Gross v. Needham

• Decision Date: 07 September 1960
• Citation: 184 Cal.App.2d 446,7 Cal.Rptr. 664
• Court: California Court of Appeals Court of Appeals
• Parties: June GROSS, Plaintiff and Respondent, v. Danford C. NEEDHAM, Defendant and Appellant. In the Matter of the ESTATE OF R.E. GILLIGAN, Deceased. Danford C. Needham, Administrator and Appellant, June Gross, Petitioner and Respondent. Civ. 24404, 24451.

Page 664

7 Cal.Rptr. 664

184 Cal.App.2d 446

June GROSS, Plaintiff and Respondent, v. Danford C. NEEDHAM, Defendant and Appellant In the Matter of the ESTATE OF R.E. GILLIGAN, Deceased Danford C. Needham, Administrator and Appellant June Gross, Petitioner and Respondent.

Civ. 24404, 24451.

District Court of Appeal, Second District, Division 1, California.

Sept. 7, 1960.

Kenny, Morris & Ibanez, Richard Ibanez, Los Angeles, for appellant.

Gordon, Kidder & Price, Marshall E. Kidder, Los Angeles, for respondent.

LILLIE, Justice.

The present matters, one a civil proceeding and the other in probate, were consolidated for trial at pre-trial conference because of evidence common to both causes; separate judgments were rendered for plaintiff and petitioner, June Gross. Pursuant to stipulation, they have reached this court on a single reporter's transcript and one set of briefs and will be disposed of in such consolidated form.

In each proceeding the same persons are the litigants. June Gross (born Gilligan) is the half sister of Danford C. Needham (hereinafter referred to as Dan). When Dan was a child, his father died and his mother married Mr. Gilligan; June is the sole issue of that marriage, being 20 years younger than Dan. Upon her mother's death in 1939, June (then aged 12) went to live with her father at the home of her maternal grandmother in Los Angeles; she had little formal education, leaving school before completion of the eighth grade. Mr. Gilligan, was injured in 1945 and had to be hospitalized until his death in December of that year. While her father was in the hospital, June took up residence at Dan's home (likewise in Los Angeles), remaining there till August of 1948; during most of that period she was employed, paying Dan $10 per week for room and board. At that time her only close relatives were Dan, her paternal grandmother and two paternal aunts. June testified that her father once told her 'to count on Dan' in the event of any business transactions 'because he felt his aunts weren't quite capable' of handling such matters.

Decedent Gilligan left no estate other than approximately 167 desert lots with few improvements thereon in the Salton Sea area of Imperial County; referred to in the briefs as the Bombay Beach Tract, this property is the subject matter involved in both actions which arose from certain events occurring in 1948. In July of that year, one month after June became 21 years of age, and before any probate proceedings were initiated with respect to Mr. Gilligan's estate, a deed was executed by Dan and June as 'grantors' conveying the Bombay Beach Tract to themselves as 'grantees' in joint tenancy, which instrument was recorded nine days later. On September 27, Dan filed a petition in the Superior Court of Los Angeles County for appointment as administrator of Mr. Gilligan's estate; letters were issued to him the following month. The Bombay Beach property, originally appraised at $3,390, was reappraised prior to litigation at $30,230.

On June 17, 1958, almost ten years later, the present actions were commenced by June, who had married Floyd Gross in April of 1950. Subsequently (in 1951) June and her husband moved from California to New Mexico where he was employed by an agency of the Federal Government. The civil proceeding sought cancellation of the 1948 deed on the asserted grounds of fraud, duress and undue influence; it was further alleged that the falsity of certain representations by Dan was not discovered until approximately August of 1957. In the probate proceeding, the petition asked Dan's removal as administrator because of adverse interest and failure to render an accounting; when such accounting was filed, June by subsequent petition sought revocation of Dan's letters on the basis of her preferential right thereto (Probate Code, Sections 450 et seq.). The trial court ordered cancellation of the 1948 deed on all the grounds alleged, and revoked Dan's letters because of his adverse interest, failure to render a proper accounting and June's preferential right to serve as Mr. Gilligan's representative. From these adverse judgments, following denial of a new trial, Dan has appealed.

Appellant's assignments of error may be stated thus: with respect to the civil proceeding, (1) the action is barred by the statute of limitations because (2) the complaint does not allege the circumstances under which the fraud was discovered nearly nine years after its alleged perpetration) and (b) the court did not make a finding with respect thereto, and (2) there is no substantial evidence to support the findings and judgment; with respect to the probate matter, no legal basis exists for the administrator's removal on the grounds as found below.

In the complaint to cancel the 1948 deed, it was alleged, among other things, that 'about the year 1946, when plaintiff was approximately 18 years of age, both parents being deceased, she moved into the home of the defendant (whose blood relationship was previously set forth) and resided with him and his family until approximately 1948 or 1949, being self-supporting during this period but being of limited formal education, relied upon the advice and judgment of the defendant in business and other matters'; there then follow allegations of evidentiary and ultimate facts which pertain to the fraud, undue influence and duress exerted by the defendant; it is then alleged that 'the plaintiff did not discover the falsity of the representations made to her by the defendant, as aforesaid, and did not discover that she had, by the execution and delivery of said Grant Deed (Joint Tenancy) dated July 24, 1948, divested herself of her right, title and interest in the said real property until about August, 1957' when notification was received that a sale of the property was contemplated 'in connection with the matter of the Estate of Robert E. Gilligan.' Appellant did not demur to the complaint; instead and by way of answer, he affirmatively pleaded the bar of sections 338(4) and 318 of the Code of Civil Procedure. He now argues, citing such cases as Lady Washington Consol. Co. v. Wood, 113 Cal. 482, 45 P. 809; Consolidated Reservoir & Power Co. v. Scarborough, 216 Cal. 698, 16 P.2d 268, and Daily Telegram Co. of Long Beach v. Long Beach Press Pub. Co., 133 Cal.App. 140, 23 P.2d 833, that to prevail in an action based on the exception to the controlling statutes (Code Civil Procedure, Sections 338(4) and 343, three and four years respectively), the plaintiff must allege and prove facts showing the time and surrounding circumstances of the discovery of the cause of action upon which he or she relies; this, it is contended, respondent failed to do.

As for the asserted applicability of Section 343, Code of Civil Procedure, the claim comes too late since it was neither pleaded nor advanced upon the trial (O'Keefe v. Aptos Land & Water Co., 134 Cal.App.2d 772, 780, 286 P.2d 417, 54 A.L.R.2d 462); furthermore, Section 318 (pleaded along with Section 338(4)) does not apply 'where the case presents a simple question of fraud or mistake.' Cella v. Cosgro, 115 Cal.App.2d 816, 820, 253 P.2d 57, 60. Under the circumstances, further comment on the point would serve no useful purpose.

Coming now to the argument that the instant appeal is controlled by the principles discussed in Lady Washington, Consolidated Reservoir and Daily Telegram, supra, in all three cases a demurrer had been successfully intereposed to the complaint and each decision was properly concerned only with the problem as to whether the pleading requirement had been met respecting the exception to the three-year limitation of Section 338(4) of the Code of Civil Procedure and not, as here (and as pointed out in Consolidated Reservoir at page 705 of 216 Cal., at page 270 of 16 P.2d), with a trial on the merits and the accompanying claim that any defect in the complaint had been cured by evidence adduced upon such trial (see also Buxbom v. Smith 23 Cal.2d 535, 543, 145 P.2d 305). The purpose of the pleading requirement, it has been declared, 'is to afford the court a means of determining whether or not the discovery of the asserted invasion was made within the time alleged, that is, whether plaintiffs actually learned something they did not know.' Bennett v. Hibernia Bank, 47 Cal.2d 540, 563, 305 P.2d 20, 35. In the application of this rule, the court goes on to say, 'it is important to recognize the distinction between cases where a plaintiff is under a duty to inquire and those in which he has no such duty * * * for example, because of the existence of a fiduciary relationship, (in which event) a plaintiff need not disprove that an earlier discovery could have been made upon a diligent inquiry but need show only that he made an actual discovery to hitherto unknown information within the statutory period before filing the action.' 47 Cal.2d at page 563, 305 P.2d at page 35. Appellant does not seriously contend that the facts constituting the confidential relationship are not specifically pleaded; although supporting evidence of the relationship is more detailed, respondent's lack of any formal education, the great disparity in the parties' ages, their close personal and blood relationship, and respondent's reliance upon appellant's advice and business judgment are set forth--and, while conclusionary allegations may be found therein, the pleading cannot be challenged on appeal in the absence of a special demurrer. Campbell v. Genshlea, 180 Cal. 213, 218, 180 P. 336. There is also an allegation that respondent did not discover the falsity of appellant's representations 'until about August, 1957.' The circumstances of the discovery, stated to be within approximately ten months prior to the filing of the action, are sufficiently alleged to meet the requirements of the relaxed rule mentioned in Bennett v. Hibernia Bank, supra, and numerous cases prior and subsequent thereto; thus, see Hobart v....