Rundle v. Winters

• Decision Date: 06 May 1931
• Docket Number: Civil 2882
• Citation: 298 P. 929,38 Ariz. 239
• Parties: S. J. RUNDLE and JOHN H. GAGE DEVELOPMENT COMPANY, INC., Appellants, v. RENO W. WINTERS and LULU M. WINTERS, His Wife, Appellees
• Court: Arizona Supreme Court

298 P. 929

38 Ariz. 239

S. J. RUNDLE and JOHN H. GAGE DEVELOPMENT COMPANY, INC., Appellants, v. RENO W. WINTERS and LULU M. WINTERS, His Wife, Appellees

Civil No. 2882

Supreme Court of Arizona

May 6, 1931

APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge. Judgement affirmed.

Messrs Stockton & Perry, Mr. Thomas A. Flynn and Mr. Thomas W Nealon, for Appellants.

Messrs Hayes, Stanford, Walton, Allee & Williams, for Appellees.

Messrs Struckmeyer & Jennings, for Appellee Lulu M. Winters.

OPINION

LOCKWOOD, J.

Reno W. Winters and Lulu M. Winters, his wife, hereinafter called plaintiffs, brought suit against S. J. Rundle and John H. Gage Development Company, a corporation, hereinafter called defendants, to quiet the title to certain real estate situated in Maricopa county, alleging that they were its owners, and that defendants claimed some interest therein adverse to that of plaintiffs.

Defendants, answering, stated in substance that on the third day of October, 1927, plaintiff Reno W. Winters executed to defendant Rundle an option to purchase the premises in question; that Rundle had assigned said option to his co-defendant, the John H. Gage Development Company, and that the company had elected to exercise the option in accordance with the terms thereof, but that Winters had refused to carry out his part of the contract. The answer further alleged that said property was the sole and separate property of Reno W. Winters, and that plaintiff Lulu M. Winters by her conduct was estopped from claiming any interest therein. The same facts were set up by the company in a cross-complaint, and it asked for specific performance of the contract, and that plaintiff Lulu M. Winters be adjudged to have no interest in the property.

Plaintiffs replied, denying that plaintiff Lulu M. Winters had ever consented to the execution of the option, stating that defendants well knew at the time it was executed that she had refused to agree to it, and also alleging that the property in question was at all times the community property of plaintiffs.

The case was tried before the court sitting with a jury, and at the termination of the evidence the court found there was no conflict therein upon the material facts necessary for a determination of the case, discharged the jury from further consideration of the matter, and, after making its findings of fact and conclusions of law, rendered judgment to the effect that plaintiffs were the owners of the realty in question as community property, that neither of defendants had any right, title or interest thereto, and that they were forever barred from claiming any interest therein. From the judgment rendered, defendants have appealed.

There are some thirty-six separate assignments of error which are grouped by defendants under fourteen propositions of law, but in considering the case we shall first determine the fundamental principles which we think govern it under the facts, and then apply these principles to the specific assignments.

The first question for our consideration is whether the court erred in discharging the jury and making its own findings of fact. This being an equity case, while parties are entitled to a jury, its verdict is merely advisory. Donahue v. Babbitt, 26 Ariz. 542, 227 P. 995. The court, though it must harken to the advice of the jury, need not heed it. Security Trust & Savings Bank v. McClure, 2. Ariz. 325, 241 P. 515; Light v. Chandler Imp. Co., 33 Ariz. 101, 59 A.L.R. 107, 261 P. 969.

However, when the evidence is of such a nature that, were it an action at law, it would be the duty of the court to instruct a verdict, it is obvious that no question of fact remains for the consideration of the jury, and it is proper practice that the court under such circumstances discharge the jury from further consideration of the case. Ainsworth v. National Bank, 33 Ariz. 466, 266 P. 8; Light v. Chandler Imp. Co., supra; sec. 3829, Revised Code 1928. We must then consider whether or not the ultimate facts necessary to support the judgment of the court were so conclusively determined by the evidence that the court was justified in its action in discharging the jury.

It is the theory of plaintiffs that the property in question was their community estate; that the option given to defendant Rundle was signed by plaintiff Reno W. Winters alone, with the full knowledge on the part of Rundle that he was a married man; that his wife, when asked to sign the option, had refused to do so, and at all times thereafter continued in her refusal; and that under these circumstances the option was void and of no effect, but, that being a cloud upon the title, plaintiffs had the right to maintain this action.

It is the theory of defendants, on the other hand: (1) That the property in question was the separate property of Reno W. Winters, and that therefore the option of sale signed by him alone is valid and enforceable; (2) that, even if it was not his separate property, he was the agent of the community for the purpose of executing the option, and that Mrs. Winters is bound thereby under the rules of agency; and (3) that by her conduct she is estopped from asserting it to be community property, or that the option was not given with her full consent. So far as the question of agency is concerned, we think it may be disposed of very shortly. The personal property of the community by the express language of the statute may be disposed of during coverture by the husband only, as the agent of the community. La Tourette v. La Tourette, 15 Ariz. 200, Ann. Cas. 1915B 70, 137 P. 426; paragraph 3850, Rev. Stats. Ariz. 1913, Civil Code.

The paragraph of the Code granting that right mentions personal property only, and paragraph 2061, Revised Statutes of Arizona of 1913, Civil Code, says:

"2061. No conveyance, transfer, mortgage or incumbrance of any real estate which is the common property of husband and wife, or any interest therein, shall be valid unless such conveyance, transfer, mortgage or incumbrance shall be executed and acknowledged by both the husband and wife."

We are of the opinion that the two paragraphs, read together, absolutely negative any theory of statutory or implied agency on the part of the husband to dispose of the community realty. Such an agency must arise in the same manner as an agency conferred by a stranger, and subject to the same restrictions, and there is no pretense in the evidence that authority of that nature ever existed. Defendants' theory of agency has no standing in this case.

The second defense is that of estoppel. The testimony, taken in the strongest light in favor of defendants, shows that the original negotiations in regard to the option were between Rundle and Reno W. Winters. When they had arrived at a tentative agreement, the option was prepared and presented to Mrs. Winters for signature in the presence of Rundle. Mrs. Winters positively declined to sign the option then, but, according to Rundle, informed him she would have to consider the matter. No attempt was made thereafter by either Rundle or the company to obtain her signature, and she several times informed either them or their agents that she was not satisfied with the option and did not agree to it. There is some dispute as to the reason given by her for her dissatisfaction, but we think this is immaterial. The ultimate and uncontradicted fact is that the only time she was asked to sign she refused, and never thereafter agreed to or approved the option, and both defendants had actual or imputed knowledge of her refusal before they changed their position in any manner.

We have discussed the nature of an estoppel on the part of the wife to dispute a contract affecting community realty in Hall v. Weatherford, 32 Ariz. 370, 56 A.L.R. 903, 259 P. 282. A reading of that case and a comparison of the facts therein with the evidence in the case at bar will show that there was no issue of fact on the question of estoppel to submit to the jury.

The third and vital issue in the case is whether or not the property in question was the community estate of plaintiffs or the separate property of Reno W. Winters. In determining what the evidence shows upon this point, we first state certain rules of law applicable to the situation:

All property acquired by either husband or wife during coverture is presumed to be community, and the burden of proof is upon anyone asserting it is separate property to show that fact by clear and satisfactory evidence. La Tourette v. La Tourette, supra; Malich v. Malich, 23 Ariz. 423, 204 P. 1020.

Property takes its character as community or separate estate at the time of its acquisition. Horton v. Horton, 35 Ariz. 378, 278 P. 370; Pendleton v. Brown, 25 Ariz. 604, 221 P. 213.

When separate and community funds are mingled, the commingled funds are presumed to be community, and the burden is upon the one claiming them or any portion thereof to be separate to prove such fact and the amount by clear and satisfactory evidence. Yesler v. Hochstettler, 4 Wash. 349, 30 P. 398; Doyle v. Langdon, 80 Wash. 175, 141 P. 352.

Where either spouse is engaged in a business whose capital is the separate property of such spouse, the profits of the business are either community or separate in accordance with whether they are the result of the individual toil and application of the spouse, or the inherent qualities of the business itself. Lake v. Bender, 18 Nev. 361, 4 P. 711, 7 P. 74; In re Buchanan's Estate, 89 Wash. 172, 154 P. 129; Jacobs v. Hoitt, 119 Wash. 283, 205 P. 414.

When spouses have treated the income from their separate property as community, and it was their intent that it should become community, the character of the...