Jax v. Jax
| Citation | 243 N.W.2d 831,73 Wis.2d 572 |
| Decision Date | 12 July 1976 |
| Docket Number | No. 766,766 |
| Parties | , 19 UCC Rep.Serv. 1362 Leonard C. JAX, Appellant, v. Helen JAX, Respondent. (1974). |
| Court | Wisconsin Supreme Court |
Kay, Gissen & Hanson, Richland Center, for appellant.
David E. Nelson, Richland Center, for respondent.
This is an action to recover on a promissory note. The plaintiff, Leonard C. Jax, filed an amended complaint on April 11, 1973, alleging that the defendant, Helen Jax, had, on February 23, 1970, executed and delivered a promissory note in the amount of $1,000 payable in one year and bearing interest at the rate of 6 percent per annum. It was also alleged that Helen Jax had received the sum of $1,000 in cash in the form of a check issued by Goplin Realty, Inc., of Richland Center, Wisconsin. The complaint further stated that no part of the note had been paid and prayed for judgment on the note including interest plus attorney's fees, costs and disbursements.
In her answer, Helen Jax denied that she received the check as alleged. She also denied that she had executed and delivered to Leonard Jax a promissory note. The case was tried to the court on November 9, 1973.
The issues on the trial were whether Helen Jax had executed a promissory note in favor of Leonard Jax and whether, as consideration for that note, she had received $1,000 as a cash loan from Leonard Jax. Leonard Jax introduced into evidence a promissory note containing the alleged terms and bearing the signature of Helen Jax. He also introduced a $1,000 check issued by Goplin Realty, Inc., and payable to Leonard Jax and Helen Jax. The check bore the endorsements of both Leonard and Helen Jax and had been cashed.
The trial court found that Helen Jax had not signed the note and had not received the proceeds of the $1,000 check alleged to have served as the consideration for the note. It accordingly dismissed the plaintiff's claim and entered judgment for the defendant. We reverse and order a new trial on all issues.
The plaintiff and the defendant were divorced in November, 1966. During their marriage the couple operated a tavern located in Richland County. Leonard Jax sold the tavern on a land contract to Warren Schumacher. Part of the proceeds of that sale were, according to Leonard Jax, to be applied to the reduction of the mortgage on a house for Helen Jax's benefit. In February, 1970, before the amount due on the land contract had been fully paid, Warren Schumacher sold the tavern to Helen Jax. Goplin Realty, Inc., handled that sale. Mr. Schumacher paid the remaining amount due on the land contract to Leonard Jax on February 26, 1970, the same day that his sale of the tavern to Helen Jax was closed. Both transactions were completed at the same time with all parties present.
Leonard Jax testified that Helen Jax told him she wanted to buy the tavern from Mr. Schumacher and asked for $1,000 to purchase the inventory. Leonard Jax agreed to loan her the money. According to him, the money was paid through Goplin Realty from the amount he received from Mr. Schumacher as the balance due on the land contract. In return, he stated he received a promissory note for $1,000 signed by Helen Jax. He testified that he picked the note up at the office of Bowen Houck, a Richland Center attorney, and did not actually see the defendant sign it. However, he stated that Mr. Houck told him Helen Jax had been in the office to sign the note. After the note came due he asked her for payment several times. However, each time she denied having signed the note and denied owing him $1,000.
Helen Jax testified that she never asked the plaintiff for $1,000 and that she borrowed the money for the inventory from one Eugene Collins. She denied that the signature on the promissory note was hers. She also denied, initially, that she had endorsed the $1,000 check alleged by Leonard Jax to have been received by her in exchange for the note. She later conceded that the endorsement was 'possibly' hers, but denied cashing the check or otherwise receiving its proceeds.
Mr. Bowen Houck was also called to testify. Mr. Houck stated he had been contacted by a realtor with respect to the sale of the tavern and that he drew up some papers for the closing. Mr. Houck stated that he had done some legal work for Helen Jax during the six-month period covering the execution of the promissory note and that he 'probably was' her attorney at the time. Her counsel objected to his testimony and the trial court instructed Mr. Houck that his testimony relating to the note transaction was subject to the attorney-client privilege. As a result, Mr. Houck refused to answer any questions concerning the preparation and execution of the note.
Stanley Goplin was associated with Goplin Realty at the time of the transaction here involved. He stated that he was involved in the negotiations concerning Schumacher's sale of the tavern to Helen Jax. She applied the earnest money and the realty firm drew up the offer to purchase with certain contingencies relating to financing. The purchase of the tavern itself was financed by the Richland County Bank. However, Mr. Goplin stated Helen Jax told him she needed more money than the bank would give her and asked him to negotiate with Leonard Jax for a $1,000 loan. Mr. Goplin testified further that Mr. Houck's office was to prepare the promissory note pursuant to the terms agreed upon by the parties.
Gary Henning, who was also a Goplin associate at the time, identified and explained the entries on two closing statements prepared on that date. One statement represents the transaction between Mr. Schumacher and Helen Jax. The other statement listed the 'buyer' as Warren Schumacher and the 'seller' as Leonard and Helen Jax. Mr. Henning stated that this statement was not really a closing statement but represented only the termination of the land contract agreement between Mr. Schumacher and Leonard Jax. The inclusion of Helen Jax as 'seller' on that exhibit was apparently a mistake. Only Leonard Jax signed the statement as 'seller.'
Mr. Henning explained that all amounts due Leonard Jax from Mr. Schumacher were paid by check drawn on the Goplin Realty trust account. The top portion of the statement indicated that a total of $4,685 was due from Mr. Schumacher. The lower portion, labeled 'Broker's Settlement with Seller,' set forth various disbursements charged to the seller and deducted from the total amount due. A separate check was issued by Goplin Realty for each disbursement. Each check was made payable both to Leonard Jax and the appropriate creditor. A disbursement of $1,000 followed the typewritten notation 'Promissory Note to Helen Jax.' Mr. Henning identified the corresponding check for $1,000 drawn on the Goplin trust account and payable to both Leonard Jax and Helen Jax.
Mr. Henning also stated that, under the procedure employed by the Goplin Realty at closings, Helen Jax would have been given the $1,000 check. However, he did not remember whether he personally gave her the check or whether she endorsed it in his presence. Stanley Goplin verified Mr. Henning's description of the procedures employed at the closing.
Leonard Jax's initial contention on appeal is that the trial court erred in ruling that testimony by attorney Bowen Houck concerning his involvement in the preparation and execution of the promissory note was precluded by the attorney-client privilege. Leonard Jax argues that it was not sufficiently established that Mr. Houck was acting as Helen Jax's attorney at the time the note was alleged to have been prepared. In addition, Leonard Jax asserts that the circumstances relating to the note's preparation and Helen Jax's act in signing it could not constitute confidential communications such as are within the scope of the privilege.
At the time this case was tried, the basic principles of the attorney-client privilege were set forth in sec. 885.22, Stats. (1969). That section provided:
1
The testimony of both Mr. Houck and Helen Jax was equivocal on whether he was in fact her attorney at the time the note was drafted in his office, or whether he merely drafted it in response to a request from the realtor. Assuming that the attorney-client relationship did exist at the time the note was drafted and signed, this would not preclude the attorney from being required to testify regarding the drafting, signing, and delivery of the note. The privilege would not extend to those acts.
This court has noted that the privilege embodied in sec. 885.22, Stats., protects communications and not necessarily facts or evidence. State ex rel. Dudek v. Circuit Court (1967), 34 Wis.2d 559, 578, 150 N.W.2d 387. The policy of the privilege was expressed in Jacobi v. Podevels (1964), 23 Wis.2d 152, 156, 157, 127 N.W.2d 73, 76:
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