Killgo v. James, 5-2936

• Citation: 236 Ark. 537,367 S.W.2d 228
• Decision Date: 06 May 1963
• Docket Number: No. 5-2936,5-2936
• Parties: Evelyn KILLGO et al., Appellants, v. Loretta JAMES, Executrix, et al., Appellees.
• Court: Supreme Court of Arkansas

Page 228

367 S.W.2d 228

236 Ark. 537

Evelyn KILLGO et al., Appellants, v. Loretta JAMES, Executrix, et al., Appellees.

No. 5-2936.

Supreme Court of Arkansas.

May 6, 1963.

Clayton Farrar and Wood, Chesnutt & Smith by Ray S. Smith, Jr., Hot Springs, for appellants.

M. C. Lewis, Jr., Hot Springs, for appellees.

GEORGE ROSE SMITH, Justice.

In 1949 Charles and Ruby Killgo bought a home in Hot Springs, as tenants by the entirety. In 1954 the couple were divorced by a decree of the Garland Chancery Court. The decree approved a property settlement by which the parties agreed to sell the home later on and divide the proceeds. The property had not been sold, however, when Charles died in October of 1959. His heirs, the appellants, then brought this suit for partition against Charles's former wife, Ruby Killgo Dunn, upon the theory that the property settlement and divorce decree had converted the tenancy by the entirety into a tenancy in common, in which case the plaintiffs would have inherited a half interest in the property upon Charles's death. The chancellor rejected that theory, holding that the tenancy by the entirety had continued in existence, so that at Charles's death the title vested by survivorship in Ruby Killgo Dunn. Mrs. Dunn died pending this appeal; the cause has been revived against her heirs and personal representative.

The principal issue--whether the estate was changed into a tenancy in common--turns upon the construction of this language in the settlement agreement: 'It is understood that the decree to be entered herein in to provide that Charlie C. Killgo is to have possession, use and control of the [home], together with the furniture therein, until such time as the parties to this case may agree on a sales price for such, at which time, on such agreement, the proceeds are first to be used to reimburse Charlie C. Killgo for all monies he has paid or will pay on the mortgage on same after date of August 1953, after which the balance of the proceeds is to be divided between the parties hereto equally.'

The 1954 divorce decree recited the substance of the paragraph just quoted and concluded by declaring that 'the property rights settlement between said parties * * * is hereby approved and confirmed in all particulars.' (We should add that at Charles's death there was pending a suit for partition that Ruby had filed in 1957, in which she charged that Charles had violated the settlement agreement by refusing to consider a sale of the property. We do not dwell upon this earlier case, as we think it had no effect upon the title, either directly or by way of an estoppel.)

The chancellor was right in holding that the agreement and decree did not change the parties' estate into a tenancy in common. It will be seen upon reflection that the Killgos, like any married couple in the same situation, had a choice of two courses. First, they could, without affecting the nature of their tenancy by the entirety, have simply agreed that they would attempt to sell the land, with the proceeds to be divided equally. In that case the estate by the entirety, with its characteristic right of survivorship, would undoubtedly continue to exist until a sale was accomplished. Secondly, the Killgos, at least by invoking the chancellor's statutory power over tenancies by the entirety, could have agreed that the estate would immediately become a tenancy in common, thereby utilizing the divorce decree to extinguish the right of survivorship. Ark.Stats.1947, § 34-1215; Brimson v. Brimson, 227 Ark. 1045, 304 S.W.2d 935.

We think it plain that the agreement in the case at bar falls in the first category. We cannot find one sentence or even one word, in the agreement or in the decree, to support the conclusion that the parties had an affirmative intention to bring about an immediate termination of the tenancy by the entirety. It is desirable that titles to real property rest in certainty and stability. For a couple to declare that they will sell a piece of property at some future date and divide the proceeds is not even a roundabout way of saying that they will also become tenants in common at once. The language that the Killgos selected, with the advice of counsel, is perfectly consistent with a desire on their part to leave the estate untouched until a sale should be completed. We do not feel justified in rewriting the contract by reading into it an additional clause that the parties chose to leave out.

There is a second point in the case. The appellants asked in their complaint that the property be ordered sold and that the proceeds be applied first, in accordance with the property settlement agreement, to recompense the plaintiffs for mortgage payments totaling $1,640 that were made by Charles Killgo after August of 1953, with the remaining proceeds to be divided equally between the opposing litigants. Even though we are holding that the tenancy by the entirety continued in force, there is still the question whether the appellants are entitled to assert a charge against the property for the mortgage payments that are involved.

A majority of the court have concluded, although not upon the same reasoning, that the appellants are entitled to charge the property with the mortgage payments. Justices WARD, ROBINSON, and JOHNSON are of the opinion that the tenancy by the entirety was converted into a tenancy in common, in which case the mortgage payments are recoverable as a matter of course under the settlement agreement. Justice McFADDIN joins in the majority opinion with respect to the tenancy by the entirety but, for the reasons stated in his concurring opinion, is of the view that the mortgage payments are recoverable. The Chief Justice, Justice FRANK HOLT, and the writer would affirm the decree.

The decree is accordingly affirmed in part and reversed in part, and the cause is remanded for further proceedings.

McFADDIN, Justice (concurring).

I agree with that part of the Majority Opinion which holds that the entirety estate had not been dissolved at the time of the death of Charles Killgo; but I am of the opinion that Mr. Killgo's estate is entitled to recover the $1640.00 which he paid after August 1953 to retire the principal indebtedness on the mortgage of the entirety estate.

When Mr. and Mrs. Killgo were divorced they entered into a property settlement agreement which provided:

'It is understood that the decree to be entered herein is to provide that Charlie C. Killgo is to have possession, use and control of the place of the parties * * * together with the furniture therein, until such time as the parties to this case may agree on a sales price for such, at which time, on such agreement, the proceeds are first to be used to reimburse Charlie C. Killgo for all monies he has paid or will pay on the mortgage on same after date of August 1953, after which the balance of the proceeds is to be divided between the parties hereto equally.' (Emphasis supplied.)

The settlement agreement was approved by the divorce decree, and it determined the disposition to be made of the proceeds of the sale of the premises. The Chancery Court held that Mr. Killgo's occupancy of the property required him to pay the taxes, insurance, repairs, and interest on the mortgage indebtedness; that portion of the decree is not questioned. But the Chancery Court held that Mr. Killgo's occupancy of the property also required him to pay the principal on the mortgage indebtedness. That holding is challenged because it is in direct opposition to the terms of the property settlement agreement of the parties (approved by the Court) which specifically recited that on the sale of the property, Mr. Killgo could recover all principal payments he made on the mortgage after August 1953; and these principal payments were definitely established at being $1640.00.

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