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Girard Acceptance Corp. v. Stoop

Decided: December 24, 1980.

GIRARD ACCEPTANCE CORPORATION, PLAINTIFF,
v.
JOSEPH B. STOOP AND CATHERINE I. STOOP, DEFENDANTS



Dreier, J.s.c.

Dreier

[177 NJSuper Page 194] The question before the court is whether a curtesy interest exists in property once held by the entireties but which, following foreclosure of the husband's equity of redemption, his wife holds as a tenant in common with the foreclosing mortgagee.*fn1

Defendants Joseph and Catherine Stoop owned certain real property, which was their family home. By violence and threats of further violence, Stoop forced his wife and their three children out of the home, but he continued to live in it, joined there by a female friend. The Stoop home was encumbered by two mortgages. During the period that Mrs. Stoop was absent both mortgages became delinquent whereupon plaintiff, Girard Acceptance Corp., the second mortgagee, elected to foreclose. Papers were served on Stoop's friend, on the assumption that she was Mrs. Stoop. Mrs. Stoop herself received no notice and the first she learned of the foreclosure was when she saw the house advertised for sheriff's sale. At that point she retained an attorney and sought relief in Chancery court. On July 23, 1979, Judge Morton Greenberg ordered the default judgment obtained by plaintiff set aside, insofar as it affected the right, title and interest of defendant Catherine Stoop.

Subsequent to Judge Greenberg's order Mrs. Stoop sold her interest in the premises. This court now is asked to decide if Joseph Stoop had a curtesy interest in the interest sold by his wife since Continental Title Insurance Company has required that proceeds of the sale*fn2 be placed in escrow until the issue is resolved. Catherine Stoop has petitioned for an order declaring that the Girard foreclosure cut off all interests held by her husband.

After foreclosure on the joint debt of both spouses all interest of both defendants in the subject property ceased to exist. If Judge Greenberg's order of July 23rd had created a new interest in fee in Mrs. Stoop, a curtesy interest might be thought of as then attaching to such interest, since she would have been seized of an estate of inheritance during coverture. See N.J.S.A.

3A:35-2.*fn3 In such an instance, the circumstances of this case might have justified the court's imposition of a constructive trust. Cf. In re Estate of Kalfus , 81 N.J. Super. 435 (Ch.Div.1963). The court need not, however, address these questions since it seems clear that Judge Greenberg's order did not create a new interest in Mrs. Stoop. It resurrected her original interest. She stood in the same position as if the debt which had been foreclosed were her husband's alone; that is, she held the property as tenant in common with the mortgagee. Newman v. Chase , 70 N.J. 254 (1976).

The question of Stoop's curtesy interest is not fully answered, however, by a finding that his wife had no more than her share of their previous tenancy by the entireties. No New Jersey authority the court has consulted addresses directly the question of whether tenants by the entirety hold, in addition to their own undivided interest in the whole estate,*fn4 a separable curtesy or dower interest in the undivided interest of the spouse. If such interest existed before the estate was divided, it would continue to exist when, as here, one spouse was left holding in common with a mortgagee.

Cases arising under the curtesy and dower statutes seem uniformly to involve property held separately by one or the other spouse. Yet the statute is not by its terms limited to property separately held:

The widower . . . shall be endowed, for the term of his natural life, of the 1 full and equal half part of all real estate whereof his wife, or another to her use,

was seized of an estate of inheritance at any time during coverture . . . N.J.S.A. 3A:35-2.*fn5

Nearly a century ago, in Babbitt v. Day , 41 N.J. Eq. 392, 393 (Ch.1886) Chancellor Runyon came close to disposing of the issue. Dealing there with a wife's claim to dower*fn6 in lands separately held by her husband in joint tenancy with a third party, he held she had no dower in such ...


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