Klorfine v. Cole

• Decision Date: 25 January 1927
• Parties: KLORFINE v. COLE ET AL.
• Court: Oregon Supreme Court

252 P. 708

121 Or. 76

KLORFINE v. COLE ET AL.

Supreme Court of Oregon

January 25, 1927

In bank.

Appeal from Circuit Court, Polk County; W. M. Ramsey, Judge.

Suit by G. Klorfine against Ernest Cole, Vera B. Wells, and others. Decree foreclosing mortgages and directing sale of property and application of surplus to defendants Ernest L. Wells and Vera B. Wells. Plaintiff appeals, and defendant Ernest Cole cross-appeals. Decree modified.

This is a foreclosure proceeding. The petition alleges three causes of suit, the first and second based upon mortgages, and the third grounded upon a deed given to secure an indebtedness. The property involved is a tract of real estate situate in Polk county. The following constitute the important stipulated facts in the case:

On January 7, 1924, the Ernest Wells Realty Company, an Oregon corporation, was dissolved by proclamation of the Governor for failure to pay its annual license fees, and was never reinstated. On March 29, 1924, defendants Ernest L. Wells and Vera B. Wells, husband and wife, were the owners, as tenants by the entirety, of the real property described in plaintiff's complaint, and on that day attempted to convey to the corporation above mentioned that real property. On June 28, 1924, defendant Ernest Cole was a judgment creditor of Ernest L. Wells, and on that date Cole caused a duly certified transcript of his judgment to be docketed in the lien docket of the circuit court of Polk county, Or. On July 25, 1924, the corporation known as Ernest Wells Realty Company, by Ernest L. Wells, president, and Vera B. Wells secretary, executed and delivered to this plaintiff, G Klorfine, a deed purporting to convey to her the real property described in the complaint, and on the same day the deed was filed for record with the county recorder of Polk county. Thereafter this suit was instituted.

Based upon the facts as stipulated, the court found that, at all times mentioned in the pleadings, Ernest L. Wells and Vera B Wells were husband and wife, and that the real property involved was conveyed to them by one deed; that they owned and held the land described therein as tenants by the entirety; and that, on March 29, 1924, they attempted to convey this land to the Ernest Wells Realty Company, a corporation.

As conclusions of law the court found that, because the corporation had been previously lawfully dissolved for failure to pay the license fee to the state, and by reason thereof possessed no capacity to receive the attempted conveyance, such attempted conveyance was null and void, and failed to convey such property to the corporation, and that as a consequence, plaintiff's third cause of suit must fail. The court further held that, because Ernest L. Wells was a tenant by the entirety, the judgment of Ernest Cole against him was not a lien upon the real property involved.

A decree was entered foreclosing the first and second mortgages, and directing that the property be sold and the proceeds applied to the payment thereof, and that the surplus, if any, be paid to the defendants Ernest L. and Vera B. Wells as tenants by the entirety. From this decree G Klorfine, plaintiff, and defendant Ernest Cole appeal.

M. B. Meacham, of Portland, for appellant.

Ernest Cole, of Portland, in pro per.

BROWN, J. (after stating the facts as above).

In some jurisdictions in this country, estates by entirety have never been recognized, while in others such estates have been abolished by statute. An estate by the entirety is plainly a common-law estate, and is generally held to be based wholly on the common-law doctrine that the husband and wife are one; that a conveyance of real property to the husband and wife creates but one estate, each being the owner of the whole thereof; and that, upon the death of either, the survivor is the owner in fee simple. 13 R. C. L. pp. 1097, 1099; 30 C.J. pp. 564, 565; 15 Am. & Eng. Ency. of Law (2d Ed.) p. 847; 1 Bishop on the Law of Married Women, § 613. In this jurisdiction, a conveyance of real property to a husband and wife creates an estate by entirety. This doctrine has been uniformly upheld by our court throughout a long line of decisions. See Noblitt v. Beebe, 23 Or. 4, 35 P. 248; Howell v. Folsom, 38 Or. 184, 63 P. 116, 84 Am. St. Rep. 785; Hayes v. Horton, 46 Or. 597, 81 P. 386; Oliver v. Wright, 47 Or. 322, 83 P. 870; Chase v. McKenzie, 81 Or. 429, 159 P. 1025; Heacock v. Loder, 106 Or. 323, 211 P. 950; Stout v. Van Zante, 109 Or. 430, 219 P. 804, 220 P. 414; Twigger v. Twigger, 110 Or. 520, 223 P. 934; Dutton v. Buckley, 116 Or. 661, 242 P. 626; Dodd v. First Nat. Bank of Eugene, 117 Or. 691, 245 P. 504.

The trial court held that the interest of Ernest L. Wells was not subject to the lien of defendant Cole's judgment, upon the theory that an estate by the entirety was exempt from execution against either spouse. The authorities are not in harmony upon this question. The decision of the trial court finds some support both from text-writers and from courts. However, it is settled law in this state that the interest of a judgment debtor, as tenant by the entirety with his wife, may be sold on execution. This pronouncement of the law was made by Mr. Chief Justice Robert S. Bean, speaking for this court in the early case of Howell v. Folsom, supra. That case was a suit to foreclose a mortgage executed solely by a married woman who possessed an estate by entirety in the lands. Upon the hearing in the lower court, the mortgage was declared void because the husband had not joined in its execution. On appeal to this court the case was reversed, the court holding, in substance, that a married woman may convey or incumber her property in which she holds by entirety. In rendering its decision, the court said, at page 187 (63 P. 117):

"We take the rule, therefore, to be abundantly established that a husband can convey an estate held by himself and wife as tenants by the entirety, and that such conveyance will vest the fee in the purchaser, if the husband survive the wife. And, as our statute has given the wife power and authority to sell and convey her property 'to the same extent and in the same manner that her husband can property belonging to him' (Laws 1893, p. 170, amending section 2992, Hill's Ann. Laws), we think it clear she may convey an estate by the entirety with like effect as her husband."

In Heacock v. Loder, supra, Mr. Chief Justice McBride stated the view of this court in language following:

"It is objected that, as the cross-complaint alleges that John W. Loder and his wife, Grace E. Loder are the owners or reputed owners of the building, this shows that there is a tenancy therein by entirety, and that a lien cannot be enforced thereon against Loder, the husband. In this state it is settled by the elaborate opinion of Mr. Chief Justice Robert S. Bean in Howell v. Folsom, 38 Or. 184, 63 P. 116, 84 Am. St. Rep. 785, that a husband may encumber his interest held by himself and wife in entirety, and that a sale upon such encumbrance will convey to the purchaser the fee in such property in case the husband survives his wife."

The plaintiff contends that the court erred in holding that...