Zvolis v. Condos

• Decision Date: 26 May 1960
• Docket Number: No. 35191,35191
• Citation: 56 Wn.2d 275,352 P.2d 809
• Parties: Irene ZVOLIS, Executrix of the Estate of Nick Zvolis, Deceased, Appellant, v. James J. CONDOS, Respondent.
• Court: Washington Supreme Court

Page 275

56 Wn.2d 275

352 P.2d 809

Irene ZVOLIS, Executrix of the Estate of Nick Zvolis Deceased, Appellant, v. James J. CONDOS, Respondent.

No. 35191.

Supreme Court of Washington, Department 2.

May 26, 1960.

Ursich & Jensen, Tacoma, for appellant.

Brodie & Fristoe, Olympia, for respondent.

FOSTER, Judge.

Appellant, plaintiff below, is the executrix ¹ of the will of Nick Zvolis, deceased. It was executed five years before she was divorced from him on April 8, 1957. She sued to set aside the testator's quitclaim deed to real property in Pierce county to the respondent, James J. Condos. The appeal is from a judgment dismissing that action.

The real property in question was devised to their only son, Tommy, who was seventeen at the time of the trial. The respondent, James J. Condos, is decedent's stepson by a prior marriage and had been raised by him from the time he was five until he was sixteen years of age.

Tommy's custody was awarded to the appellant by the divorce decree. Although his parents had separated sometime before the divorce action was started, nevertheless, Tommy continued to live with his father until entry of the decree when he transferred his allegiance and thereafter resided with his mother.

On July 29, 1957, three months following the divorce, the deceased executed a general power of attorney to the respondent. On the 10th day of September, 1957, deceased conveyed the property by quitclaim deed to the respondent who agreed to provide for him for the remainder of his lifetime. He died October 23, 1957.

Other relevant findings of fact may be summarized as follows:

When the property was quitclaimed, the respondent agreed to pay some obligations of the deceased in addition to providing for him for the remainder of his life. The deceased intended the property as a gift to the respondent in so far as the value exceeded this consideration. Although almost blind, Zvolis was competent at the time of the execution of the deed and knew the natural objects of his bounty. The conveyance was of his own free will and accord. The deed was not executed as a result of the influence of the respondent or anyone else.

All but two of the twenty-three assignments of error relate to disputes of fact. It is sufficient to say that all findings of fact are supported by substantial evidence. The most favorable view of appellant's argument is that there was evidence to the contrary. This court does not retry factual disputes. Thorndike v. Hesperian Orchards, Wash., 343 P.2d 183; Kelly v. Kelly, Wash., 348 P.2d 652; Stewart v. Smith, Wash., 348 P.2d 970.

As part of her case in chief, appellant's counsel called the respondent as an adverse witness and examined him concerning the execution of both the deed and the power of attorney. Subsequently, when the respondent testified in his own behalf as to the same transactions with the decedent, the appellant objected in one instance on the ground that such was prohibited by RCW 5.60.030. Thus the appellant sought to use the respondent's testimony for her own purposes and then, when he testified in his own behalf, to raise the bar of the dead man's statute. This, however, was waived when she called him as her own witness and examined him respecting the transaction in question.

In Johnson v. Peterson, 43 Wash.2d 816, 264 P.2d 237, 240, the late Judge Olson for this court reviewed our decisions and collected relevant literature. The conclusion there reached was stated very simply:

'Plaintiff waived the bar of the statute by examining defendant as we have stated. Where the incompetency imposed upon a witness by the statute is waived at all, it is waived as to all facts pertinent to the matters developed from the witness by the party for whose benefit the statute was enacted. * * *'

Based upon Hemrich v. Hemrich, 117 Wash. 124, 201 P. 10, and Meyer v. Campion, 120 Wash. 457, 207 P. 670, appellant argues '* * * that by virtue of the admission by the defendant of the relationship of trust and confidence, the deed is invalid as a matter of law unless given upon independent advice. * * *' While there are New Jersey cases ² so holding, we find nothing in our decisions expressing that view. Indeed, after reviewing the Hemrich case, the court concluded in Meyer v. Campion, supra [120 Wash. 457, 207 P. 276]:

'While it is not necessary for us to adopt the principle of independent advice in all cases, the lack of it in this case seems to us a very important factor. * * *'

We think the true rule is that stated in the fifth edition of Pomeroy's Equity Jurisprudence as follows:

'A gift by a principal to his agent may be valid and be sustained, if the absolute good faith, knowledge, and intent of both the parties is clearly established.' 3 Pomeroy's Equity Jurisprudence, § 959c, pp. 825, 828. ³

Appellant's agrument overlooks completely that the findings of the trial court are that the respondent sustained the burden of proving the gift was entirely free from undue influence and that the grantor executed the deed of his own free will and accord. The argument is that all gifts to fiduciaries are void if there is not independent advice. This gift was not even initiated by respondent. He never dominated the grantor in anything. Even in New Jersey the independent advice rule is not applicable unless the proof shows that the recipient dominated the grantor. ⁴

The independent advice rule is resorted to only if there is no other way of proving the absence of undue influence. In any event, it is only one of the whole group of circumstances to be considered in determining whether the gift is the free and voluntary act of the donor or whether the gift was the result of the undue influence of the recipient. Independent advice is one way, but not the exclusive method, of establishing the fairness of the transaction and that it was voluntarily made, free from undue influence. Kidd v. Williams, 1901, 132 Ala. 140, 31 So. 458, 56 L.R.A. 879.

This same argument was pressed upon the supreme court of Oregon in Rowe v. Freeman, 89 Or. 428, 451, 172 P. 508, 174 P. 727, 730. That court answered as follows:

'According to the great weight of authority, it is not reasonable to hold that because A. has confidence in and trusts B. the former is under such disability that he cannot give the latter anything unless he is able to, and does, find some stranger who will advise the execution of the gift. The circumstance of want of independent advice is nearly always found as an auxiliary or makeweight to a decision, where there is a defect of mental capacity or other conditions which of themselves tend to nullify the questioned transaction. * * *'

In 1908, the court of appeals, the court of last resort in Maryland, in Zimmerman v. Frushour, 108 Md. 115, 69 A. 796, 799, 16 L.R.A.,N.S., 1087, 15 Ann.Cas. 1128, was confronted with this identical question which it stated in the following sentence:

'The only question remaining, therefore, in the case is whether a gift from a principal to an agent, satisfactorily appearing to be the uninfluenced, deliberate, and intelligent act of the donor, is to be held void merely because the donor had not independent advice.'

A painstaking and exhaustive analysis of both the American and English decisions was made and the conclus- ion announced was that there was no hard and fast rule that inde- pendent advice is essential to sustain a gift between persons occupying a fiduciary relations.

The independent advice rule does not prevail in Ohio. Federman v. Stanwyck, Ohio App.1951, 108 N.E.2d 339.

Appellants' argument in Pfingst v. Goetting, 98 Cal.App.2d 293, 215 P.2d 93, 104, was stated by the court as follows:

'Appellants' second point is that 'The decision of the court was erroneous for the reason that the decedent had no independent advice in any of the transactions involved in this case."

The court held independent advice was not indispensable to the validity of the gift. It said:

'It is now definitely settled that independent advice is not indispensable. In Brown v. Canadian Industrial Alcohol Co., supra, 209 Cal. at page 599, 289 P. at page 614, the court says: 'In some early cases of this court, where in factual situation was particularly aggravating, expressions may be found, when considered separately and without reference to the text, which imply that independent advice is essential to the validity of such a gift. Ross v. Conway, supra [92 Cal. 632, 28 P. 785]; Dolliver v. Dolliver, 94 Cal. 647, 30 P. 4; Yordi v. Yordi, 6 Cal.App. 20, 91 P. 348; Nobles v. Hutton, supra [7 Cal.App. 14, 20, 93 P. 289]. But those cases were never intended to hold that independent advice was indispensable. We are in accord with the rule that, where a finduciary relationship exists between the donor and donee, the absence of independent advice is a circumstance to be considered in determining whether the gift should be avoided because of alleged undue influence or fraud, but its nonexistence alone does not authorize that court to avoid the gift. All utterances to the contrary have been squarely repudiated by this court. * * *"

Fifteen years ago the supreme court of Arizona in Amado v. Aguirre, 63 Ariz. 213, 161 P.2d 117, 120, 160 A.L.R. 1126, had occasion to examine the state of the law upon this subject. The results of that court's survey are stated in the following passage from its opinion:

'There are numerous decisions on the question of independent advice necessary to sustain a gift whenever a relationship of trust and confidence exists between the donor and the donee. It must be borne in mind, however, that the rule is applied only where the donee is the dominant person in the relationship. New Jersey and Tennessee hold that the gift will not be sustained whenever there is a relationship of trust and confidence unless the donor had competent and independent advice. This also appears to be the English and Canadian rule. However, in the greater number of the...