conduct here.
Monk v. Morgan, 49 Cal.App. 154, 192 P. 1042, is the only case defendants cite holding specifically that an administrator’s misrepresentation to the probate court of the number and identity of his intestate’s heirs is intrinsic fraud, and furnishes omitted heirs no ground, in equity, for relief from a decree of distribution based upon such misrepresentation. However, the California District Court of Appeals seems to have made an effort to explain that decision in the later case of Hewett v. Linstead, 49 Cal.App.2d 607, 122 P.2d 352, 354 where the court, after describing certain decisions referred to in the Monk case, said:
“These cases established the rule to be that where a distributee is ignorant of the existence of an heir, * * * and all statutory notices have been given, there has been no ‘mistake’ that will warrant relief under section 2224 of the Civil Code.” (Emphasis mine.)
Later, in the same opinion, the court said:
“Although there is some confusion in the cases, we agree with plaintiffs that the better rule is that where a legatee knows of the existence of other heirs, and, for the purpose of defrauding such heirs and benefiting himself, fails to notify the court of the existence of such heirs, and knowingly files false petitions with the court representing there are no such heirs, he is guilty of extrinsic fraud warranting the imposition of a trust on the fraudulent distributee’s interest.” (Emphasis mine.)
Like the trial judge, I do not think it was necessary for Vivian to have had (in the probate proceedings) any specific intent or purpose to defraud, or deprive, plaintiff of her inheritance. Whether she had such intent, or not, the result was the same. 30A Am.Jur., sec. 761, supra, Note 16, sec. 791, Note 19, sec. 784, sec. 18, Note 3. There was no adversary trial of any estate claim by plaintiff, and she was the object of extrinsic, if not intentional, fraud. Under the undisputed circumstances of the present case, plaintiff was without actual notice of her father’s death, or of the administration of his estate, and was as effectively and as completely prevented from appearing therein and having her claim to a child’s share of said estate adjudicated (30A Am.Jur., supra, sec. 26, Note 2), as if the administration proceedings had been *203conducted under the name of a fictitious intestate. For such a case, see Weyant v. Utah Savings & Trust Co., 54 Utah 181, 182 P. 189, 9 A.L.R. 1119, 1130. The ineffectiveness of the probate court’s final decree as a bar to plaintiff’s obtaining her rightful interest is due more to the fact that she (in whose existence Vivian had strong reason to believe) was not a party to the probate proceedings, than to bad faith on Vivian’s part in not apprising said court of her existence. As said in In re Riley, 120 Minn. 210, 139 N.W. 361, 365, L.R.A.1916D, 7, the use of the term “fraud” in such connection “is perhaps unfortunate * * * The “resulting fraud” of which the trial court found Vivian guilty (whether or not that be an accurate, or acceptable, term) is in the general category of “constructive fraud” (see Title 15, O.S.1951 § 59; In re Arbuckle’s Estate, 98 Cal.App.2d 562, 220 P.2d 950, 23 A.L.R.2d 372, 378; 23 Am. Jur., “Fraud and Deceit”, sec. 4) in which fraudulent intent is unnecessary. DeMoss v. Rule, 194 Okl. 440, 152 P.2d 594.
Nor are any of the Oklahoma cases cited by the defendants in conflict with our decision in this case. In O’Neill v. Cunningham, 119 Okl. 157, 244 P. 444, 447: “There * * * (was) no suggestion in the record that * * * (plaintiffs) did not know of the death of the deceased, or that an administrator had been appointed.” Calkin v. Wolcott, 182 Okl. 278, 77 P.2d 96, involved a district court attack upon certain orders previously entered by the county court in guardianship proceedings. There, we determined that plaintiff’s allegations of fraud in no way showed that there had been no “day in court”, or fair hearing, as to the matters that the alleged fraud concerned. In that case, the ward’s rights were before the county judge when he examined into, and approved, the accounts of the former guardian; while here, plaintiff was neither known to, nor present in, the probate court, nor was she represented by any agent or conservator of her rights. In fact, as already indicated, there was not only no one to apprise the probate judge of her rights, but it may be inferred from the evidence that there was no one to disclose to him, as a fact (as distinguished from rumor or hearsay), that such a person ever existed. Nor can what this court said concerning the absence of fraud on the part of Mrs. Mcjunkin’s aunts and uncles in not apprising the court of her existence in Gassin v. McJunkin, 173 Okl. 210, 48 P.2d 320, be of any controlling importance here, in the absence of any claim or showing that those aunts and uncles were more than mere heirs, and that there was extrinsic fraud by a fiduciary as Mrs. Phillips, the administratrix was (in law) to the plaintiff in this case. Hewitt v. Hewitt, supra. The fact that no statute requires the giving of actual, or personal, notice to the missing heir is no defense to an administra-trix or personal representative. Morris v. Mull, 110 Ohio St. 623, 144 N.E. 436, 39 A.L.R. 323, 327. In Eaves v. Busby, Okl., 268 P.2d 904, we applied the rule quoted therein from Smith v. Kimsey, 192 Okl. 618, 138 P.2d 94, which imputes to a party, allegedly defrauded, notice of the fraud, from the date he has the means of discovering it; but, in the present case, the trial court held in substance and effect, that plaintiff had no such means for at least one reason, i. e., she was unable to discover “her true name or identity * * * (In this fact also, lies a material distinction between this case and Hollingshead v. Hollingshead, 79 Okl. 292, 193 P. 412, in which plaintiffs resorted to equity, without attempting to show why they had not pursued their remedy at law). It is thus obvious that the rule, whose application was decisive in the Eaves case, does not apply here, and that no period of limitation began to run against plaintiff until she could, by the exercise of reasonable diligence, have ascertained her true identity and discovered the constructively fraudulent final decree in the Cotton County probate case (No. 1007, supra). In this connection, notice Gerlach v. Schultz, supra. The trial court found that plaintiff did not discover the fraud involved “until about sixty days before she filed this suit”, and, in effect, held plaintiff not guilty of indiligence for *204not having- instituted it more than two years before it was ’commenced. See Tit. 12 O.S. 1951 § 95, Third paragraph. Neither such findings, nor said court’s rulings that the action was not barred by limitations, or laches, can be said to be clearly against the weight of the evidence, or contrary to law. They must therefore be upheld.
With reference to the claimed application of the doctrine of caveat emptor to Cities Service’s purchase, at guardianship sale, of its oil and gas lease on what was ostensibly an undivided two-thirds interest in the Section 17 land, I also agree with the opinion filed herein by Justice BERRY. Defendants’ undisputed evidence shows that Cities Service was a bona fide purchaser of said lease for value without actual notice of any defect in Betty’s and Wayne’s title to the entire interest, which said sale purported to cover. Nor do I think that Tom Huff, their guardian’s attorney, was such an agent of said Company as to charge, or impute, it with knowledge of what Art Smith testified he had told Huff about Dewey Smith’s “missing heir” (the plaintiff). In this connection, see Pyeatt v. Estus, 72 Okl. 160, 179 P. 42, 4 A.L.R. 1570, 1578; and cases cited in the Annotations at 4 A.L.R. 1592, and 38 A.L.R. 820; Am. Jur., Vol. 5, “Attorneys at Law”, secs. 74, 75, Vol. 2, “Agency”, secs. 371, 372, Vol. 55, “Vendor and Purchaser”, séc. 695. This case is different from In re Riley, 120 Minn. 210, 139 N.W. 361, 365, L.R.A.1916D, 7, where there was an opinion of a “Title Examiner” on record clearly pointing out to May Pearson’s attorney the duration of the easement involved.
This court has never given unlimited application of the doctrine of caveat emptor to all kinds of so-called “judicial” sales. In addition to Moroney v. Tannehill, cited in the majority opinion, see Atkinson v. King, 93 Okl. 37, 219 P. 914; Hammert v. McKnight, 132 Okl. 14, 269 P. 289, 68 A.L.R. 649. See also Riley v. Martinelli, 97 Cal. 575, 32 P. 579, 581, 21 L.R.A. 33, and 30A Am.Jur., “Judicial Sales”, secs. 180-182, both inclusive. Berry v. Tolleson, 68 Okl. 158, 172 P. 630, 632, points out the value, in obtaining fair prices for minor’s interests, of according a bona fide purchaser at a guardian’s sale, the same protection other bona fide purchasers enjoy. As far as concerns a judgment creditor and purchaser, who is a party to the proceedings in which the sale is ordered, and (according to some authorities) his assignee, at least one court has said that the doctrine is applied to that party because, instead of true value, he gives only credit on an antecedent debt, and, for that, reason is not a true bona fide purchaser (Riley v. Martinelli, supra); but this court has said it is because “a knowledge of the irregularities in the procurement of the judgment is imputed to him because of the position he occupied in the action.” Harjo v. Johnston, 187 Okl. 561, 104 P.2d 985, 996. Assuming, without deciding, that both bona fide purchaser, and his assignee, must take cognizance, at his peril, of what the sale proceedings do, or do not, provide (Sheldon v. Deal, 196 Okl. 531, 166 P.2d 771, 773; Charles v. Roxana Petroleum Corp., 8 Cir., 282 F. 983) and of any defects therein (Harjo v. Johnston, supra), does proper application of the doctrine of caveat emptor extend to withholding from either of them the protection ostensibly offered by a decree, or judgment, in previous litigation (to which they were not parties) that is apparently valid, final, and adjudicative of the quantum of the interests involved in the sale? Here, the final decree in probate cause No. 1007, supra, which Cities Service’s Chief Title Attorney, Roy Johnston, testified (that in his examination of an abstract to the property in his office at Bartlesville) h'e considered “sufficient” evidence of the quantum of the interests of Vivian Phillips and her children, Betty and Wayne (in the Section 17 land) was valid on its face, and, being unappeal-ed from, was ostensibly, and as far as a title examiner usually knows, final and conclusive. Said decree had all of the force, effect and legal presumptions that accompany district court judgments. Calkin v. Wolcott, and Sheldon v. Deal, both supra; Scott v. Gypsy Oil Co., 112 Okl. 13, 239 P. 887. As hereinbefore noted, said decree was, or *205contained, a solemn and specific court adjudication that Vivian, Wayne and Betty were Dewey Smith’s sole and only heirs. There is no issue (and presumptively no doubt) as to Cities Service having paid the lease’s full current market value at the time of its acquisition. Being a stranger to probate cause No. 1007, supra, it was entitled to accept said cause’s final decree at its “face” value. See Murphy v. Walkup, Okl., 258 P.2d 922; Harjo v. Johnston, supra; Pettis v. Johnston, 78 Okl. 277, 190 P. 681. In the last cited case, this court referred to the fact that bona fide purchasers are equity courts’ “most especial favorites”, (Pacific Reporter at page 692) and said that where they have purchased property under a judgment “not void on its face” they “ * * * will be protected against either a motion to vacate or a bill in equity to annul or evade such judgment”, although extrinsic evidence would show want of jurisdiction in the court rendering the judgment. The reason given for this by some courts, as explained in that case, is that “ * * * public policy' will not permit the introduction of extrinsic evidence to overcome that which it treats as absolute verity.” And while this court there said it did not “subscribe to the doctrine that public policy closes the door absolutely” against such evidence, it held that “public policy shuts the door against” it to the extent of .striking down “the rights of innocent third parties.” I have carefully examined the record in this case, and as I view it, it contains insufficient evidence to overcome the presumption (supported by defendants’ uncontradicted direct proof) that Cities Service Oil Company was a bona fide purchaser of the oil and gas leasehold on the Section 17 land. In this case, as in Murphy v. Walkup, supra, the burden shifted to plaintiff to prove that said Company had notice of facts, which if reasonably developed by inquiry, would have revealed plaintiff’s existence. She failed to-elicit, or introduce, evidence sufficient to discharge that burden. Consequently, it is my opinion that the trial court’s judgment is clearly against the weight of the evidence, and contrary to law, with respect to the efficacy of said Company’s lease as to plaintiff’s interest; and, accordingly, that said court erred in holding said lease a nullity as to it.
In accord with the foregoing views, I join my Associates concurring in the opinion promulgated herein under the name of BERRY, J.