Elkins v. Vana

• Citation: 541 P.2d 585,25 Ariz.App. 122
• Decision Date: 28 October 1975
• Docket Number: CA-CIV,No. 2,2
• Parties: Charles J. ELKINS, Appellant, v. Donna J. VANA, Appellee. 1833.
• Court: Court of Appeals of Arizona

Page 585

541 P.2d 585

25 Ariz.App. 122

Charles J. ELKINS, Appellant, v. Donna J. VANA, Appellee.

No. 2 CA-CIV 1833.

Court of Appeals of Arizona, Division 2.

Oct. 28, 1975.

Rehearing Denied Nov. 26, 1975.

Review Denied Dec. 16, 1975.

J. Emery Barker, Tucson, for appellant.

Wolfe & Harris, P.A. by Sidney B. Wolfe, Phoenix, for appellee.

OPINION

HOWARD, Chief Judge.

Appellee sued appellant in the court below for a declaratory judgment. The subject matter of this lawsuit is six promissory notes. The issues below were whether there had been a valid inter vivos gift of the promissory notes and whether the underlying debts which they evidenced had been satisfied. The trial court found in favor of appellee and this appeal ensued.

The reporter's transcript for the first three days of this trial was lost and we have in its stead a statement of the evidence approved by the superior court pursuant to Rule 75(k) of the Arizona Rules of Civil Procedure, 16 A.R.S.

The parties are the same as those in the case of Vana v. Elkins, 20 Ariz.App. 557, 514 P.2d 510 (1973). However, the notes involved in this case are not the same.

Appellee is the daughter by a previous marriage of Elsie E. Elkins, the deceased wife of appellant. Appellant is the maker on all of the promissory notes which are payable to the order of Elsie E. Elkins and by their terms are not due until appellant's death. The notes all bear interest and under the will of Elsie Elkins appellant is the income beneficiary of the estate during his lifetime.

In 1969 all the notes were endorsed by the deceased and one of these notes carried the following additional statement in the handwriting of the deceased: 'After my death these notes are the property of Miss Donna Joan Vana or if she marries, her marriage name.'

The trial court made findings of fact and conclusions of law and found, inter alia, that a valid inter vivos gift had been made prior to the endorsement of the notes in 1969 and that the qualified endorsement on the notes had no force and effect. It further found that the notes had not been satisfied as claimed by appellant and were due and payable as expressed on the face thereof; and that appellee was not entitled to a money judgment since the notes were not yet mature. ¹

Appellant claims there was insufficient evidence to prove a valid gift inter vivos and that the trial court exceeded its jurisdiction in its declaratory judgment.

Preliminary to deciding the issues in this case we must consider appellee's contention that lack of a transcript for the first three days of trial precludes appellate review.

Rule 75(k), Arizona Rules of Civil Procedure provides:

'If a stenographic report of the evidence or proceedings at a hearing or trial cannot be obtained by reason of the death, disability or inefficiency of the reporter taking the evidence or proceedings, or the loss or destruction of the notes thereof, the appellant may prepare a statement of the evidence or proceedings from the best available means, including his recollection, for use Instead of a stenographic transcript. The statement shall be served on the appellee who may serve objections or propose amendments thereto within ten days after the service upon him. Thereupon the statement, with the objections or proposed amendments, shall be submitted to the superior court for settlement and approval and as settled and approved shall be included by the clerk of the court in the record on appeal.' (Emphasis added)

A statement of the evidence was prepared by appellant and served upon appellee. Appellee did not propose any amendments to the statement but instead attacked the procedure in the trial court on the basis that, 'To resolve a case such as this one where the case turned on the oral testimony and documentary evidence, an attempt to decide the case upon a stipulated statement of evidence is an impossible situation and inadequate.'

The trial court, by minute entry, stated:

'The Court therefore settles and approves Appellant's Statement of Evidence as submitted insofar as it does not disagree with the findings of fact and conclusions of law set out in the Minute Entry order dated July 3, 1974, and the conclusions of the Court as expressed in its Minute Entry order dated October 1, 1974, . . .'

This minute entry, signed by the judge, was followed by an order also signed by the judge which stated that appellant's statement of the evidence 'is, settled and approved by this court as submitted by the Appellant, Charles J. Elkins, to be included by the Clerk of this Court in the Record on Appeal in the above captioned matter.'

Rule 75(k) of the Arizona Rules of Civil Procedure provides for the use of a statement of the evidence instead of a stenographic transcript. The rule contemplates that the court shall settle and approve it. The minute entry order wherein the court attempts to approve it 'insofar as it does not disagree with the findings of fact and conclusions of law set out in the Minute Entry order dated July 3, 1974, and the conclusions of the Court as expressed in its Minute Entry order dated October 1, 1974' does not settle anything. This however, is cured by the subsequent written order of the court wherein it unqualifiedly approved appellant's statement of the evidence.

Rule 75(k) clearly sets forth that this statement is part of the record and is to be used instead of a stenographic transcript and for that reason appellee's contention is without merit.

What is necessary to make a valid inter vivos gift of a negotiable instrument? The essential elements of a gift inter vivos are that the donor manifest a clear intent to give to the party claiming as donee, and give to the latter before death, full possession and control of the property. O'Hair v. O'Hair, 109 Ariz. 236, 508 P.2d 66 (1973). Furthermore, gifts inter vivos of unendorsed negotiable notes of a third person may be made by simple delivery of the notes, the equitable interest therein vesting in the donee by delivery and acceptance. Brashears' Adm'r. et al v. Oder, 291 Ky. 817, 165 S.W.2d 801 (1942); Rothwell v. Taylor, 303 Ill. 226, 135 N.E. 419 (1922); 38 C.J.S. Gifts § 54, p. 840. As far as the burden of proof is concerned, in Arizona it has been established that less evidence is required to establish a gift from a parent to a child than from a stranger to a stranger. Armer v. Armer, 105 Ariz. 284, 463 P.2d 818 (1970).

Turning our attention to the facts in the case at hand we find that on June 29, 1963, the deceased wrote a letter to her daughter which stated among other things:

'About the notes. The notes are made out to me and at his death the money will come out of the estate before anything. If I should die first, then you have the notes and you can show them to the executors and the money will come out of the estate first before it is divided. Our will says it will be divided in five. I am not worrying about the notes at all. They are good. In case of Charles death first then you can give them to me and things will come out right. I already consulted a lawyer about that. Your holding them only means that in case of my death, then no one can come and take them and tear them up. It doesn't mean that the money will be yours at all. It only means that it will come out of the estate before any of it is paid out.' (Emphasis added)

Appellee testified that her mother gave her the promissory notes in June of 1963. Also admitted into evidence was appellee's affidavit stating that the notes were given to her in 1967 as a gift from her mother Elsie E. Elkins, who personally handed them to her; that she gave them to her as an irrevocable gift and that appellee promised her mother that she would not seek to enforce the notes until after her death in order to avoid strife between her mother and Mr. Elkins.

Appellee also stated that in 1969 she went to her mother's home and had the notes endorsed because she was concerned over the difficulty she might later encounter in collecting the notes in the event of her mother's death.

Frieda Stoll, a friend of the deceased for thirty-two years testified that she had a number of conversations with the deceased concerning the existence of certain promissory notes the deceased had received from Charles Elkins in exchange for past loans. She further testified that in 1967 she knew the deceased had possession of the promissory notes from Charles J. Elkins and that they were kept by the deceased in her dresser drawer under some handkerchiefs. She also stated that she advised the deceased to give the notes to appellee for safekeeping and that at a later time the deceased confided in her that she...