Title: Arizona Title Guarantee & Trust Co. v. Wagner
Citation: 251 P.2d 897, 75 Ariz. 82
Docket Number: 5495
State: Arizona
Issuer: Arizona Supreme Court
Date: December 31, 1952

75 Ariz. 82 (1952) 251 P.2d 897 ARIZONA TITLE GUARANTEE &amp; TRUST CO. v. WAGNER. No. 5495. Supreme Court of Arizona. December 31, 1952. *83 Shimmel, Hill &amp; Hill, and Harry J. Cavanagh, of Phoenix, for appellant. Harold R. Scoville, of Phoenix, for appellee. UDALL, Chief Justice. This is an appeal from a judgment determining that plaintiff-appellee is the owner and entitled to the possession of 16 one thousand dollar Casa Grande School District bonds. The Arizona Title Guarantee &amp; Trust Company, defendant-appellant, brings this appeal individually and as Special Administrator of the Estate of Jesse O. Wagner, deceased. The parties will be designated as they appeared in the trial court. The plaintiff is the daughter of Mrs. Alice R. Wagner and the stepdaughter of decedent, Jesse O. Wagner. The marriage of Alice R. Wagner and Jesse O. Wagner took place in 1940. Plaintiff, whose name was changed to Wagner at decedent's request, was then seventeen years old and in the last year of high school. Mrs. Wagner, before the marriage, was employed as assistant superintendent of a private hospital in Cleveland, Ohio, which enabled her to provide comfortably for herself and plaintiff. Decedent, who was a wealthy man, wanted to provide for Mrs. Wagner and plaintiff, and therefore at the time of the marriage had Mrs. Wagner give up her employment and give notice to tenants to vacate an apartment that was a source of income to her. After the marriage the family at first made their home in the apartment in Cleveland, Ohio; later upon Mr. Wagner's retirement from active business management they moved to Phoenix and established their legal residence in Arizona. Early in the year 1950 Mrs. Wagner instituted, in the superior court of Maricopa county, a suit for divorce against her husband. Mr. Wagner took his life on April 13, 1950. The plaintiff, after becoming a member of the family of Mr. Wagner, was always *84 treated by her stepfather with the same love and affection as though she were his own flesh and blood. She became very much attached to him, reciprocating his love. One cannot read this record without being impressed that decedent considered he had a paternal duty to not only support the plaintiff but to make provision for her future financial security. At no time during Mr. Wagner's lifetime did the plaintiff ever have a banking account of her own. Even when she was in the armed forces as a nurse her monthly savings were sent to decedent and the money was deposited to the Jesse O. and Alice R. Wagner checking account. In other words, she used her stepfather as a banker and relied implicitly upon him for advice and counsel in financial matters. Incidentally, decedent Wagner was painstaking in keeping a current record of all his business transactions and the pertinent entries were admitted in evidence. The bonds that are the subject of this suit were purchased by decedent on February 7, 1950, through the brokerage house of Refsnes, Ely, Beck &amp; Co. of Phoenix. They are bearer bonds and were found by the defendant, special administrator, in a safe-keeping box at the Westward Ho Hotel (where Mr. Wagner then resided) a few days after his tragic death. It appears to be conceded that these school district bonds were purchased with the proceeds of certain U.S. Government Bonds, series E, theretofore registered in the name of the plaintiff, Jeanne A. Wagner. These government bonds were endorsed, surrendered and cashed by plaintiff for $18,915 on February 1, 1950, with other bonds owned by her mother and the proceeds thereof are readily traceable into the special bank account of Mr. Wagner's upon which a check was drawn by him to pay for said district bonds. At the outset it should be pointed out that the plaintiff does not assert ownership of the school district bonds in question on the theory of a gift of them to her by decedent. Rather, her right of ownership rests on the claim that such bonds were purchased by decedent as her agent from the proceeds of the U.S. Savings bonds that had been previously given to her as a gift from him. The defendant assigns as error: (1) the action of the trial court in admitting in evidence communications made to the witness Alice R. Wagner by decedent during the course of their marriage; (2) the holding of the trial court that, as a matter of law, there was a valid gift by decedent J.O. Wagner, to the plaintiff; the contention being that without the testimony of Mrs. Wagner there was insufficient evidence to establish the elements of valid gift as to the savings bonds. We shall discuss these points in the order named. The case was tried to the court sitting without a jury. The trial court proceeded cautiously, the ruling at the beginning of *85 the trial being that it would hear the testimony of Mrs. Wagner subject to a motion to strike at the conclusion of the case. After all of the evidence was in the court overruled previous objections and admitted her evidence in its entirety. The statute assertedly violated by this ruling is subsection 3 of Section 23-103, A.C.A. 1939, which provides in part: Certain exceptions, not applicable here, follow the above-quoted excerpt. The origin of the rule that neither party to a marriage can be a witness in favor of or against the other, embodied in this subsection of the statute, is of such antiquity that it is "well-nigh undiscoverable". Commonwealth v. Allen, 191 Ky. 624, 231 S.W. 41, 42, 16 A.L.R. 484. Engrafted into the established common-law rule is the doctrine that all private and confidential communications between husband and wife are privileged and cannot be divulged by either when on the witness stand. 58 Am.Jur., Witnesses, § 375. The statute quoted applies the prohibition to "any communications" without words of limitation or modification. The defendant strongly contends that the statute is broader than the common-law rule and applies to all communications between husband and wife without regard to their confidential or non-confidential nature. While the defendant is not without authority for its position the great majority of the text writers and reported cases hold such statutes to be enactments of the common-law rule. A leading case, wherein the statute was similar to ours in that only the words "any communication" were used, is Sexton v. Sexton, 129 Iowa 487, 105 N.W. 314, 315, 2 L.R.A.,N.S., 708. The Supreme Court of Iowa stated: An Annotation, "Conversations between husband and wife relating to property or business as within rule excluding private communications between them" in 4 A.L.R.2d 835, 843, states the rule under statutes purporting to exclude all communication, as follows: Mr. Wigmore, in his treatise, urges the majority rule. See also 58 Am.Jur., Witnesses, §§ 376, 380; 70 C.J., Witnesses, § 511. We approve of the statements of law contained in the foregoing case and text quotations and hold that Dean Wigmore has laid down a correct rule relative to the meaning of the phrase "any communication" found in statutes similar to our section 23-103, supra, as well as succinctly stating the circumstances under which a husband or wife may testify without violating the privilege that protects confidences arising out of the marital relationship. The rulings of the trial court clearly indicate its knowledge of these governing principles. We next consider whether the plaintiff established by competent evidence a valid gift to her by decedent of the U.S. *88 savings bonds from the proceeds of which the bonds in question were purchased. Section 58-102, A.C.A. 1939, provides for different ways of making a valid, enforceable gift. No claim is made that there was either an instrument duly acknowledged and recorded or that there was a will, duly proved and recorded. The validity of the gift must be established by the last portion declarative of the common law which requires, as we held in the case of McNabb v. Fisher, 38 Ariz. 288, 299 P. 679: There can be no question of the sufficiency of the intent of deceased to make the gifts as is evidenced by his own records, the testimony of plaintiff and her mother, and by the face of the bonds themselves. Defendant tacitly admits this by its argument. However, the adequacy of the delivery is very much at issue. It seems to be well supported by authority and the cases that no absolute rule can be laid down as to what will constitute a sufficient delivery to support a gift in all cases, for in each case the character of the delivery requisite to sustain the transaction as a gift will depend very largely upon the nature of the subject-matter of the gift, and the situation and circumstances of the parties. An excellent case that illustrates the problems involved in the delivery of gifts of securities of value, where, as here, such is made among members of the same family, is Shepard v. Shepard, 164 Mich. 183, 129 N.W. 201, 209. A good statement of the case is made by the court itself in summary. The court in holding that was a valid gift stated: A case similar to the instant one in that the bonds in question, which were registered in the donee's name, were kept by the donor, a doctor, in his own safety deposit box for the donee, a nurse who had been a faithful and trusted assistant for fourteen years, is Meduna v. Dayton's Estate, 121 *90 Neb. 402, 237 N.W. 303, 304. The court, after citing authorities, held: See also Tucker v. Tucker, 138 Iowa 344, 116 N.W. 119, McNally v. McAndrews, 98 Wis. 62, 73 N.W. 315. There are two enlightening law review articles on the subject. See 21 Marquette Law Review 57; 6 Fordham Law Review 106. In applying these sound legal principles to the facts of the instant case we believe no good purpose would be served by detailing all of the evidence relative to the gift to plaintiff of these savings bonds. We merely point out that the record is clear that decedent proclaimed to his friends, neighbors and relatives, as well as to his wife and stepdaughter, the fact that he was making and settling such gifts upon her. Under these circumstances it would appear that the privilege attaching to a confidential communication between husband and wife was destroyed where such disclosures were made to third parties. Further evidence that the donor (decedent) recognized that he had previously relinquished, and the donee (plaintiff) had acquired dominion and control of the bonds in question is found in plaintiff testifying without contradiction that on several occasions she accompanied her parents to the Valley National Bank where the bonds were kept in the family lock box and that decedent, more than once, "would hand me the bonds and ask me if I wanted to look them over and see if they were in order" before placing them back in the safe; furthermore that shortly before these bonds were cashed they were brought to their home and at that time she again had them in her physical possession. The plaintiff stated it was the decedent who advised her to surrender her government bonds paying a low interest rate at maturity in order that he might reinvest the proceeds for her in tax-exempt school district bonds upon which interest was paid semi-annually. The proof, contrary to defendant's contention, does not entirely hinge on the testimony of the wife, Alice R. Wagner, as the record is replete with evidence of several disinterested witnesses corroborating the testimony offered by plaintiff that decedent was purchasing blocks of government bonds for plaintiff, and even more impelling is the documentary evidence, much of it in the handwriting of Jesse O. Wagner. All of this evidence leads unerringly *91 to but one conclusion, i.e., that the bonds in question were validly given to the plaintiff by her stepfather. The case was well and carefully tried by the learned trial court and we hold that it committed no error in its rulings on the admission in evidence of the testimony of Alice R. Wagner. The judgment entered was manifestly correct in that it is fully supported by the evidence and does justice between the parties. Judgment affirmed. STANFORD, PHELPS, DE CONCINI and LA PRADE, JJ., concur.