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Newman v. Chase

Decided: May 18, 1976.

HOWARD C. NEWMAN, PLAINTIFF-RESPONDENT,
v.
ARTHUR D. CHASE AND DOROTHY A. CHASE, DEFENDANTS-APPELLANTS



For reversal and remandment -- Chief Justice Hughes, Justices Mountain, Clifford and Schreiber and Judge Conford. Concurring and dissenting -- Justices Sullivan and Pashman. The opinion of the Court was delivered by Mountain, J. Sullivan, J. (concurring and dissenting). Pashman, J. (concurring in part and dissenting in part).

Mountain

[70 NJ Page 257] Plaintiff, Howard C. Newman, purchased from the trustee in bankruptcy of defendant, Arthur D.

Chase, all of the latter's interest in certain property owned by Chase and his wife, Dorothy A. Chase, as tenants by the entirety. Mrs. Chase is also a defendant in this action. The property is the home of the defendants. Plaintiff seeks partition of the estate for the joint lives of Mr. and Mrs. Chase, of which he is now tenant in common with Mrs. Chase. The trial court, on the authority of the Appellate Division's treatment of a parallel situation in Silver Bay Homes v. Herrmann, 128 N.J. Super. 114 (App. Div. 1974) granted the relief sought, ordering a partition sale of the estate for the joint lives of the defendants, husband and wife. Both Judge Wiley, who entered the foregoing order, and Judge Kolovsky, who spoke for the Appellate Division in Silver Bay Homes, expressed strong dissatisfaction with the rule they each felt compelled, by force of precedent, to follow. The rule in question is that laid down by the former Court of Errors and Appeals in Schulz v. Ziegler, 80 N.J. Eq. 199 (E. & A. 1912), of which more will be said below. We granted defendants' motion for direct certification while their appeal was pending unheard in the Appellate Division, in order to review the rule thus twice placed in question.*fn1 For the reasons hereinafter set forth we now reverse.

The facts of the case are not in dispute. Defendants, Arthur and Dorothy Chase, took title as tenants by the entirety to a one-family house in Toms River, in November 1971, having obtained a mortgage for the full purchase price of $25,990 from the Lincoln Savings Bank. With their

two small children, they have occupied the home since January 5, 1973.*fn2 Defendant, Arthur D. Chase filed a petition in bankruptcy on October 2, 1972, and was discharged in bankruptcy on February 5, 1973. On November 20, 1972, plaintiff purchased from the trustee in bankruptcy all Mr. Chase's interest in the premises for a consideration of $1,000, and thereupon received a trustee's deed. Mrs. Chase, with her family, continued to occupy the property, denying access to Mr. Newman. Consequently, on October 22, 1974, Newman instituted this partition action, seeking in addition an accounting from Mrs. Chase for one-half the rental value of the premises from January 5, 1973. On motion for summary judgment, the trial court found for plaintiff and ordered a partition sale of the tenancy in common for the joint lives of Mr. and Mrs. Chase, specifying that the sale would not affect in any way rights of survivorship. A stay of the order was granted pending this appeal.

The history of the law relating to tenancies by the entirety in New Jersey need not be retraced here. It is discussed at length in this Court's opinion in King v. Greene, supra, 30 N.J. 395 (1959) and in Justice Hall's dissenting opinion in that case. 30 N.J. at 415. Since the adoption of the Married Women's Act of 1852, the rights of each spouse in property owned by them as tenants by the entirety have been the same. After the passage of that legislation, "[t]here was no longer any distinction between the spouses. Each could do what the other could." King v. Greene, supra, at 418 (Hall, J., dissenting). Each tenant by the entirety is a tenant in common with the other during the joint lives of the spouses. Upon the death of a spouse, the survivor is then the sole owner.*fn3

Since the decision in King v. Greene, supra, it has been the law of this State that the purchaser at an execution sale under a judgment entered against a tenant by the entirety acquires the right of survivorship of the debtor spouse as well as the interest of the latter in the life estate for the joint lives of husband and wife.*fn4 This statement rests upon the assumption that the levy under the judgment and the ensuing sale purport to reach and include all of the right, title and interest of the debtor spouse. The purchaser from a trustee in bankruptcy, such as the plaintiff here, acquires the same interest in the real estate of the bankrupt spouse as does the purchaser at judicial sale mentioned above. 11 U.S.C.A. ยง 110; In Re Ved Elva, Inc., 260 F. Supp. 978 (D.N.J. 1966). Hence Mr. Newman, at the time he instituted this action, had succeeded to both Mr. Chase's interest as tenant in common for the joint lives of Mr. and Mrs. Chase, and also the interest of which Mr. Chase would come into full possession and enjoyment should he survive his wife. It is solely as owner of the former interest that plaintiff here seeks relief by way of partition.

It is conceded that there may be no partition with respect to lands held by spouses as tenants by the entirety.

Dvorken v. Barrett, 100 N.J. Super. 306, 309 (App. Div. 1968) aff'd 53 N.J. 20 (1968); Lawrence v. Lawrence, 79 N.J. Super. 25, 32 (App. Div. 1963); Gery v. Gery, 113 N.J. Eq. 59 (E. & A. 1933). It is equally well settled that as between or among tenants in common partition may normally be had as of course. Drachenberg v. Drachenberg, 142 N.J. Eq. 127, 134 (E. & A. 1948); Wujciak v. Wujciak, 140 N.J. Eq. 487 (Ch. 1947). As we have said, plaintiff and defendant, Dorothy A. Chase, are now tenants in common of the estate for the joint lives of Arthur and Dorothy Chase. Yet despite their being tenants in common of this estate, we think that here the remedy of partition should not be available as a matter of right.

In Bilder v. Robinson, 73 N.J. Eq. 169 (Ch. 1907) suit was brought by a purchaser at execution sale of all the right, title and interest of a debtor-husband, in and to property held by him and his wife as tenants by the entirety. The bill of complaint sought the appointment of a receiver to collect rents and pay to complainant his proper share. The receiver was appointed. In the course of his opinion Vice Chancellor Stevenson indicated that had partition been sought, he might have been disposed to grant relief in that form. No authorities were cited to support this dictum. However, in Schulz v. Ziegler, supra, 80 N.J. Eq. 199 (E. & A. 1912) the Court of Errors and Appeals squarely held that partition may be had by the transferee of the interest of one spouse as against the other spouse. In Schulz, a father had conveyed to his daughter his interest in property which he held with his wife as tenants by the entirety; the daughter then sought, and was granted, partition of the possessory estate as between herself and her mother.

In Riccio v. Riccio, 101 A. 426 (Ch. 1917), our former Court of Chancery, giving a very broad interpretation to the holding in Schulz, concluded that the reasoning of that case applied to the situation in which one spouse sought partition as against the other spouse of the possessory interest during coverture. This decision was overruled in

Gery v. Gery, supra, where Justice Case, speaking for the Court, held that although the interests of husband and wife were "essentially" those of tenants in common, nevertheless during coverture each was seized of the indivisible whole of the property, so that there could be no partition.*fn5

The Appellate Division, in Silver Bay Homes v. Herrmann, supra, 128 N.J. Super. 114 (1974) was presented with substantially the same factual situation which exists here. Feeling itself bound by Schulz it determined, albeit reluctantly, that the purchaser of the husband's interest from his trustee in bankruptcy might have partition of the possessory interest for the joint lives of the spouses.

Certification was not sought in that case. The instant suit, however, presents an almost identical fact situation and affords us an opportunity to rule on the issue. We now decide that although a debtor's interest in property held as tenant by the entirety may be reached by his or her creditors, the remedy of partition is not automatically available to a purchaser at execution sale or to a grantee of a trustee in bankruptcy such as the plaintiff in this action.

As we have already indicated, there are a number of cases in New Jersey holding -- or at least stating -- that a tenant in common has an ...


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