Estate of Whelan

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 519 OPINION

An executor appeals from a judgment of the superior court denying his petition to modify an order fixing inheritance tax.

Since the petition was filed more than six months after the order was made, the statutory relief for mistake (Code Civ. Proc., § 473) is unavailable. Hence the executor argues that the mistake in the judgment was extrinsic and may be set aside on principles of equity.

The facts are essentially undisputed. The decedent died on January 7, 1963, leaving an estate in excess of $600,000. Her husband had died less than five years prior, leaving his entire estate to the decedent. Under Revenue and Taxation Code section 14071, the transferees were entitled to an inheritance tax credit for inheritance taxes paid at the death of decedent's husband.

The executor made no claim for this credit although his inheritance tax affidavit showed that the decedent was the widow of a man who had died less than five years earlier. The order fixing inheritance tax, made August 4, 1964, did not allow any credit for previously taxed property. The mistake was not discovered until April 1967.

The petition for modification, as amended May 15, 1968, offers no explanation for the failure of the executor either to claim the credit prior to the computation of the tax, or to object to the report of the inheritance tax appraiser before the court made its order, as provided in Revenue and Taxation Code sections 14506-14510.

(1) An order fixing inheritance tax has the effect of a civil judgment (Rev. Tax. Code, § 14672). Hence after the time for modification has expired it may only be attacked in equity where the mistake is extrinsic rather than intrinsic. (Westphal v.Westphal (1942) 20 Cal.2d 393, 397 [126 P.2d 105].) The mistake is extrinsic where it deprives a party of the opportunity to present his case in court. (Westphal v. Westphal, supra, at p. 397.)

In a case analogous to the present case, Lennefelt v.Cranston (1964) 231 Cal.App.2d 171 [41 Cal.Rptr. 598], the executrix sued to set aside an *Page 520 order fixing inheritance tax on the ground that she had, on the advice of her attorney, failed to include facts in the inheritance tax affidavit which would have entitled the benficiaries to more favorable tax treatment. In affirming a judgment denying any relief, the appellate court said at page 177, "[W]here an attorney knows the facts but mistakenly concludes that they are of no legal significance and does not present them at the hearing of the matter in question, his mistake is intrinsic and not extrinsic."