Volume 4 Number 3




Title Tips by Tute

Volume 4, Number 3

Dear Tute: 

    Here's the question . . . and I don't think the answer is in the title examination. But I haven't heard back from our underwriting counsel, and I need an answer fast!

    A and B took title as tenants by the entirety with common law right of survivorship. There is a judgment against A, but A died over five years ago. Normally, I would say the judgment was not a problem, because a judgment needs to be against both owners to attach to T/E property.

    However, I was over in the chancery indices doing another title, and discovered that A and B were divorced three years before they purchased the property! I checked the marriage indices, and no remarriage could be found. Suddenly, I'm thinking I have a problem.

    First, would the judgment attach? Second, who owns the property? I initially reported title vested in B pursuant to the survivorship clause, but if they weren't married, they couldn't be tenants by the entirety, and then there wouldn't be any survivorship clause, would there?

                                                        Befuddled in the backwoods

Dear Befuddled:

    You do need to get the title insurer's underwriting counsel involved, and fast. This is not the open and shut question we might wish it to be, even though, surprise of surprises, yours is not the first case in which the grantees of a T/E deed were not married to one another.

    Let's look at what the Supreme Court of Virginia has said on the topic. These are interesting cases, because the people in them are not very "nice."

    In Sue Ellen Gant v. Helen Gant, 237 Va. 588 (1989), Junius and Helen Gant took title as T/E. They were divorced at the time, but exploring reconciliation. They moved into the property, lived together for a while, but Junius later moved out, married Sue Ellen, had a child with her (another one of the plaintiffs in the suit; left Sue Ellen, and had another child with yet another woman. Helen remained in the house during all of Junius' perambulations. Eventually, the philandering Junius died, and Sue Ellen and her daughter claimed an interest in the title.

    They claimed that the divorce from Helen worked to extinguish the survivorship between Junius and Helen. The Court disagreed, noting that people who are not husband and wife use survivorship, and that the statute setting forth that principle applied to properties owned by the parties at the time of the divorce. They were free to continue to take title to property with the right of survivorship after that divorce if they so desired.

    Sue Ellen also argued that since they were not married, they could not take title as T/E, and that meant they were only tenants in common.

    The Court rejected this idea as well, noting that T/E and Joint Tenants with right of survivorship are very similar. Without going into law school stuff, out of five possible "unities" of title, T/E has all five, and JTwRoS has four. The Court came very close to laying out a hard and fast rule that any deed which contains those four unities created a joint tenancy with right of survivorship. 

    The justices distinguished their earlier decision in Camp v. Camp, 220 Va. 595 (1978). In that case, mother and son took title as "tenants in common with the right of survivorship as at common law." In the earlier case, the Court ruled the two concepts were "mutually repugnant" and in the process of applying various rules of construction, the survivorship provision was struck from the deed. In Gant, there were no repugnant features, as the two estates are very similar.

    In yet another philanderer's title, Gisele Funches v. Pranee Funches, 243 Va. 26 (1992), the court ruled that even though Robert Funches' marriage to Pranee appeared to be bigamous, and therefore void, the real estate acquired as T/E with right of survivorship belonged to Pranee free of any claim of dower in Gisele. 

    I might point out that "survivorship" was abolished between joint tenants in 1787 and between tenants by the entireties in 1888 (codified as Virginia Code 55-20), unless it manifestly appears from the tenor of the instrument that the interest of the one dying should then belong to the others (codified as Code 55-21). It appears that if the necessary language appears in the deed, and there are no "construction" issues, then the survivorship feature will survive.

    So, with a plausible reason to find title vested in the surviving joint tenant, the remaining question is whether or not the judgment attached to the real estate. Again, the Supreme Court provides some guidance in finding an answer. In the case of Jones v. Conwell, 227 Va. 176 (1984), Jones obtained a judgment against Conwell and docketed it. Since Conwell's property was owned as joint tenant with right of survivorship, Jones filed a creditors' bill, seeking to partition the property, and pay his lien from Conwell's portion of the proceeds. The Court upheld his right to do this, noting that a joint tenant, even in a survivorship estate, can dispose of the interest during his or her lifetime. A creditor should be able to reach any interest that his debtor can reach.

    If A were still alive, and the property were being sold, I would suggest, and think your underwriting counsel would agree, that the judgment must be satisfied with payment from the proceeds of the sale or refinancing. A would still be in a position to dispose of his interest, it could be partitioned, and the creditor could enforce the lien.

    But you noted that A is dead. If the survivorship feature remains intact, and as noted above, there is reason to think it did, then on A's death, title to the entire property vested in B, free of any claims of A's spouse, heirs, or creditors. In one of the citations relied upon by the Court in the Jones case, it stated 

    During the continuance of a joint tenancy, each joint tenant has a liability to have his fractional interest taken for the satisfaction of his debts. Any such taking, when completed, works a severance of the joint tenancy. Thus, a judgment creditor must not only levy on the land, but sell it and have any redemption period expire before the severance is completed. (emphasis added)

    It appears the right of any creditor of A to reach the real estate, or more properly stated, A's rights to reach the real estate, have terminated. It either happened at A's death, at the earliest, or upon the expiration of the period in which creditors could file a claim against the estate of A, at the latest. 

    Since this is all speculative and dependent upon the clarification of a few minor points by the Supreme Court, I strongly suggest that you get with your underwriting counsel, and make sure that your title insurer would reach the same conclusion. As a title examiner, you have the enviable role of finding the issues, not solving them. In this case, it worked out. Maybe you should change your name to "the luckiest title examiner in the world."



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