The Main Issue of The Appellants Garis and Peggy Case Study

IRAC the 2 short cases, the cases to read are in the file below. double space, 2-3 page.

Martin v. Martin 878 S.W. 2d 30 (Ky. Ct. App. 1994) (pg 3)

choose any two of the “Notes and Questions” problems following the case to answer

Harms v. Sprague 473 N.E.2d 930 (1984) (pg 21)

Chapter 7: Co-ownership and Marital
Property
More than one person can “own” a thing at any given time. Their rights will be exclusive as
against the world, but not exclusive as against each other. When conflicts between them
develop, or when the outside world seeks to regulate their behavior, we need to understand
the nature and limits of their rights.
***
The main types of co-ownership we will consider are (1) tenancy in common, (2) joint tenancy,
and (3) tenancy by the entireties, along with a brief look at (4) community property, a particular
kind of co-ownership available in some states.
In the late 1980s, a sample of real estate records showed that about two-thirds of residential
properties were held in some form of co-ownership. 1 Given that many justifications for the
institution of private property rely on the idea that competing interests in property lead to
inefficiency, waste, and conflict, it is perhaps surprising that so much private property is, in
practice, owned by more than one person. If communal ownership is so inefficient, why do
we recognize so many kinds of co-ownership?
A.
Types of Co-Ownership: Introduction
U.S. v. Craft
535 U.S. 274 (2002)
Justice O’CONNOR delivered the opinion of the Court.
… English common law provided three legal structures for the concurrent ownership of
property that have survived into modern times: tenancy in common, joint tenancy, and tenancy
Evelyn Alicia Lewis, Struggling with Quicksand: The Ins and Outs of Cotenant Possession Value Liability and a Call for Default Rule
Reform, 1994 WIS. L. REV. 331; see also CAROLE SHAMMAS ET AL., INHERITANCE IN AMERICA FROM COLONIAL TIMES TO
THE PRESENT 171-72 (1987) (showing percentage of land held in joint tenancies rising from under 1% in 1890 to nearly
80% in 1960, then dropping to 63% in 1980); N. William Hines, Real Property Joint Tenancies: Law, Fact, and Fancy, 51 IOWA
L. REV. 582 (1966) (finding that joint tenancies in Iowa rose from under 1% of acquisitions in 1933 to over a third of farm
acquisitions and over half of urban acquisitions in 1964, almost exclusively by married couples); Yale B. Griffith, Community
Property in Joint Tenancy Form, 14 STAN. L. REV. 87 (1961) (study of California counties in 1959 and 1960 finding that married
couples held over two-thirds of property as cotenants, 85% of which was as joint tenants).
1
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by the entirety. The tenancy in common is now the most common form of concurrent
ownership. The common law characterized tenants in common as each owning a separate
fractional share in undivided property. Tenants in common may each unilaterally alienate their
shares through sale or gift or place encumbrances upon these shares. They also have the power
to pass these shares to their heirs upon death. Tenants in common have many other rights in
the property, including the right to use the property, to exclude third parties from it, and to
receive a portion of any income produced from it.
Joint tenancies were the predominant form of concurrent ownership at common law, and still
persist in some States today. The common law characterized each joint tenant as possessing
the entire estate, rather than a fractional share: “[J]oint-tenants have one and the same interest
… held by one and the same undivided possession.” Joint tenants possess many of the rights
enjoyed by tenants in common: the right to use, to exclude, and to enjoy a share of the
property’s income. The main difference between a joint tenancy and a tenancy in common is
that a joint tenant also has a right of automatic inheritance known as “survivorship.” Upon
the death of one joint tenant, that tenant’s share in the property does not pass through will or
the rules of intestate succession; rather, the remaining tenant or tenants automatically inherit
it. Joint tenants’ right to alienate their individual shares is also somewhat different. In order
for one tenant to alienate his or her individual interest in the tenancy, the estate must first be
severed—that is, converted to a tenancy in common with each tenant possessing an equal
fractional share. Most States allowing joint tenancies facilitate alienation, however, by allowing
severance to automatically accompany a conveyance of that interest or any other overt act
indicating an intent to sever.
A tenancy by the entirety is a unique sort of concurrent ownership that can only exist between
married persons. Because of the common-law fiction that the husband and wife were one
person at law (that person, practically speaking, was the husband), Blackstone did not
characterize the tenancy by the entirety as a form of concurrent ownership at all. Instead, he
thought that entireties property was a form of single ownership by the marital unity. Neither
spouse was considered to own any individual interest in the estate; rather, it belonged to the
couple.
Like joint tenants, tenants by the entirety enjoy the right of survivorship. Also like a joint
tenancy, unilateral alienation of a spouse’s interest in entireties property is typically not possible
without severance. Unlike joint tenancies, however, tenancies by the entirety cannot easily be
severed unilaterally. Typically, severance requires the consent of both spouses, or the ending
of the marriage in divorce. ***
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B.
Tenancy in Common
Tenancy in common is the modern default form of co-ownership, unless a contrary intent is
expressed; usually that intent must be in writing. All tenants in common are entitled to
possession and use of the property. Only partition, discussed below, results in separate and
divided interests.
Tenants in common need not own equal shares. If there is no document or legal rule of
inheritance specifying their shares, courts will often look to the contribution of the cotenants
to the purchase in order to determine appropriate shares.
1.
Rights and Duties of Tenants in Common
Concurrent owners can generally contract among themselves to allocate the various benefits
and burdens of ownership as they see fit. But in the absence of such agreement, there are
several default rules regarding the rights and obligations that arise between cotenants of
property.
This system of default rules begins with the premise that each cotenant is entitled to all the
rights of ownership in the entire co-owned parcel. *** The implications of multiple equal and
undivided interests in a co-owned parcel become far more complicated with respect to other
rights of ownership—particularly the rights of possession and use. If all co-owners are equally
entitled to possession and use of the whole parcel, what happens when more than one cotenant
decides to assert those rights at the same time? Is it physically possible to put co-equal rights
of all concurrent owners into practice? And if not, what if any obligation does a cotenant in
possession owe to cotenants out of possession? Consider the following case:
Martin v. Martin
878 S.W. 2d 30 (Ky. Ct. App. 1994)
… Garis and Peggy own an undivided one-eighth interest in a tract of land in Pike County.
This interest was conveyed to Garis by his father, Charles Martin, in 1971. Appellees, Charles
and Mary Martin, own a life estate in the undivided seven-eighths of the property for their
joint lives, with remainder to appellants.
In 1982, Charles Martin improved a portion of the property and developed a four lot mobile
home park which he and Mary rented. In July of 1990, Garis and Peggy moved their mobile
home onto one of the lots. It is undisputed that Garis and Peggy expended no funds for the
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improvement or maintenance of the mobile home park, nor did they pay rent for the lot that
they occupied.
In 1990, Garis and Peggy filed an action which sought an accounting of their claimed oneeighth portion of the net rent received by Charles and Mary from the lots. The accounting was
granted, however, the judgment of the trial court required appellants to pay “reasonable rent”
for their occupied lot. It is that portion of the judgment from which this appeal arises.
The sole issue presented is whether one cotenant is required to pay rent to another cotenant.
Appellants argue that absent an agreement between cotenants, one cotenant occupying
premises is not liable to pay rent to a co-owner. Appellees respond that a cotenant is obligated
to pay rent when that cotenant occupies the jointly owned property to the exclusion of his coowner.
Appellants and appellees own the subject property as tenants in common. The primary
characteristic of a tenancy in common is unity of possession by two or more owners. Each
cotenant, regardless of the size of his fractional share of the property, has a right to possess
the whole.
The prevailing view is that an occupying cotenant must account for outside rental income
received for use of the land, offset by credits for maintenance and other appropriate expenses.
The trial judge correctly ordered an accounting and recovery of rent in the case sub judice.
However, the majority rule on the issue of whether one cotenant owes rent to another is that
a cotenant is not liable to pay rent, or to account to other cotenants respecting the reasonable
value of the occupancy, absent an ouster or agreement to pay.
The trial court relied erroneously on Smither v. Betts, Ky., 264 S.W.2d 255 (1954), for its
conclusion that appellants were “obligated to pay seven-eighths of the reasonable rental for
the use of the lot they occupy.” In Smither, one cotenant had exclusive possession of jointly
owned property by virtue of a lease with a court-appointed receiver and there was an
agreement to pay rent. That clearly is not the case before us. There was no lease or any other
agreement between the parties.
The appellees reason that the award of rent was proper upon the premise that Garis and
[Peggy] ousted their cotenants. While the proposition that a cotenant who has been ousted or
excluded from property held jointly is entitled to rent is a valid one, we are convinced that
such ouster must amount to exclusive possession of the entire jointly held property. We find
support for this holding in Taylor, supra, in which the Court stated at 807-08:
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But, however this may be, running throughout all the books will be found two essential
elements which must exist before the tenant sought to be charged is liable. These are:
(a) That the tenant sought to be charged and who is claimed to be guilty of an ouster
must assert exclusive claim to the property in himself, thereby necessarily including a
denial of any interest or any right or title in the supposed ousted tenant; (b) he must
give notice to this effect to the ousted tenant, or his acts must be so open and notorious,
positive and assertive, as to place it beyond doubt that he is claiming the entire interest
in the property.
We conclude that appellants’ occupancy of one of the four lots did not amount to an ouster.
To hold otherwise is to repudiate the basic characteristic of a tenancy in common that each
cotenant shares a single right to possession of the entire property and each has a separate claim
to a fractional share.
Accordingly, the judgment of the Pike Circuit Court is reversed as to the award of rent to the
appellees.
Notes and Questions
1. Recurring conflicts between cotenants. Rules for cotenant liability are incoherent
and unsatisfactory despite centuries of litigated cases. Evelyn Lewis speculates that
“cotenant conflicts receive little attention from property law reformers” because they
involve “‘one-shotters’—parties who rarely litigate, who are predominantly members
of the obedient middle-class and who suffer quietly the rules of law they were too
unsophisticated to know or consider in advance of the conflict.” Evelyn Lewis,
Struggling with Quicksand: The Ins and Outs of Cotenant Possession Value Liability, 1994 WIS.
L. REV. 331.
Management conflicts can arise easily because, unlike in a trust or a corporation (both
forms of joint ownership) there is no one with the legal right to manage the property
on behalf of the other owners, and a cotenant who takes on the burden of management
is not entitled to be paid for her services to the others. See Combs v. Ritter, 223 P.2d
505 (Cal. Ct. App. 1950). Although each cotenant has the right to possess and benefit
from the property, and the duty to pay her share of necessary expenses such as taxes,
there is no mechanism for group decision-making. If co-owners can’t agree, they may
simply have to split—by divorce followed by a transfer to one party or sale in the case
of tenancy by the entirety and community property; by severance and partition for joint
tenants; and by partition for tenants in common. Short of partition, which involves
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selling or physically dividing the property, the only assistance the courts offer cotenants
is a claim for accounting for rents or profits received by another cotenant, or a claim
for contribution for payments of another cotenant’s share of taxes, mortgage payments,
and necessary maintenance expenses.
2. Ouster. Denial of a right to possession constitutes ouster, and the damages are the
non-possessing cotenant’s share of the rental value of the property. Harlan v. Harlan,
168 P.2d 985 (Cal. Ct. App. 1946) (damages for ouster are rental value).
Evelyn Lewis concludes that, as with adverse possession, the standard for what
constitutes an ouster is so manipulable that courts can reach almost any result on any
given set of facts. See, e.g., Cox v. Cox, 71 P.3d 1028 (Idaho 2003) (tenant in common
was ousted and was entitled to ½ of the fair rental value of the house occupied by her
brother when he told her he was selling the house and that she “had better find a place
to live”); Mauch v. Mauch, 418 P.2d 941 (Okla. 1966) (cotenants in possession of family
farm ousted widowed sister-in-law by telling her they “didn’t want to have her on the
place” and that she “was not to come back”); but see Fitzgerald v. Fitzgerald, 558 So.2d
122 (Fla. Dist. Ct. App. 1990) (ex-wife didn’t oust ex-husband by telling him to leave
the family home and that otherwise “she’d call the law”).
What if one cotenant denies that the other has any title to the property? See Estate of
Duran, 66 P.3d 326 (N.M. 2003) (cotenant lived on the property kept silent or gave
evasive answers to questions about his use of the property; this was not ouster where
he “never expressly told [the other cotenants] that he claimed to own their portions of
the property”). Purporting to convey full title to the property is an ouster, since it sets
up a claim for adverse possession by the grantee. Whittington v. Cameron, 52 N.E.2d
134 (Ill. 1943).
What if one cotenant seeks to use a portion of the land, and the other prevents her
from doing so, perhaps by building a structure on it?
3. Constructive Ouster. What if the property is a single-family home and the co-tenants
are recently divorced or separated? See Hertz v. Hertz, 657 P. 2d 1169 (N.M. 1983)
(applying theory of “constructive ouster” to require payment of half of fair rental
value); Stylianopoulos v. Stylianopoulos, 455 N.E.2d 477 (Mass. Ct. App. 1983)
(divorce constituted ouster, so ex-wife had to pay fair rental value to ex-husband); In
re Marriage of Watts, 217 Cal. Rptr. 301 (Ct. App. 1985) (separated spouse must
reimburse community for exclusive use of house); Palmer v. Protrka, 476 P.2d 185 (Or.
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1970) (if, as a practical matter, the couple can’t live together, requiring the cotenant in
possession to pay half of fair rental value most closely matches parties’ intentions).
Suppose a woman moves out of her family home after being physically assaulted by
her husband. The husband begs her to come back, but she refuses. After two years,
when their divorce becomes final, the ex-wife sues for half the fair rental value of the
house during the two-year period she was out of possession. Should she win? What
if, instead of the wife leaving, she ejects the husband and tells him not to come back,
and two years later, after she’s awarded the house in the divorce, he sues for half the
fair rental value of the house during the two-year period he was out of possession? See
Cohen v. Cohen, 746 N.Y.S2d 22 (App. Div. 2002) (no right to rent for period during
which a court protective order barred cotenant from the property due to his assaultive
conduct).
The majority rule is against constructive ouster, in the absence of physical exclusion.
See, e.g., Reitmeier v. Kalinoski, 631 F. Supp. 565 (D.N.J. 1986) (“[T]he mere fact that
defendant does not wish to live with plaintiff on the premises is of no import. What
counts is that she could physically live on the premises.”).
Which rule is better? If you were advising a client in a divorce, how would you deal
with co-owned property?
What if the property is so small that physical occupation by all cotenants is
impracticable? Some courts will also call this a “constructive ouster” of the cotenants
out of possession. Capital Fin. Co. Delaware Valley, Inc. v. Asterbadi, 942 A.2d 21
(N.J. Super. Ct. App. Div. 2008) (finding that a bank that was a cotenant through
foreclosure with the wife of the defaulting mortgagor was constructively ousted from
a single-family home).
4. Contribution: sharing the costs. “[T]he protection of the interest of each cotenant
from extinction by a tax or foreclosure sale imposes on each the duty to contribute to
the extent of his proportionate share the money required to make such payments.” 2
AMERICAN LAW OF PROPERTY §6.17. Because failure to pay carrying costs increases
the risk that the asset will be lost to all cotenants, every concurrent owner has an
obligation to pay her share. See also Beshear v. Ahrens, 709 S.W.2d 60 (Ark. 1986)
(allowing contribution for mortgage payments and property taxes as “expenditures
necessarily made for the protection of the common property”).
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The majority rule is that cotenants out of possession need not share in the costs of
repairs in the absence of an agreement to do so. The idea is that questions “of how
much should be expended on repairs, their character and extent, and whether as a
matter of business judgment such expenditures are justified,” are too uncertain for
judicial resolution. 2 AMERICAN LAW OF PROPERTY §6.18. But then, in a partition
action, cotenants who pay for repairs will get credit for them—does that make sense?
Further, some courts will allow contribution for “necessary” repairs. Palanza v. Lufkin,
804 A.2d 1141 (Me. 2002) (finding contribution towards necessary repairs justified,
even though some of the repairs had cosmetic effects). Some jurisdictions require a
cotenant to provide her fellow cotenants with notice and opportunity to object to the
repairs in order to be entitled to contribution. Anderson v. Joseph, 26 A.3d 1050 (Md.
Ct. Spec. App. 2011) (denying contribution for repairs that resulted from “massive
flooding” for failure to provide notice).
5. Accounting: the right to share in profits. Cotenants who allow others to use the
land, whether to exploit resources or to rent, must give other cotenants their shares of
any consideration received from the third-party users.
Recall that in at least some contexts one cotenant cannot unilaterally exercise the right
to exclude of the other cotenants. But that isn’t always true with respect to productive
uses of land by third parties with permission of one cotenant. To be sure, in some
states, a lease from only one co-owner is void and the lessee can be ejected. But in
other states, one cotenant can lease his interest, subject only to a duty to account to the
non-leasing cotenants for net profits. Swartzbaugh v. Sampson, 54 P.2d 73 (Cal. Ct.
App. 1936). Where there is such a duty, to whom does the lessee owe rent? The answer
is that she only owes rent to the leasing cotenant, unless she ousts the other cotenants.
Those other cotenants must look to a contribution action against the leasing cotenant.
The usual rule is that cotenants must account for the raw value of resources they extract
themselves, but particularly bad misbehavior by a cotenant may lead to an award of the
processed value. Kirby Lumber Co. v. Temple Lumber Co., 83 S.W.2d 638 (Tex. 1935)
(raw value of timber where timber was taken in good faith); cf. White v. Smyth, 214
S.W.2d 967 (Tex. 1948) (cotenant who mined asphalt without consent from other
cotenants had to account for net profits, although he took no more than his one-ninth
interest—resource could not be partitioned in kind because the quality and quantity of
asphalt varied sharply across the parcel in ways that could not be easily determined;
cotenant couldn’t take the most easily mined resources for himself and make his own
partition).
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Absent an ouster, an accounting usually just requires the cotenant to share the actual
value received, not the fair market value. Suppose a lease claims to be nonexclusive
and to only lease one cotenant’s share, and is for half of the fair market rental value of
the property. What should happen when the other cotenant seeks an accounting? See
Annot., 51 A.L.R.2d 388 (1957). Suppose the lease is made by one cotenant to spite or
harm another? Cf. George v. George, 591 S.W.2d 655 (Ark. Ct. App. 1979) (where 99year lease carried nominal rent and the court found an intent to defraud the cotenant,
the lease was set aside).
6. Tenants in possession; tenants out of possession. Martin applies the majority rule
that—absent ouster—a cotenant in possession need not pay anything to cotenants out
of possession if she lives on and farms the land, absent an ouster. DesRoches v.
McCrary, 24 N.W.2d 511 (Mich. 1946) (no duty of cotenant in possession to pay rent
to other cotenants). Reciprocally, there is generally no ouster if one cotenant requests
her share of the fair rental value of the land from the occupying cotenant, and the
occupying cotenant denies the request. Von Drake v. Rogers, 996 So. 2d 608 (La. Ct.
App. 2008) (“A co-owner in exclusive possession may be liable for rent, but only
beginning on the date another co-owner has demanded occupancy and been refused.”)
(emphasis added). But a few cases hold that denying a request for rent constitutes an
ouster. Eldridge v. Wolfe, 221 N.Y.S. 508 (1927).
Why might courts have developed a practice of requiring cotenants to account for
profits from mining and cutting lumber, but not for profits from their own farming or
residential uses of co-owned property? Logically, the cotenant in possession should
have to pay—she is receiving a benefit from using the land, the fair market rental value
of the property, and the other cotenants are not. As Martin itself proves, if she did rent
the land to a third party, she would be required to share that benefit with the other coowners. This rule creates an incentive for the cotenant to stay in possession rather
than renting the land out, even if renting to a third party would be more efficient
overall.
7. The relationship between contribution and accounting. If one cotenant occupies
the property, with no ouster, and seeks contribution from the non-occupant for his
share of the taxes and insurance, can the non-occupant offset the amounts due by the
value of living on the property to the occupant? Many courts say yes. See, e.g., Barrow
v. Barrow, 527 So. 2d 1373 (Fla. 1988) (occupant can only recover contribution if nonoccupant’s proportionate share of expenses is greater than the value of occupying the
property); Esteves v. Esteves, 775 A.2d 163 (N.J. Super. Ct. App. Div. 2001) (parents
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who occupied house for 18 years were entitled to be reimbursed by their son for half
of the expenses of mortgage and maintenance, but the son was allowed to set off the
amount equal to the reasonable value of the parents’ sole occupancy). This view is not
strictly consistent with the majority rule that non-ousting tenants are not liable to nonpossessing cotenants for rent, because it means that the occupant is essentially paying
the non-occupant for being able to live on the land. Is this rule, which will often keep
much actual cash from changing hands nonetheless fair?
The minority view is that no defensive offset is available against a cotenant in
possession, absent ouster. Yakavonis v. Tilton, 968 P.2d 908 (Wash. Ct. App. 1998);
Baird v. Moore, 141 A.2d 324 (N.J. App. Div. 1958) (cotenant out of possession may
not offset value of occupation if cotenant’s possession is not adverse). Which rule
makes more logical sense? More practical sense?
Basically, courts often have enough flexibility to rule in the direction the equities
point—finding that contribution is or isn’t available. The need to balance the harms
from imposition of unexpected costs on cotenants out of possession with the harms
to the property’s value from negligent co-owners also gives courts flexibility.
Ultimately, because partition is always available to cotenants who truly can’t agree, it
makes sense for courts to point them towards partition if they’re fighting over
maintenance and repairs.
In Martin, when calculating Garis and Peggy’s 1/8th share of the “net rent,” what
expenses should be deducted? Can they be required to pay a share of the costs of
developing the mobile home park, such as putting in sewage lines and electrical
connections? Note that a cotenant is generally not entitled to contribution from other
cotenants for the costs of improving the property (see note 9 below). But, on partition,
the improver is entitled to the part of the property that’s been improved, or in case of
sale to the lesser of (1) the increase in value due to the improvement or (2) the cost of
the improvement. Should that rule be applied in an accounting as well?
Lewis suggests that courts use ouster to enagage in the “equitable second-guessing that
so often blurs crystalline rules.” Compare Spiller v. Mackereth, 334 So. 2d 859 (Ala.
1976) (lock change wasn’t ouster), with Morga v. Friedlander, 680 P.2d 1267 (Ariz. Ct.
App. 1984) (lock change was ouster). In effect, courts use ouster, plus the majority
rule allowing offset of the value of an occupying cotenant’s possession in an action for
contribution, to nullify the formal rule that any cotenant can occupy the land rent-free,
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regardless of the size of his or her share, and still seek contribution for necessary
expenses.
8. Quasi-fiduciary duties of good faith. Cotenants are fiduciaries for each other, at
least if they receive their interests in the same will or grant, or through the same
inheritance. Poka v. Holi, 357 P.2d 100 (Haw. 1960) (cotenants have fiduciary
obligation to give other cotenants adequate notice of adverse claims to the property);
but see Wilson v. S.L. Rey, Inc., 21 Cal. Rptr. 2d 552 (Ct. App. 1993) (cotenants who
acquire interests at different times by different instruments have no fiduciary
relationship).
If one co-tenant buys the property at a tax sale or a foreclosure sale, the title is shared
with the other co-tenants: for these purposes, the co-tenant is a fiduciary for the other
co-tenants. Johnson v. Johnson, 465 S.W.2d 309 (Ark. 1971); but see Stevenson v. Boyd,
96 P. 284 (Cal. 1908) (finding assertion of cotenant’s claim barred by laches after fouryear delay). However, the purchasing co-tenant can seek contribution from the others,
so that they bear their fair share of the cost of removing the lien or mortgage. Why
would the courts create such a fiduciary duty? What is the abusive practice that they
fear?
9. Improvements. Any cotenant has the right to make improvements to the property,
but other cotenants are not required to contribute. See Knight v. Mitchell, 240 N.E.2d
16 (Ill. Ct. App. 1968) (cotenant couldn’t seek contribution for developing and running
oil wells, though he could set off necessary operating expenses in other cotentant’s
action for accounting of his profits); Johnie L. Price, The Right of a Cotenant to
Reimbursement for Improvements to the Common Property, 18 BAYLOR L. REV. 111 (1966).
In most states, the interests of the improver will be protected if that won’t harm the
interests of the other cotenants. This usually allows the improver to recoup the added
value, if any, resulting from his improvements on partition, or in accounting for rents
and profits. Graham v. Inlow, 790 S.W.2d 428 (Ark. 1990). But if improvements fail
to pay off, the improver is not compensated—he bears all the risk. A few cases limit
recovery to the smaller of the amount of value added by an improvement or its costs.
The risk is borne by the improver, but the rewards are shared. Which rule makes more
sense?
10. Waste. If one cotenant damages the property or harms its value, other cotenants may
have claims for waste. While the ordinary remedy for waste is treble damages, courts
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will normally just hold the tenant in possession accountable for net profits from
exploiting the property, as explained above in the discussion of removing timber and
similar resources. CASNER, AMERICAN LAW OF PROPERTY, §6.15. What effects does
that rule have on the use of land?
Waste claims are correspondingly difficult to win. Davis v. Byrd, 185 S.W.2d 866 (Mo.
1945) (mining by one cotenant isn’t waste as long as the other cotenants aren’t excluded
and the miner doesn’t willfully or negligently injure the land); Hihn v. Peck, 18 Cal. 640
(1861) (cotenant may remove valuable timber “to an extent corresponding to [his] share
of the estate” without commiting waste); Prairie Oil & Gas Co. v. Allen, 2 F.2d 566
(9th Cir. 1924) (cotenant can produce oil without other cotenants’ consent, but cannot
exclude other cotenants from exercising the same right). Consider whether time
matters: should the standard for what constitutes waste vary depending on whether the
other interest-holders have present interests (and could act now to reap their own
benefits, albeit at greater cost than waiting) or future interests (and thus can only wait
for their ownership interests to attach)?
11. Adverse possession by cotenants against other cotenants. Because each cotenant
has the right to possession, it can be difficult for one cotenant to possess adversely to
another. Under New York law, a cotenant must have exclusive possession for ten years
before the statutory adverse possession can even begin to run against other cotenants.
Myers v. Bartholomew, 697 N.E.2d 160 (N.Y. 1998). After all, the fact that someone
else is living on and using the land lacks its ordinary significance to cotenants. Ex parte
Walker, 739 So. 2d 3 (Ala. 1999) (cotenant’s redemption of property at tax sale in 1934,
payment of all property taxes, exclusive possession for over 50 years, demolition of old
buildings, and harvesting of timber did not show adverse possession against other
cotenants); Tremayne v. Taylor, 621 P.2d 408 (Idaho 1980) (“A cotenant who claims
to have adversely possessed the interest of his cotenants must prove that the fact of
adverse possession was ‘brought home’ to the cotenants.”); Hare v. Chisman, 101
N.E.2d 268 (Ind. 1951) (husband’s sole possession of house after wife died was not
adverse to his cotenants, her heirs, since it “was not an unnatrual act of them to permit
their father to occupy this property, collect the income, pay the expense, and enjoy the
surplus”); West v. Evans, 175 P.2d 219 (Cal. 1946) (cotenant out of possession must
have either actual or constructive notice of hostility; recordation of a deed isn’t
sufficient notice); GA. CODE ANN. §44-6-123 (allowing cotenant to gain title by adverse
possession if she “effects an actual ouster, retains exclusive possession after demand,
or gives [her] cotenant express notice of adverse possession”).
Page 12 of 31
Adverse possession is, however, not entirely impossible in these circumstances. See
Johnson v. James, 377 S.W.2d 44 (Ark. 1964) (presumption against adversity is even
stronger when cotenants are related, though presumption was overcome through sole
possession for 36 years, where cotenants knew of a will purportedly granting occupant
sole possession and said nothing); McCree v. Jones, 430 N.E.2d 676 (Ill. Ct. App. 1981)
(finding in favor of claimant who’d been in possession for thirty years under a quitclaim
deed purporting to give title to the entire property).
2.
Partition
Delfino v. Vealencis
436 A.2d 27 (Conn. 1980)
ARTHUR H. HEALEY, Associate Justice.
The central issue in this appeal is whether the Superior Court properly ordered the sale,
pursuant to General Statutes s 52-500, 1 of property owned by the plaintiffs and the defendant
as tenants in common.
The plaintiffs, Angelo and William Delfino, and the defendant, Helen C. Vealencis, own, as
tenants in common, real property located in Bristol, Connecticut. The property consists of an
approximately 20.5 acre parcel of land and the dwelling of the defendant thereon. The
plaintiffs own an undivided 99/144 interest in the property, and the defendant owns a 45/144
interest. The defendant occupies the dwelling and a portion of the land, from which she
operates a rubbish and garbage removal business. 3 Apparently, none of the parties is in actual
possession of the remainder of the property. The plaintiffs, one of whom is a residential
developer, propose to develop the property, upon partition, into forty-five residential building
lots.
In 1978, the plaintiffs brought an action in the trial court seeking a partition of the property
by sale with a division of the proceeds according to the parties’ respective interests. The
General Statutes s 52-500 states: “Sale of Real or Personal Property Owned by Two or More. Any court of equitable
jurisdiction may, upon the complaint of any person interested, order the sale of any estate, real or personal, owned by two
or more persons, when, in the opinion of the court, a sale will better promote the interests of the owners.… A conveyance
made in pursuance of a decree ordering a sale of such land shall vest the title in the purchaser thereof, and shall bind the
person entitled to the life estate and his legal heirs and any other person having a remainder interest in the lands; but the
court passing such decree shall make such order in relation to the investment of the avails of such sale as it deems necessary
for the security of all persons having any interest in such land.”
3 The defendant’s business functions on the property consist of the overnight parking, repair and storage of trucks,
including refuse trucks, the repair, storage and cleaning of dumpsters, the storage of tools, and general office work. No
refuse is actually deposited on the property.
1
Page 13 of 31
defendant moved for a judgment of in-kind partition and the appointment of a committee to
conduct said partition. The trial court, after a hearing, concluded that a partition in kind could
not be had without “material injury” to the respective rights of the parties, and therefore
ordered that the property be sold at auction by a committee and that the proceeds be paid into
the court for distribution to the parties.
On appeal, the defendant claims essentially that the trial court’s conclusion that the parties’
interests would best be served by a partition by sale is not supported by the findings of
subordinate facts, and that the court improperly considered certain factors in arriving at that
conclusion. In addition, the defendant directs a claim of error to the court’s failure to include
in its findings of fact a paragraph of her draft findings.
General Statutes 52-495 authorizes courts of equitable jurisdiction to order, upon the
complaint of any interested person, the physical partition of any real estate held by tenants in
common, and to appoint a committee for that purpose. 7 When, however, in the opinion of
the court a sale of the jointly owned property “will better promote the interests of the owners,”
the court may order such a sale under s 52-500.
It has long been the policy of this court, as well as other courts, to favor a partition in kind
over a partition by sale. … Due to the possible impracticality of actual division, this state, like
others, expanded the right to partition to allow a partition by sale under certain circumstances.
The early decisions of this court that considered the partition-by-sale statute emphasized that
“(t)he statute giving the power of sale introduces … no new principles; it provides only for an
emergency, when a division cannot be well made, in any other way. The court later expressed
its reason for preferring partition in kind when it stated: “(A) sale of one’s property without
his consent is an extreme exercise of power warranted only in clear cases.” Ford v. Kirk, 41
Conn. 9, 12 (1874). Although under General Statutes s 52-500 a court is no longer required to
order a partition in kind even in cases of extreme difficulty or hardship; it is clear that a
partition by sale should be ordered only when two conditions are satisfied: (1) the physical
attributes of the land are such that a partition in kind is impracticable or inequitable; and (2)
the interests of the owners would better be promoted by a partition by sale. Since our law has
for many years presumed that a partition in kind would be in the best interests of the owners,
the burden is on the party requesting a partition by sale to demonstrate that such a sale would
better promote the owners’ interests.
If the physical partition results in unequal shares, a money award can be made from one tenant to another to equalize
the shares.
7
Page 14 of 31
The defendant claims in effect that the trial court’s conclusion that the rights of the parties
would best be promoted by a judicial sale is not supported by the findings of subordinate facts.
We agree.
Under the test set out above, the court must first consider the practicability of physically
partitioning the property in question. The trial court concluded that due to the situation and
location of the parcel of land, the size and area of the property, the physical structure and
appurtenances on the property, and other factors, a physical partition of the property would
not be feasible. An examination of the subordinate findings of facts and the exhibits, however,
demonstrates that the court erred in this respect.
It is undisputed that the property in question consists of one 20.5 acre parcel, basically
rectangular in shape, and one dwelling, located at the extreme western end of the property.
Two roads, Dino Road and Lucien Court, abut the property and another, Birch Street,
provides access through use of a right-of-way. Unlike cases where there are numerous
fractional owners of the property to be partitioned, and the practicability of a physical division
is therefore drastically reduced; in this case there are only two competing ownership interests:
the plaintiffs’ undivided 99/144 interest and the defendant’s 45/144 interest. These facts,
taken together, do not support the trial court’s conclusion that a physical partition of the
property would not be “feasible” in this case. Instead, the above facts demonstrate that the
opposite is true: a partition in kind clearly would be practicable under the circumstances of
this case.
Although a partition in kind is physically practicable, it remains to be considered whether a
partition in kind would also promote the best interests of the parties. In order to resolve this
issue, the consequences of a partition in kind must be compared with those of a partition by
sale.
The trial court concluded that a partition in kind could not be had without great prejudice to
the parties since the continuation of the defendant’s business would hinder or preclude the
development of the plaintiffs’ parcel for residential purposes, which the trial court concluded
was the highest and best use of the property. The court’s concern over the possible adverse
economic effect upon the plaintiffs’ interest in the event of a partition in kind was based
essentially on four findings: (1) approval by the city planning commission for subdivision of
the parcel would be difficult to obtain if the defendant continued her garbage hauling business;
(2) lots in a residential subdivision might not sell, or might sell at a lower price, if the
defendant’s business continued; (3) if the defendant were granted the one-acre parcel, on
which her residence is situated and on which her business now operates, three of the lots
Page 15 of 31
proposed in the plaintiffs’ plan to subdivide the property would have to be consolidated and
would be lost; and (4) the proposed extension of one of the neighboring roads would have to
be rerouted through one of the proposed building lots if a partition in kind were ordered. The
trial court also found that the defendant’s use of the portion of the property that she occupies
is in violation of existing zoning regulations. The court presumably inferred from this finding
that it is not likely that the defendant will be able to continue her rubbish hauling operations
from this property in the future. The court also premised its forecast that the planning
commission would reject the plaintiffs’ subdivision plan for the remainder of the property on
the finding that the defendant’s use was invalid. These factors basically led the trial court to
conclude that the interests of the parties would best be protected if the land were sold as a
unified unit for residential subdivision development and the proceeds of such a sale were
distributed to the parties.
… The defendant claims that the trial court erred in finding that the defendant’s use of a
portion of the property is in violation of the existing zoning regulations, and in refusing to
find that such use is a valid nonconforming use. … [T]he court’s finding in this regard must
be stricken as unsupported by sufficient competent evidence. We are left, then, with an
unassailed finding that the defendant’s family has operated a “garbage business” on the
premises since the 1920s and that the city of Bristol has granted the defendant the appropriate
permits and licenses each year to operate her business. There is no indication that this practice
will not continue in the future.
Our resolution of this issue makes it clear that any inference that the defendant would probably
be unable to continue her rubbish hauling activity on the property in the future is unfounded.
We also conclude that the court erred in concluding that the city’s planning commission would
probably not approve a subdivision plan relating to the remainder of the property. Any such
forecast must be carefully scrutinized as it is difficult to project what a public body will decide
in any given matter. … The court’s finding indicates that only garbage trucks and dumpsters
are stored on the property; that no garbage is brought there; and that the defendant’s business
operations involve “mostly containerized … dumpsters, a contemporary development in
technology which has substantially reduced the odors previously associated with the rubbish
and garbage hauling industry.” These facts do not support the court’s speculation that the
city’s planning commission would not approve a subdivision permit for the undeveloped
portion of the parties’ property.
The court’s remaining observations relating to the effect of the defendant’s business on the
probable fair market value of the proposed residential lots, the possible loss of building lots
Page 16 of 31
to accommodate the defendant’s business 13 and the rerouting of a proposed subdivision road,
which may have some validity, are not dispositive of the issue. It is the interests of all of the
tenants in common that the court must consider; and not merely the economic gain of one
tenant, or a group of tenants. The trial court failed to give due consideration to the fact that
one of the tenants in common has been in actual and exclusive possession of a portion of the
property for a substantial period of time; that the tenant has made her home on the property;
and that she derives her livelihood from the operation of a business on this portion of the
property, as her family before her has for many years. A partition by sale would force the
defendant to surrender her home and, perhaps, would jeopardize her livelihood. It is under
just such circumstances, which include the demonstrated practicability of a physical division
of the property, that the wisdom of the law’s preference for partition in kind is evident.
…Since the property in this case may practicably be physically divided, and since the interests
of all owners will better be promoted if a partition in kind is ordered, we conclude that the
trial court erred in ordering a partition by sale, and that, under the facts as found, the defendant
is entitled to a partition of the property in kind.
It should be noted in this regard that a partition in kind would result in a physical division of the land according to the
parties’ respective interests. The defendant would, therefore, not obtain any property in excess of her beneficial share of
the parties’ concurrent estates.
13
Page 17 of 31
Subdivision plot plan for the 20.5 acre parcel
Notes and Questions
12. Implementing partition in kind. In a partition in kind, how should the court
determine who gets what land? See Anderson v. Anderson, 560 N.W.2d 729 (Minn.
Ct. App. 1997) (cotenants awarded parcel on which they had a residence); Barth v.
Barth, 901 P.2d 232 (Okla. Ct. App. 1995) (considering cotenant’s ownership of
adjacent land). In Louisiana, partition in kind is not allowed unless parcels of equal
value can be created, and parcels must be drawn by lot. See McNeal v. McNeal, 732
So. 2d 663 (La. Ct. App. 1999). Is this a good idea? What about “I cut, you choose”
as a way of implementing partition in kind? There’s a large literature in game theory,
mathematics, and computer science on these problems, dealing with more than two
parties, heterogenous resources, etc. Very little of this seems to have made its way into
law. But see Note, Cutting the Baby in Half, 77 BROOK. L. REV. 263 (2011) (surveying
some of the literature).
Page 18 of 31
Some state laws also provide for allotment, in which the court allocates part of the
property to a cotenant—which can include an owelty payment if the allocated portion
is more than the cotenant’s share—and then sells the remainder. E.g., 25 DEL. CODE
§730; S.C. CODE ANN. §15-61-50; VA. CODE ANN. §8.01-83. Sometimes a cotenant
must show an equitable claim to allotment in order to get it. HAW. REV. STAT. §§6687(5)-(6).
13. Partition by sale as the default? Consider the court’s claims about the preference
for partition in kind. Partition in kind will essentially always diminish the market value
of the land compared to partition by sale. Do other, intangible interests nonetheless
adequately justify a preference for partition in kind?
14. Partitioning a future interest. Can owners who own only a future interest seek partition
of that interest? At common law, the answer was no because they lacked a present
possessory interest, and some states still adhere to this rule. See, e.g., Trieber v. Citizens
State Bank, 598 N.W.2d 96 (N.D. 1999). Many states, however, allow co-owners of
vested future interests to seek partition of that interest. See, e.g., ARK. CODE §18-60401.
C.
Joint Tenancy
Joint tenancy (in some jurisdictions called a “joint tenancy with right of survivorship” and
abbreviated “JTWROS”) is a form of ownership that can be unilaterally severed and turned
into a tenancy in common. Its distinctive feature is the right of survivorship: If a joint tenancy
is not severed before a joint tenant’s death, that joint tenant’s interest disappears and the
remaining tenant continues to own an undivided interest, allowing the survivor to avoid
probate. Thus, joint tenancy is most widely used today as a substitute for a will. 2
In modern times, tenancy in common is preferred to other kinds of co-ownership. A
conveyance “to Alice and Beth” therefore creates a tenancy in common by default, though it’s
relatively standard to include “as tenants in common” to avoid all uncertainty. The creation
and continuation of a joint tenancy is beset with traps, even though it may well be most coowners’ preferred form of ownership for residential property. Some states have statutes that
Note that the federal government does not follow the fiction that nothing passes at death to the surviving joint tenant;
the decedent’s interest will be taxed as if it were transferred to the survivor, though if the joint tenants are married no tax
will be due.
2
Page 19 of 31
appear to abolish the joint tenancy, but they will often find joint tenancies with a right of
survivorship if the intent to create them is clear enough. See, e.g., McLeroy v. McLeroy, 40
S.W.2d 1027 (Tenn. 1931).
1.
Creating a Joint Tenancy
The traditional test for the creation and continuation of a joint tenancy depended upon the
presence of the four “unities”: (1) time—the joint tenants’ interests were all acquired at the
same time; (2) title—the interests were all acquired by the same document or by joint adverse
possession; (3) interest—the tenants’ shares must all be equal and undivided; and (4)
possession—all joint tenants must have equal rights to possess the whole (in the absence of
an agreement to the contrary 3:
Unless the unities existed at the tenancy’s inception, or if they were broken at any
subsequent point, the joint tenancy was automatically severed, and the owners became
tenants in common. This requirement meant, for example, that the owner of property
could not create a joint tenancy in himself and others without first making use of a
straw man. Because all joint tenants had to receive their interest in the property at the
same time and by the same title, the owner had first to convey to a third party, who
would in turn convey the property back to the grantor and the other tenants. They
would then take in joint tenancy. Without this purely formal step, however, they would
be only tenants in common.
R. H. Helmholz, Realism and Formalism in the Severance of Joint Tenancies, 77 NEB. L. REV. 1 (1998).
Today (as was already largely true in the 1950s), the necessity for using a straw man to create
a joint tenancy has been largely eliminated from American law, sometimes by judicial decision
but more often by statutory enactment. We will examine this issue further below, when we
discuss severance of a joint tenancy.
A conveyance “to Alice and Beth as joint tenants, and not as tenants in common,” will create
a joint tenancy in most states. See Kurpiel v. Kurpiel, 271 N.Y.S.2d 114 (N.Y. Sup. Ct. 1966)
(joint tenancy created). Most states consider that this language confirms the grantor’s intent—
“joint” alone might have been misunderstood by a layperson who thinks that tenants in
At common law, joint tenants could not hold unequal shares, and attempting to create such a tenancy would create a
tenancy in common. However, modern courts are increasingly willing to accept a clearly shown intent to hold unequal
shares. See Moat v. Ducharme, 555 N.E.2d 897 (Mass. App. 1990) (unequal contributions); Jezo v. Jezo, 127 N.W.2d 246
(Wis. 1964) (evidence of contrary intent can override presumption of equal shares).
3
Page 20 of 31
common are joint owners in a general sense, though some states accept “to Alice and Beth
jointly” as sufficient to create a joint tenancy. ***
***
2.
Severance of a Joint Tenancy
Severance is any act that destroys one or more of the four unities required to
maintain a joint tenancy. The legal consequence of severance is that the joint tenancy
is converted to a tenancy in common. (For those rare joint tenancies involving three or
more joint tenants, one joint tenant may sever the joint tenancy as to his interest, but
the others remain joint tenants with each other.) The traditional rule for severance
required either that all the tenants expressly agree to hold as tenants in common, or
that one of the tenants convey to a third person in order to destroy the unities
(particularly the unities of time and title), to turn a joint tenancy into a tenancy in
common. In modern times, a conveyance from oneself as joint tenant to oneself as
tenant in common is likely to succeed just as well as a conveyance by one tenant to a
straw owner plus a reconveyance from the straw. ***
***
Joint tenants may also take acts that are more ambiguous with respect to their rights. Courts
then have to decide what kinds of acts are sufficient to work a severance.
Harms v. Sprague
473 N.E.2d 930 (1984)
Thomas J. MORAN, Justice.
Plaintiff, William H. Harms, filed a complaint to quiet title and for declaratory judgment in the
circuit court of Greene County. Plaintiff had taken title to certain real estate with his brother
John R. Harms, as a joint tenant, with full right of survivorship. The plaintiff named, as a
defendant, Charles D. Sprague, the executor of the estate of John Harms and the devisee of
all the real and personal property of John Harms. Also named as defendants were Carl T. and
Mary E. Simmons, alleged mortgagees of the property in question. Defendant Sprague filed a
counterclaim against plaintiff, challenging plaintiff’s claim of ownership of the entire tract of
property and asking the court to recognize his (Sprague’s) interest as a tenant in common,
subject to a mortgage lien. At issue was the effect the granting of a mortgage by John Harms
had on the joint tenancy. Also at issue was whether the mortgage survived the death of John
Harms as a lien against the property.
Page 21 of 31
The trial court held that the mortgage given by John Harms to defendants Carl and Mary
Simmons severed the joint tenancy. Further, the court found that the mortgage survived the
death of John Harms as a lien against the undivided one-half interest in the property which
passed to Sprague by and through the will of the deceased. The appellate court reversed,
finding that the mortgage given by one joint tenant of his interest in the property does not
sever the joint tenancy. Accordingly, the appellate court held that plaintiff, as the surviving
joint tenant, owned the property in its entirety, unencumbered by the mortgage lien.…
Two issues are raised on appeal: (1) Is a joint tenancy severed when less than all of the joint
tenants mortgage their interest in the property? and (2) Does such a mortgage survive the
death of the mortgagor as a lien on the property?
A review of the stipulation of facts reveals the following. Plaintiff, William Harms, and his
brother John Harms, took title to real estate located in Roodhouse, on June 26, 1973, as joint
tenants. The warranty deed memorializing this transaction was recorded on June 29, 1973, in
the office of the Greene County recorder of deeds.
Carl and Mary Simmons owned a lot and home in Roodhouse. Charles Sprague entered into
an agreement with the Simmons whereby Sprague was to purchase their property for $25,000.
Sprague tendered $18,000 in cash and signed a promissory note for the balance of $7,000.
Because Sprague had no security for the $7,000, he asked his friend, John Harms, to co-sign
the note and give a mortgage on his interest in the joint tenancy property. Harms agreed, and
on June 12, 1981, John Harms and Charles Sprague, jointly and severally, executed a
promissory note for $7,000 payable to Carl and Mary Simmons. The note states that the
principal sum of $7,000 was to be paid from the proceeds of the sale of John Harms’ interest
in the joint tenancy property, but in any event no later than six months from the date the note
was signed. The note reflects that five monthly interest payments had been made, with the last
payment recorded November 6, 1981. In addition, John Harms executed a mortgage, in favor
of the Simmonses, on his undivided one-half interest in the joint tenancy property, to secure
payment of the note. William Harms was unaware of the mortgage given by his brother.
John Harms moved from his joint tenancy property to the Simmons property which had been
purchased by Charles Sprague. On December 10, 1981, John Harms died. By the terms of
John Harms’ will, Charles Sprague was the devisee of his entire estate. The mortgage given by
John Harms to the Simmonses was recorded on December 29, 1981.
Prior to the appellate court decision in the instant case no court of this State had directly
addressed the principal question we are confronted with herein-the effect of a mortgage,
Page 22 of 31
executed by less than all of the joint tenants, on the joint tenancy. Nevertheless, there are
numerous cases which have considered the severance issue in relation to other circumstances
surrounding a joint tenancy. All have necessarily focused on the four unities which are
fundamental to both the creation and the perpetuation of the joint tenancy. These are the
unities of interest, title, time, and possession. The voluntary or involuntary destruction of any
of the unities by one of the joint tenants will sever the joint tenancy.
In a series of cases, this court has considered the effect that judgment liens upon the interest
of one joint tenant have on the stability of the joint tenancy. In Peoples Trust & Savings Bank
v. Haas (1927), 328 Ill. 468, 160 N.E. 85, the court found that a judgment lien secured against
one joint tenant did not serve to extinguish the joint tenancy. As such, the surviving joint
tenant “succeeded to the title in fee to the whole of the land by operation of law.”
…Clearly, this court adheres to the rule that a lien on a joint tenant’s interest in property will
not effectuate a severance of the joint tenancy, absent the conveyance by a deed following the
expiration of a redemption period. It follows, therefore, that if Illinois perceives a mortgage
as merely a lien on the mortgagor’s interest in property rather than a conveyance of title from
mortgagor to mortgagee, the execution of a mortgage by a joint tenant, on his interest in the
property, would not destroy the unity of title and sever the joint tenancy.
Early cases in Illinois, however, followed the title theory of mortgages. In 1900, this court
recognized the common law precept that a mortgage was a conveyance of a legal estate vesting
title to the property in the mortgagee. Consistent with this title theory of mortgages, therefore,
there are many cases which state, in dicta, that a joint tenancy is severed by one of the joint
tenants mortgaging his interest to a stranger. Yet even the early case of Lightcap v. Bradley,
cited above, recognized that the title held by the mortgagee was for the limited purpose of
protecting his interests. The court went on to say that “the mortgagor is the owner for every
other purpose and against every other person. The title of the mortgagee is anomalous, and
exists only between him and the mortgagor * * *.” Lightcap v. Bradley (1900), 186 Ill. 510,
522-23, 58 N.E. 221.
Because our cases had early recognized the unique and narrow character of the title that passed
to a mortgagee under the common law title theory, it was not a drastic departure when this
court expressly characterized the execution of a mortgage as a mere lien …
[A] joint tenancy is not severed when one joint tenant executes a mortgage on his interest in
the property, since the unity of title has been preserved. As the appellate court in the instant
case correctly observed: “If giving a mortgage creates only a lien, then a mortgage should have
Page 23 of 31
the same effect on a joint tenancy as a lien created in other ways.” Other jurisdictions following
the lien theory of mortgages have reached the same result.
…An inherent feature of the estate of joint tenancy is the right of survivorship, which is the
right of the last survivor to take the whole of the estate. Because we find that a mortgage given
by one joint tenant of his interest in the property does not sever the joint tenancy, we hold
that the plaintiff’s right of survivorship became operative upon the death of his brother. As
such plaintiff is now the sole owner of the estate, in its entirety.
Further, we find that the mortgage executed by John Harms does not survive as a lien on
plaintiff’s property. A surviving joint tenant succeeds to the share of the deceased joint tenant
by virtue of the conveyance which created the joint tenancy, not as the successor of the
deceased. The property right of the mortgaging joint tenant is extinguished at the moment of
his death. While John Harms was alive, the mortgage existed as a lien on his interest in the
joint tenancy. Upon his death, his interest ceased to exist and along with it the lien of the
mortgage. Under the circumstances of this case, we would note that the mortgage given by
John Harms to the Simmonses was only valid as between the original parties during the lifetime
of John Harms since it was unrecorded. In addition, recording the mortgage subsequent to
the death of John Harms was a nullity. As we stated above, John Harms’ property rights in the
joint tenancy were extinguished when he died. Thus, he no longer had a property interest upon
which the mortgage lien could attach….
Notes and Questions
1. The result in Harms, in which the mortgage disappears if the joint tenant who granted
it predeceases the other joint tenant, is the most common result in “lien theory” states,
which represent the vast majority of states today. However, for the reasons discussed
in Harms, the results in “title theory” states are mixed. Compare Downing v. Downing,
606 A.2d 208 (Md. 1992) (no automatic severance although Maryland is a “title” state),
with Schaefer v. Peoples Heritage Savings Bank, 669 A.2d 185 (Me. 1996) (mortgage
severs joint tenancy), and General Credit Co. v. Cleck, 609 A.2d 553 (Pa. Sup. Ct. 1992)
(same); Taylor Mattis, Severance of Joint Tenancies by Mortgages: A Contextual Approach, 1977
S. ILL. U. L.J. 27.
Suppose we adopted an intent-based standard to determine whether the joint tenancy
was severed. How would we have determined John Harms’ intent after his death?
Page 24 of 31
2. Is the result in Harms fair? Suppose John had instead survived William. Would the
mortgage burden half the interest in the property, or the whole interest? See People v.
Nogarr, 330 P.2d 858 (Cal. Ct. App. 1958) (if the mortgaging joint tenant survives the
nonmortgaging joint tenant, the lien attaches to the entire interest). Wouldn’t the
mortgagees get a windfall if the value of their secured interest suddently jumped in
value? On the other hand, isn’t that just the flip side of the loss they suffer if William
survives John? Should we create a hybrid that would protect the lender, and burden
William’s interest after John’s death, even without severing?
Suppose the mortgage had worked a severance. If John had paid the mortgage off
before dying, should the severance be undone and the joint tenancy restored? What
would the parties likely have expected?
3. Given the result in Harms, how will lenders behave when one co-owner seeks to take
out a loan? Sophisticated lenders make mistakes, see Texas American Bank v. Morgan,
733 P.2d 864 (N.M. 1987), but mostly the lenders at risk are ordinary people, often
relatives or friends of the borrower.
What about a creditor who has a judgment against one joint tenant—what should she
do to make sure she can get access to the property to satisfy the judgment? In practice,
the creditor must act during the debtor’s life to attach a lien to the property and
foreclose on that lien. See, e.g., Rembe v. Stewart, 387 N.W.2d 313 (Iowa 1986);
Jamestown Terminal Elev., Inc. v. Knopp, 246 N.W.2d 612 (N.D. 1976) (judgment
lien on joint tenancy property did not survive when debtor cotenant died before
execution sale); Jackson v. Lacy, 97 N.E.2d 839 (Ill. 1951) (severance doesn’t occur at
foreclosure, but only on expiration of the redemption period after foreclosure sale); see
also Harris v. Crowder, 322 S.E.2d 854 (W. Va. 1984) (a creditor may do what the debtor
could do, so a creditor of one joint tenant could convert a joint tenancy into a tenancy
in common, as long as the other cotenant’s interest wouldn’t be otherwise prejudiced;
an example of prejudice would be the loss of a favorable interest rate on a mortgage
due to the timing of the creditor’s act).
4. What shares exist after severance? The general assumption is that joint tenants have
equal shares after severance—after all, the unity of interest requires that all joint tenants
have equal shares before severance. However, if the equities strongly favored unequal
shares, courts might well bend the rules. Compare Cunningham v. Hastings, 556 N.E.2d
12 (Ind. Ct. App. 1990) (though one cotenant paid the purchase price, the creation of
a joint tenancy entitles each party to an equal share of the proceeds on partition;
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equitable adjustments to cotenants’ equal shares are allowed for tenancies in common,
not joint tenancies), with Moat v. Ducharme, 555 N.E.2d 897 (Mass. App. Ct. 1990)
(presumption of equal shares is rebuttable because partition must be equitable), and
Jezo v. Jezo, 127 N.W.2d 246 (Wis. 1964) (presumption of equal shares is rebuttable).
5. Joint tenants who kill. The general rule is that a person who intentionally causes
another’s death loses any inheritance rights he otherwise would have had from his
victim’s estate. In Estate of Castiglioni, 47 Cal. Rptr. 2d 288 (Ct. App. 1995), the surviving
spouse petitioned for half of the property she held in joint tenancy with her deceased
husband, of whose murder she was subsequently convicted. California Probate Code
Section 251 provides in part: “A joint tenant who feloniously and intentionally kills
another joint tenant thereby effects a severance of the interest of the decedent so that
the share of the decedent passes as the decedent’s property and the killer has no rights
by survivorship.” Thus, there was no question that she could not inherit the entire
property through a right of survivorship; her husband’s share went to her husband’s
heir, a daughter.
However, years before the murder, the husband put his separate property in joint
tenancy with the wife. The question was therefore whether the husband’s share was an
undivided half of the former joint tenancy property, or whether equitable tracing rules
should apply to increase that share. The court of appeals held the latter, and that it was
error to give the killer half of the joint tenancy property. The court noted that, had the
tenancy been severed by divorce rather than by murder, the widow/murderer wouldn’t
have received any of the property at issue, because under California’s community
property regime the husband would have been reimbursed by tracing his contributions
to their joint property. CAL. FAMILY CODE § 2640(b). Thus, equitable principles
dictated that she should not be allowed to benefit from her crime, and her share would
be reduced by the amount necessary to reflect his contribution.
What should have happened if the couple had lived in a state without community
property rules, the source of the court’s equitable tracing principle? Suppose section
251 instead read: “If a joint tenant feloniously and intentionally kills another joint
tenant, the share of the decedent passes as though the killer had predeceased the
decedent.” What would the result be in Estate of Castiglioni in that situation?
6. Simultaneous death. What happens when two joint tenants die in the same accident,
or the order of their death can’t be determined? The Uniform Simultaneous Death
Act initially provided that, without sufficient evidence of the order of death, half of the
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property should be distributed as if the first joint tenant had died first, and the other
half as if the other joint tenant had died first. This rule led to some unpleasant litigation
and “gruesome” attempts by heirs to prove that a specific joint tenant died first. The
1993 revision of the USDA states that, unless a governing instrument such as a will
specifies otherwise, the half-and-half approach will be used in the absence of “clear
and convincing” evidence that one joint tenant survived the other by 120 hours.
7. Joint accounts with rights of survivorship. “Joint accounts” are bank accounts
generally held by couples, children and parents, or business partners. Each account
holder has the ability to draw on the account. Many joint accounts come with a right
of survivorship: If a joint account owner dies, the survivor(s) get all the money—
creating another way around the delays involved in probating a will.
In many states, joint account-holders do not have the same undivided interest and
rights to the use and enjoyment of the deposits that joint owners of real property do.
That is, the donee/nondepositor isn’t entitled to the funds unless she survives the
donor/depositor.
See UNIFORM PROBATE CODE §6-211 (2008).
On the
donor/depositor’s death, the majority rule is that the surviving joint tenant takes the
balance in a joint account unless there is clear and convincing evidence that the
depositor’s intent was to create a “convenience account,” that is, an account that was
supposed to be used by the nondepositor—usually a younger relative—to take care of
the depositor’s business affairs. Some jurisdictions conclusively presume that the
surviving joint tenant should receive the balance. See Wright v. Bloom, 635 N.E.2d 31
(Ohio 1994).
What should happen if Orlando deposits $10,000 in a joint bank account with Abbie,
and Abbie then withdraws $5000 from the account while Orlando is alive, without his
permission or later agreement? Orlando can force Abbie to return the money. Why
not presume that Orlando intended a present gift to Abbie? By the same logic, her
creditors can’t reach all the money to satisfy their claims against her unless and until
she survives the donor/depositor. N. William Hines, Personal Property Joint Tenancies:
More Law, Fact and Fancy, 54 MINN. L. REV. 509 (1970).
However, the presumption against a present gift can be overcome by clear and
convincing evidence. In a minority of jurisdictions, joint account owners have equal
shares in the account during their lifetimes, as in a joint tenancy in land.
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Joint accounts with a right of survivorship can be used as a will substitute, but there
are potential tax consequences, not to mention risks of dispute during the time the
person who put the money in the account is alive, or disputes after death when alternate
heirs argue that the account was never intended to benefit the survivor. If the
depositor’s intent is to give whatever money is in the account to the non-depositing
joint account holder when the depositor dies but not before, many states allow
accounts to be designated “payable on death,” preventing the non-depositing account
holder from withdrawing the money while the depositor is alive. In the alternative, a
revocable inter vivos trust will also provide the desired results. As for an elderly parent
who wants her child to use money for her care, a better solution would be a power of
attorney, making her child into her agent with the power to act on her behalf. This
power of attorney would end with the parent’s death.
D.
Marital Interests
1.
Tenancy by the Entirety
U.S. v. Craft
535 U.S. 274 (2002)
Justice O’CONNOR delivered the opinion of the Court.
This case raises the question whether a tenant by the entirety possesses “property” or “rights
to property” to which a federal tax lien may attach. Relying on the state law fiction that a
tenant by the entirety has no separate interest in entireties property, the United States Court
of Appeals for the Sixth Circuit held that such property is exempt from the tax lien. We
conclude that, despite the fiction, each tenant possesses individual rights in the estate sufficient
to constitute “property” or “rights to property” for the purposes of the lien, and reverse the
judgment of the Court of Appeals.
***
1. Creating a tenancy by the entirety. Traditionally, a tenancy by the entirety was
created by granting property “to X and Y, husband and wife, as tenants by the entirety.”
Today, X and Y can be any spouses, and states that recognize tenancies by the entirety
often presume that a transfer “to A and B, [spouses],” creates that estate. See, e.g.,
Constitution Bank v. Olson, 620 A.2d 1146 (Pa. Super. Ct. 1993). Other states always
presume a tenancy in common even when the co-owners are married, so a clear
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expression of the requisite intent is required. See MISS. CODE ANN. §89-11-7. As a
rule, the magic words “tenants by the entirety” should be used.
If the cotenants are not married, the magic words will not work. In Riccelli v. Forcinito,
595 A.2d 1322 (Pa. Super. Ct. 1991), Sam Riccelli and Carmen Pirozek bought property
in 1962 “as tenants by the entireties with the right of survivorship.” However, they
weren’t married at the time of the purchase, and so they couldn’t have a tenancy by the
entirety. What kind of tenancy did they have? The court reasoned: “The appropriate
form of tenancy is to be determined by the intention of the parties, ‘the ultimate guide
by which all deeds must be interpreted.’… [J]oint tenancy with the right of survivorship
best effectuates their intention to the extent legally permissible, that being the form of
tenancy for unmarried persons most nearly resembling the tenancy by the entireties
enjoyed by husband and wife, since in both instances the survivor takes the whole.”
The modern presumption in favor of tenancy in common yielded to a clearly expressed
contrary intent. See also Funches v. Funches, 413 S.E.2d 44 (Va. 1992) (“tenancy by the
entirety” with express survivorship language that was given to unmarried parties
created a joint tenancy because of the survivorship language). But see Smith v. Stewart,
596 S.W.2d 346 (Ark. Ct. App. 1980) (deed “to A and B, his wife,” when A and B were
unmarried, failed to create a joint tenancy; the relevant state statute required an express
declaration of joint tenancy with right of survivorship), aff’d, 601 S.W.2d 837 (Ark.
1980).
2. Divorce. Because marriage is a requirement for a tenancy by the entirety, divorce ends
that form of ownership. What should replace it? The modern preference is for tenancy
in common as a general rule, and many states follow that rule with tenancies by the
entireties that end by divorce. See, e.g., MICH. COMP. LAWS ANN. § 552.102. A few
states presume that a tenancy by the entirety is converted to a joint tenancy unless the
parties otherwise agree. See, e.g., Estate of Childress v. Long, 5888 So. 2d 192 (Miss.
1991).
3. Common law marriage. Common law marriage was widely recognized when access
to formal marriage was sometimes difficult, particularly in rural areas. However, it is
now recognized only in 11 states and the District of Columbia. Where it is recognized,
the parties must manifest an intent to be married and hold themselves out as husband
and wife. If they do so, they have exactly the same rights as any other married couple.
Is this a kind of “adverse possession” of the benefits of marriage?
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Many states abolished common law marriage on the theory that it was no longer
required, given the ease of accessing a marriage license, and that it encouraged people
to lie about whether they’d held themselves out as husband and wife. Moreover, a
marriage license makes it easy to understand who is entitled to pensions and other
benefits, which became more important as those types of assets became more
significant throughout the twentieth century.
2.
Community Property
Nine states, representing roughly 30% of the population of the U.S., recognize community
property for married people: Arizona, California, Idaho, Louisiana, Nevada, New Mexico,
Texas, Washington, and Wisconsin. Under community property regimes, marital property
belongs to each spouse equally. Each spouse has a right to pass on his or her share to anyone
by will, making community property different from joint tenancy; however, it is also possible
to hold community property with a right of survivorship, highly similar to joint tenancy. In
the absence of a right of survivorship, a surviving spouse is typically entitled to some of the
community property when the other spouse dies intestate; his or her share generally depends
on whether there are surviving issue (children and other descendants), and how many there
are.
The basic idea of community property is that a marriage is a cooperative endeavor, and each
spouse contributes to gains, whether directly or indirectly. ***
Property owned before marriage, as well as property acquired by inheritance or gift during the
marriage, remains separate property in most states. ***
In general, spouses are free to take property as separate property by agreement, and to convert
property from one regime to the other by agreement. If community and separate property are
commingled, tracing the shares may prove very difficult, and the party with the burden of
showing that the property is separate may have a hard time prevailing. Carefully kept records
may allow a tracing spouse to overcome the presumption that assets held during marriage are
community property. *** As for outstanding debt paid off in part with community property,
California apportions community and separate property according to the contributions made.
Thus, a person who has a house subject to a mortgage before she marries, and then pays the
remainder of the mortgage with money earned during marriage, will own the house partly as
separate property and partly as community property.
***
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A spouse may dispose of half of the community property at his or her death. There is no right
of survivorship, but the other half belongs to the survivor. The decedent can allocate the
property however she wants in a will; if there is no will, then some community property states
make the other spouse the heir, while others give the decedent’s issue priority.
There is no such thing as a tenancy by the entireties in a community property state; there can
be joint tenancy or tenancy in common, but property held in those forms is separate property.
Like a tenancy by the entireties, community property can only exist between married people.
Moreover, neither spouse alone can convey his or her undivided share to another person,
except to the other spouse. Community property is not subject to partition. Without
agreement, the spouse’s only option to separate the couple’s undivided interests is divorce,
which will result in an equal or “equitable” division of community property, depending on the
state. California, New Mexico, and Louisiana divide community property and debts equally, 4
while courts use the more flexible equitable division in the other community property states.
In California, absent a written agreement to the contrary, a spouse who contributes separate
property to acquiring community property must be reimbursed for the contribution at divorce,
though the spouse can’t get interest or an adjustment for a change in the value of the property,
and the reimbursement can’t exceed the net value of the property at the time the property was
acquired. CAL. FAMILY CODE §2640(b). Can you see why the legislature felt it necessary to
impose the net value cap? What kind of unsavory activities might result if the rule were
different?
If a married couple moves to a non-community property state, community property retains its
character, which can lead to some complicated situations.
4
In the absence of agreement to the contrary or deliberate misappropriation of community property by one spouse.
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How to Brief or IRAC a case:
Issue:
A good issue statement includes the party names, the name of the rule
of law the brief is analyzing, and a key fact. What is the issue before the court?
What Problem is the court trying to solve? The issue should be one or two
sentences, state the party names and the relevant legal terms.
Rule:
The rule is the law that governs the outcome of the case. It should be
stated as a general principle and not include any party names or facts. The
rule should be stated as a list or an outline- not in paragraph form.
Application:
The application is a discussion of how the rule applies to the facts of a case.
The application shows how you can analyze arguments on both sides and
is the most important skill you will learn. The application is normally paragraphs long.
It should be a written debate – not simply a statement of the conclusion. Whenever possible,
present both sides of any issue.
Conclusion:
What was the result of the case? Did the appellate or supreme court affirm,
reverse or reverse and remand the lower court’s decision? The case gives you a background
of the facts along with the judge’s reasoning and conclusion. When you brief cases,
you are summarizing the judge’s opinion.