Plaintiff sues for $1,781.25 as the unpaid balance of $1,900 loaned to defendant, George Smallen, by plaintiff’s assignor, Frank Charles Szehner, Jr. Defendant admits the loan and defends upon the ground that it was fully repaid.

Frank Charles Szehner, Jr., and Aileen Szehner were husband and wife. Aileen is defendant’s sister. Frank Charles *835 Szehner, Jr., was a chief petty officer in the United States Navy in September, 1948. About that time, he received naval orders to proceed to Honolulu for a tour of duty expected to extend over a period of two years. A family conference was had, at which Szehner and his wife, Smallen, the defendant, and Mrs. Mabel Smallen, mother of Aileen and George, were present. At this conference, it was mutually arranged between the Szehners on their part that they would lend George Smallen $1,900, and that if and when Smallen would accumulate funds toward the repayment of this loan, he would invest the same in United States Series E bonds in the name of himself, Szehner and his wife, Aileen, but retain the bonds in his possession, to be used to defray the expenses of an expected major operation of the then invalid mother of Aileen and George. By the terms of the arrangement, the bonds could be cashed by Smallen at any time and the proceeds used by him should the necessity arise.

Pursuant to this arrangement, Szehner purchased a bank cashier's check in the amount of $1,900 payable to Smallen, which was paid for by funds from the joint account of himself and his wife, Aileen. Smallen received the check in January, 1948. Shortly after the Szehners arrived in Honolulu, Smallen discovered that regulations for the issuance of United States Series E bonds would not permit their purchase in the names of more than two persons as joint owners, whereupon he testified that he promptly wrote the Szehners in Honolulu informing them that this was the case, stating that he had commenced the purchase of the bonds in the names of himself and his sister, Aileen Szehner, only and asking if this would be all right. Mrs. Szehner replied, agreeing for the Szehners to the purchase of the bonds in these names. He continued his purchases in this manner until he had acquired bonds in the names of himself and sister of the cash value of $1,781.25, at the time the Szehners returned to California about the first of March, 1950. We quote from the settled statement on appeal:

An interlocutory decree of divorce was granted to Mrs. Szehner on October 31, 1950, and a final decree on November 1, 1951. The divorce action was commenced on the 14th of April, 1950. At that time, Mr. Szehner alleged in his complaint :

Mr. Szehner testified as follows:

To the subsequent action filed by Mrs. Szehner, Mr. Szehner filed an answer and crosscomplaint, and alleged, among other things:

There was further read into evidence an affidavit by Mr. Szehner’s former attorney in the divorce action, in which it is alleged on information and belief:

The court found that defendant became indebted to Frank Charles Szehner, Jr., plaintiff's assignor, in the sum of $1,900 for and on account of money loaned said defendant, without interest, at defendant’s special instance and request; that it is true that from March of 1948 until on or about the first of March, 1950, plaintiff’s assignor was an enlisted man in the United States Navy, stationed outside of the territorial limits of the United States; but it is not true that the said account of $1,900 for money loaned had not been paid, but on the contrary the court finds that it is true that said loan was fully paid and discharged during the month of April, 1950, and prior to the commencement of this action. Judgment was accordingly entered for the defendant.

We think the evidence supports a finding that the loan was repaid. It is clear from the record that the full benefits of the repayment were accepted and acted upon by Frank Charles Szehner, Jr., in the divorce action, and in that action he received the benefits of the fund as repaid.

During the course of the trial, the wife testified that upon their receipt in Honolulu of the letter written by the *838 defendant advising them of the necessity of buying the bonds in only two names, her husband, Frank Charles Szehner, Jr., • told her to express to her brother Szehner’s satisfaction with the new arrangement. At the time this evidence was elicited, Mrs. Szehner had testified on direct examination:

Section 1881, subdivision 1, of the Code of Civil Procedure provides;

In People v. Loper, 159 Cal. 6 [ 112 P. 720 , Ann.Cas. 1912B 1193], it was recognized that a divorced woman could not testify as to communications during marriage, although she might testify as to other matters such as the mental condition of her husband.

In Ayres v. Wright, 103 Cal.App. 610 [ 284 P. 1077 ], it was held under the section and subdivision quoted that one spouse may not testify for or against the other without consent. The code section contains no exception in case of agency and so the testimony was not admissible. In the opinion in that case, the court says:

See, generally, on this subject, a note in 2 California Law *840 Review, 148, and 2 Wigmore on Evidence, 3d edition, sections 600-603, inclusive.

Certain communications, however, have been held not to be privileged. (Poulson v. Stanley, 122 Cal. 655 [ 55 P. 605 , 68 Am.St.Rep. 73 ]; Savings Union Bank & Trust Co. v. Crowley, 176 Cal. 543, 547 [ 169 P. 67 ]; Estate of Gillett, 73 Cal.App.2d 588 [ 166 P.2d 870 ].)

An exception to the rule is found in waiver which will occur when one spouse relies upon a contract with the other, and so it was held in Tobias v. Adams, 201 Cal. 689 [ 258 P. 588 ], that in an action by a third party against one of the spouses the privilege respecting marital communications does not exist where the spouse sued relies upon a contract made with the other spouse. That was a suit by creditors to set aside a deed made by Adams to his wife, alleged by plaintiff to have been made to defraud the husband’s creditors. The husband and wife had made and filed for record, which was pleaded in the suit, an agreement by which the husband relinquished all his community interests standing in his name, and certain other property. It was held that the provisions of section 1881, Code of Civil Procedure, did not apply. As the defendants relied upon the written agreement, they could not take advantage of the privilege that either spouse, without the consent of the other, may not testify to communications. It was held that the conversations between the husband and wife might be proved by the wife though the husband objected.

We think, on the authority of that case, it was not error to admit the testimony of the wife under the similar circumstances here present. The nature of the contract between the husband and wife and the wife’s brother is the issue made by the complaint. By raising this issue, the husband thereby opened the door to determine what that contract was in its entirety, including any amendments or novations thereof.

“It would be monstrous (says the court in the Adams case, page 699) if husband and wife might between themselves conspire to defraud the creditors of the one or the other and to conceal their act produce a written instrument which is immune from all inquiries and which must be accepted by the defrauded party as final. The freedom of contract between husband and wife and the power to transmute community property into separate property or vice versa by agreement between themselves renders it imperative that when such an agreement is relied upon by their joint answer, thereby the whole subject matter of said agreement is open *841 to inquiry which may include communications from one to the other. This we understand upon examination of the transcript to be the effect of the holding in Johnston v. St. Sure, 50 Cal.App. 735 [ 195 P. 947 ], rehearing denied by this court.”

The informality of the family agreement sufficient for the needs of the parties until divorce litigation commenced, gives the agreement here in suit all the weight due to a written, recorded, agreement between the husband and wife alone. We think, under the circumstances here present, the privilege was waived by the husband, and find no error in the admission of the evidence.

Section 1881, subdivision 1, of the Code of Civil Procedure, was not enacted to be used as an instrument to prevent justice, or to permit a husband to initiate litigation which could only succeed by locking the lips of his former wife.

Judgment is affirmed.

Turrentine, P. J., concurred.