Susser, J.c.c., Temporarily Assigned.
The issue in this case is whether the marital residence is subject to equitable distribution. To decide that issue it is necessary to trace the source of the funds used in the purchase of the residence as well as the title changes in the property from which the funds were derived.
This is a second marriage for both of the parties. Plaintiff and his first wife owned premises known as 74 Second Avenue, Little Falls, New Jersey, as tenants by the entirety. Upon her death plaintiff became the sole owner, and he was such sole owner upon his marriage to defendant in 1957. In the later part of 1960 plaintiff placed title of 74 Second Avenue in his and defendant's name as tenants by the entirety.
The circumstances surrounding this change of title were as follows: Mrs. Canova had left plaintiff and was staying
with her sister. Plaintiff asked her to return to him and she agreed to do so upon his assurance that the home in which they were living, 74 Second Avenue, Little Falls, would be placed in both their names. Upon her return plaintiff, on December 8, 1960, executed a deed with his wife in which the grantees were designated as "Joseph Canova and Dorothy M. Canova, his wife, as tenants by the entirety." Consideration on the deed was shown as $1 and other good and valuable consideration. The deed further contained the following recitation: "The purpose of this deed is to create a tenancy by the entirety in the above described premises in Joseph Canova and Dorothy M. Canova, his wife, pursuant to R.S. 37:2-18."
N.J.S.A. 37:2-18 provides that "any conveyance heretofore or hereafter made by a married man or married woman to himself or herself and spouse of any real estate held in fee in severalty by such married man or married woman shall be construed to vest an estate by the entirety in such husband and wife, in fee."
Subsequently, in 1967 plaintiff and defendant executed a mortgage for these premises, and in July 1971 executed a correctional deed for the same premises which contained the same recitation of intent to create a tenancy by the entirety.
In 1971, 74 Second Avenue was sold. Both the contract of sale and the deed of conveyance were signed by plaintiff and defendant. Thereafter Mr. and Mrs. Canova purchased the present marital home at 7 Notch Road, Little Falls. The purchase price was $42,000 and was paid for by use of the $31,000 received from the 74 Second Avenue sale plus the proceeds of a jointly executed bond and mortgage in the sum of $10,000. Title was taken in the name of plaintiff and defendant as tenants by the entirety.
Plaintiff contends that this property is not subject to equitable distribution. He relies on Painter v. Painter , 65 N.J. 196 (1974), which holds:
Clearly any property owned by husband or wife at the time of marriage will remain the separate property of such spouse and in the event of divorce will not qualify as an asset eligible for distribution. As to this the statute is explicit. We also hold that if such property owned at the time of the marriage later increases in value such increment enjoys a like immunity. Furthermore the income or other usufruct derived from such property as well as any asset for which the original property may be exchanged or into which it, or the proceeds of its sale, may be traceable shall similarly be considered the separate property of ...