American Borax Co. v. Carmichael

BARNARD, P. J.

This is an action to set aside a judgment. A demurrer was sustained without leave to amend and the plaintiffs have appealed from the judgment which followed.

The complaint, filed on August 20, 1952, alleges that in an action brought by Annie P. Carmichael a judgment was rendered on November 16, 1950, quieting her title, as against these plaintiffs, to certain real property in Kern County; that said judgment was obtained on representations that American Borax Company (a California corporation) and the Schorrs had no interest in said property, whereas Carmichael knew that such statements were not true; that Carmichael had, on August 4, 1943, and for a valuable consideration, executed and delivered several unrecorded deeds conveying portions of the property to American Borax Company; that in addition Carmichael had on July 5, 1941, given one John L. Keller an option to purchase the property on certain conditions; that Keller had assigned his interest in this option to the Borax Company, which had subdivided the property; that no notice of default had been given as provided in the option agreement; that the Borax Company was served with a copy of the summons and complaint by delivering same to the Secretary of State, and the directors or officers knew nothing of said action; that the plaintiff Harry Schorr relied on representations made to him by the attorney for Carmichael to the effect that the Borax Company had no title to Lot 207 at the time it was conveyed to them; that the plaintiffs first learned that such judgment had been obtained on fraudulent representations on August 1,1951; and that the plaintiffs are able to show that they “had” a valid interest

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in said real property, as a defense to the action in which the judgment was rendered. Copies of the unrecorded deeds and of the option agreement, which was recorded, are attached to the complaint.

The appellants contend that extrinsic fraud was alleged “as to at least part of the plaintiffs”; that the complaint alleges that the attorneys for Carmichael represented to the Schorrs that the Borax Company had no title to Lot 207 (which the corporation had agreed to sell to them), and because of such misrepresentation the Schorrs made no defense to the former action; that the complaint alleges that the Borax Company was served in the quiet title action by mailing summons to the Secretary of State, and that the directors or officers of the corporation knew nothing of said action; that the plaintiffs could amend and offered to amend by alleging that the affidavit filed in the former action, on which the order permitting service upon the Secretary of State was made, was fraudulent in that Carmichael knew the whereabouts of John L. Keller and knew that he was an officer of the Borax Company; and that the fact that the Borax Company did not have actual notice of the former action, coupled with the fraud of Carmichael in obtaining the judgment when she did not have title to all of the property, brings this case within the rules set forth in