Carey's, Inc. v. Carey

• Decision Date: 20 January 1988
• Docket Number: No. 86-1120,86-1120
• Citation: 25 Mass.App.Ct. 290,517 N.E.2d 850
• Parties: CAREY'S, INC. v. M. Lorraine CAREY.
• Court: Appeals Court of Massachusetts

Page 850

517 N.E.2d 850

25 Mass.App.Ct. 290

CAREY'S, INC. v. M. Lorraine CAREY.

No. 86-1120.

Appeals Court of Massachusetts,

Plymouth.

Argued Nov. 16, 1987.

Decided Jan. 20, 1988.

Victor Bass (Molly H. Sherden, Boston, with him), for defendant.

Jerome M. Leonard (Elizabeth Paine, Boston, with him), for plaintiff.

Before GREANEY, C.J., and KAPLAN and FINE, JJ.

GREANEY, Chief Justice.

We affirm the judgment of the Superior Court ordering the defendant to convey to the plaintiff her interest in four parcels of real estate located in the towns of Whitman, Pembroke, and Randolph and in the city of Brockton.

A judge of the Superior Court sitting without a jury heard the case. His findings of fact may be summarized as follows.

The plaintiff, Carey's, Inc., has provided school bus service to Whitman, Pembroke, Randolph, and Brockton since the 1960's. The company was operated by two brothers, Fred Carey, Jr., the defendant's husband, and Paul Carey. Fred was the principal manager of the business and made all the major operational, policy, and corporate decisions.

The Whitman property was acquired by the plaintiff in February, 1964, as a facility for parking and servicing its school buses. The down payment for that property was paid by the plaintiff, but title was placed in the names of Fred Carey, Jr., and the defendant, his wife, as tenants by the entirety. All improvements to the property were paid for by the plaintiff, as were real estate taxes and other expenses. The defendant made the mortgage payments with money furnished to her each month by the plaintiff.

In 1967, the plaintiff purchased properties in Brockton and Randolph, again for exclusive use in its business. Title to those parcels was placed in the defendant's name alone. In 1969, the plaintiff acquired property in Pembroke, also for business purposes. Title to the property was placed in the name of Fred Carey, Jr. As was the case with the Whitman property, the down payments for the Randolph, Brockton, and Pembroke properties were furnished by the plaintiff. Also all improvements, real estate taxes, and other expenses pertaining to those properties were paid by the plaintiff, and the payments on the mortgages on each parcel were made by the defendant with payments received each month from the plaintiff.

In 1978, Fred Carey, Jr., advised his brother that he was arranging to have the four properties covered by leases so the company would be protected if anything should happen to either brother. The leases were to be given by the defendant, as lessor, ¹ and would provide the plaintiff with options to purchase the properties "as a protection to the company." The arrangement was also intended to provide some income for the defendant.

Fred Carey, Jr., then instructed the plaintiff's attorney, who had represented the plaintiff in the acquisition of the four properties, to prepare four leases, one for each property. Fred furnished an outline of the provisions of the leases, which were to be identical in form except for the amount of monthly rent and the purchase price in each option. He made it clear to the attorney that the plaintiff was to continue to retain full control of the properties. Fred stated that because he and Paul had been equal owners of the business, he wanted to ensure that if anything happened to either of them, the surviving owner would have complete control of the plaintiff's real estate. Fred also indicated that he intended to provide some income for his wife by means of the lease arrangements. The leases were prepared in early 1978 and backdated to August 31, 1977, the end of the plaintiff's 1977 fiscal year. The leases were "triple net"; that is, all improvements and expenses of every kind were to be borne by the plaintiff, with the defendant to receive monthly rental payments free of any deductions.

On January 24, 1978, the defendant, at Fred's request, went to the office of the plaintiff's attorney to review and execute the leases. Fred requested that the defendant be accompanied by their daughter Candace. Of the six Carey children, Candace had the closest relationship with her mother and also possessed the most business experience.

At the attorney's office, the provisions of the leases, including the options to purchase, were explained to the defendant, after which the leases were executed by her. The judge's findings as to what transpired at that important meeting, and other considerations relevant to the issues on appeal, are set forth in the margin. ² Subsequently four notices of lease were prepared, executed, and recorded in the appropriate registry of deeds.

On July 18, 1978, Fred Carey, Jr., died suddenly. The defendant consulted an attorney about her rights under the leases. On December 21, 1978, this attorney wrote to Paul Carey, requesting that the defendant be reimbursed for taxes paid by her in 1977 under the leases. The amounts requested by the defendant were paid. In March, 1979, the defendant consulted a second attorney, who requested additional payments under the retroactive application of the leases. These sums were also acknowledged by the plaintiff as appropriate and were paid. Between January, 1978, and April 30, 1985, the plaintiff paid the defendant rent under the leases totaling $83,598.88.

On May 21, 1982, the plaintiff notified the defendant that it was exercising the options contained in each of the four leases. The defendant consulted her attorney, who advised her not to recognize the validity of the options. On August 4, 1982, the plaintiff brought this lawsuit, seeking specific enforcement of the options and damages.

1. The Whitman property. It will be recalled that on August 31, 1977, the date of the lease to the Whitman property, title to that property was held by the defendant and her husband as tenants by the entirety. The lease to that property was signed by the defendant alone. In view of these facts, the defendant argues that her purported lease and the option are void because she was under a disability due to coverture.

The characteristics of a tenancy by the entirety in Massachusetts were well-settled in 1977. ³ In Licker v. Gluskin, 265 Mass. 403, 404, 164 N.E. 613 (1929) (quoting from Bernatavicius v. Bernatavicius, 259 Mass. 486, 487, 156 N.E. 685 [1927] ), those characteristics were summarized as follows:

"A conveyance to a husband and wife as tenants by the entirety creates one indivisible estate in them both and in the survivor, which neither can destroy by any separate act.... Alienation by either the husband or the wife will not defeat the right of the survivor to the entire estate on the death of the other. There can be no severance of such estate by the act of either alone without the assent of the other, and no partition during their joint lives, and the survivor becomes seised as sole owner of the whole estate regardless of anything the other may have done."

See also Pineo v. White, 320 Mass. 487, 490-492, 70 N.E.2d 294 (1946). In addition, prior to February 11, 1980, "the husband [was] during their joint lives entitled to the exclusive possession of real estate owned by the husband and wife as tenants by the entirety," Licker v. Gluskin, 265 Mass. at 406, 164 N.E. 613, that is, he had "full control of the property and the returns from it during his lifetime." West v. First Agricultural Bank, 382 Mass. 534, 543, 419 N.E.2d 262 (1981).

Thus, generally, in 1977, any attempted conveyance of property held in a tenancy by the entirety by one tenant during the lifetime of the other was void. Both spouses had to join in a deed in order to convey the entire estate and destroy both survivorships. See Pierce v. Chace, 108 Mass. 254, 258 (1871); Licker v. Gluskin, 265 Mass. at 404-407, 164 N.E. 613; West v. First Agricultural Bank, 382 Mass. at 536 n. 4, 419 N.E.2d 262. However, the husband, acting alone, could dispose of his right to control and profits of the property during his lifetime and of his survivorship. Although the wife could not dispose of her survivorship by her sole act, she could do so with "the assent in writing of the husband." Licker v. Gluskin, 265 Mass. at 406-407, 164 N.E. 613. See West, supra 382 Mass. at 536 n. 4, 419 N.E.2d 262. In addition, where one spouse conveyed his or her interest in a tenancy by the entirety to the other spouse, a deed signed only by the former and the oral assent or acceptance of the deed by the latter were sufficient to effect the conveyance. In Donahue v. Hubbard, 154 Mass. 537, 537-538, 28 N.E. 909 (1891), the court approved of a husband's releasing all his rights in a tenancy by the entirety to his wife. The initial conveyance was made to a third party by means of a quitclaim deed signed only by the husband. The third party, on the same day, executed and delivered a quitclaim deed to the wife. The court reasoned that both conveyances "were made with the knowledge and oral assent" of the wife and held that title was thereby vested solely in her. Id. at 539, 28 N.E. 909. In Hale v. Hale, 332 Mass. 329, 125 N.E.2d 142 (1955), the court concluded that a wife could convey to her husband all right, title, and interest in property held by them as tenants by the entirety. The court reasoned that conveyance to one's spouse differed from conveyance to a third person, as the latter would impair the spouse's rights, whereas conveyance to one's spouse would add to the spouse's rights. The court held that "acceptance in such a case by one spouse of the other's deed operates as an assent to the conveyance." Id. at 332, 125 N.E.2d 142. See Bernatavicius v. Bernatavicius, 259 Mass. at 487, 156 N.E. 685.

With regard to leases made by the wife during the husband's lifetime of property owned as a (pre-1980) tenancy by the entirety, it was held in Cunningham v. Ganley, 267 Mass. 375, 377, 166 N.E. 712 (1929), that an oral agreement regarding the occupation and entitlement to profits of property held in the tenancy by the entirety...