Sawada v. Endo, 5547

• Decision Date: 29 March 1977
• Docket Number: No. 5547,5547
• Citation: 57 Haw. 608,561 P.2d 1291
• Parties: Masako SAWADA and Helen Sawada, Plaintiffs-Appellants, v. Kokichi ENDO et al., Defendants-Appellees.
• Court: Hawaii Supreme Court

Page 1291

561 P.2d 1291

57 Haw. 608

Masako SAWADA and Helen Sawada, Plaintiffs-Appellants, v. Kokichi ENDO et al., Defendants-Appellees.

No. 5547.

Supreme Court of Hawai'i.

March 29, 1977.

Syllabus by the Court

Real Property-estates-tenancy by the entirety-husband and wife-creditors

The interest of a husband or a wife in an estate by the entirety is not subject to the claims of his or her individual creditors during the joint lives of the spouses.

Same-same

The tenancy in common, the joint tenancy, and the tenancy by the entirety are separate and distinct estates.

Same-tenancy by the entirety-husband and wife-unity of ownership

The tenancy by the entirety is predicated on the legal unity of husband and wife, and the estate is held by them in single ownership. They do not take by moieties, but both and each are seized of the whole estate.

Common Law-marital estate-effect of Married Women's Property Acts- husband and wife-ownership sct The effect of the Married Women's Property Acts was to abrogate the husband's common law dominance over the marital estate and to place the wife on a level of equality with him as regards the exercise of ownership over the whole estate.

Same-same-same-conveyance of land during coverture-joint conveyance

The Acts confirmed the wife's right to the use and enjoyment of the whole estate, and all the privileges that ownership of property confers, including the right to convey the property in its entirety, jointly with her husband, during the marriage relation.

Joint tenancy-tenancy by the entirety distinguished-indivisibility-joint action

A joint tenancy may be destroyed by voluntary alienation, ro by levy and execution, or by compulsory partition, but a tenancy by the entirety may not. The indivisibility of the estate, except by joint action of the spouses, is an indispensable feature of the tenancy by the entirety.

Tenancy by the entirety-liens-debts of husband-conversion

No lien may attach against property held in tenancy by the entirety for the separate debts of one spouse only, for that would be in derogation of the entirety of title in the spouses and would be tantamount to a conversion of the tenancy into a joint tenancy or tenancy in common.

Same-fraudulent claims

The creation of a tenancy by the entirety may not, however, be utilized as a device to defraud existing creditors.

Andrew S. Hartnett, Honolulu, for plaintiffs-appellants.

George M. Takane, Eichi Oki, Honolulu, for defendants-appellees.

Before RICHARDSON, C. J., and KOBAYASHI, OGATA, MENOR and KIDWELL, JJ.

MENOR, Justice.

This is a civil action brought by the plaintiffs-appellants, Masako Sawada and Helen Sawada, in aid of execution of money judgments in their favor, seeking to set aside a conveyance of real property from judgment debtor Kokichi Endo to Samuel H. Endo and Toru Endo, defendants-appellees herein, on the ground that the conveyance as to the Sawadas was fraudulent.

On November 30, 1968, the Sawadas were injured when struck by a motor vehicle operated by Kokichi Endo. On June 17, 1969, Helen Sawada filed her complaint for damages against Kokichi Endo. Masako Sawada Fied her suit against him on August 13, 1969. The complaint and summons in each case was served on Kokichi Endo on October 29, 1969.

On the date of the accident, Kokichi Endo was the owner, as a tenant by the entirety with his wife, Ume Endo, of a parcel of real property situate at Wahiawa, Oahu, Hawaii. By deed, dated July 26, 1969, Kokichi Endo and his wife conveyed the property to their sons, Samuel H. Endo and Toru Endo. This document was recorded in the Bureau of Conveyances on December 17, 1969. No consideration was paid by the grantees for the conveyance. Both were aware at the time of the conveyance that their father had been involved in an accident, and that he carried no liability insurance. Kokichi Endo and Ume Endo, while reserving no life interests therein, continued to reside on the premises.

On January 19, 1971, after a consolidated trial on the merits, judgment was entered in favor of Helen Sawada and against Kokichi Endo in the sum of $8,846.46. At the same time, Masako Sawada was awarded judgment on her complaint in the amount of $16,199.28. Ume Endo, wife of Kokichi Endo, on January 29, 1971. She was survived by her husband, Kokichi. Subsequently, after being frustrated in their attempts to obtain satisfaction of judgment from the personal property of Kokichi Endo, the Sawadas brought suit to set aside the conveyance which is the subject matter of this controversy. The trial court refused to set aside the conveyance, and the Sawadas appeal.

I

The determinative question in this case is, whether the interest of one spouse in real property, held in tenancy by the entireties, is subject to levy and execution by his or her individual creditors. This issue is one of first impression in this jurisdiction.

A brief review of the present state of the tenancy by the entirety might be helpful. Dean Phipps, writing in 1951, ¹ pointed out that only nineteen states and the District of Columbia continued to recognize it as a valid and subsisting institution in the field of property law. Phipps divided these jurisdictions into four groups. He made no mention of Alaska and Hawaii, both of which were then territories of the United States.

In the Group I states (Massachusetts, Michigan, and North Carolina) the estate is essentially the common law tenancy by the entireties, unaffected by the Married Women's Property Acts. As at common law, the possession and profits of the estate are subject to the husband's exclusive dominion and control. Pineo v. White, 320 Mass. 487, 70 N.E.2d 294 (1946); Speier v. Opfer, 73 Mich. 35, 40 N.W. 909 (1888); Johnson v. Leavitt, 188 N.C. 682, 125 S.E. 490 (1924). In all three states, as at common law, the husband may convey the entire estate subject only to the possibility that the wife may become entitled to the whole estate upon surviving him. Phelps v. Simons, 159 Mass. 415, 34 N.E. 657 (1893); Arrand v. Graham, 297 Mich. 559, 298 N.W. 281 (1911); Hood v. Mercer, 150 N.C. 699, 64 S.E. 897 (1909). As at common law, the obverse as to the wife does not hold true. Only in Massachusetts, however, is the estate in its entirety subject to levy by the husband's creditors. Splaine v. Morrissey, 282 Mass. 217, 184 N.E. 670 (1933). In both Michigan and North Carolina, the use and income from the estate is not subject to levy during the marriage for the separate debts of either spouse. Dickey v. Converse, 117 Mich. 449, 76 N.W. 80 (1898); Nood v. Mercer, supra.

In the Group II states (Alaska, Arkansas, New Jersey, New York, and Oregon) the interest of the debtor spouse in the estate may be sold or levide upon for his or her separate debts, subject to the other spouse's contingent right of survivorship. Pope v. McBride, 207 Ark. 940, 184 S.W.2d 259 (1945); King v. Greene, 30 N.J. 395, 153 A.2d 49 (1959); Hiles v. Fisher, 144 N.Y. 306, 39 N.E. 337 (1895); Brownley v. Lincoln County, 218 Or. 7, 343 P.2d 529 (1959). Alaska, which has been added to this group, has provided by statute that the interest of a debtor spouse in any type of estate, except a homestead as defined and held in tenancy by the entirety, shall be subject to his or her separate debts. Pilip v. United States, 186 F.Supp. 397 (D.Alaska, 1960).

In the Group III jurisdictions (Delaware, District of Columbia, Florida, Indiana, Maryland, Missouri, Pennsylvania, Rhode Island, Vermont, Virginia, and Wyoming) an attempted conveyance by either spouse is wholly void, and the estate may not be subjected to the separate debts of one spouse only. Citizens Savings Bank Inc. v. Astrin, 5 Terry 451, 44 Del. 451, 61 A.2d 419 (1948); Golden v. Glens Falls Indemnity Co., 102 U.S.App.D.C. 106, 250 F.2d 769 (1957); Hunt v. Covington, 145 Fla. 706, 200 So. 76 (1941); Sharp v. Baker, 51 Ind.App. 547, 96 N.E. 627 (1911); McCubbin v. Stanford, 85 Md. 378, 37 A. 214 (1897); Otto F. Stifel's Union Brewing Co. v. Saxy, 273 Mo. 159, 201 S.W. 67 (1918); O'Malley v. O'Malley, 272 Pa. 528, 116 A. 500 (1922); Bloomfield v. Brown, 67 R.I. 452, 25 A.2d 354 (1942); Citizens' Savings Bank & Trust Co. v. Jenkins, 91 Vt. 13, 99 A. 250 (1916); Vasilion v. Vasilion, 192 Va. 735, 66 S.E.2d 599 (1951); Ward Terry and Company v. Hensen, 75 Wyo. 444, 297 P.2d 213 (1956).

In Group IV, the two states of Kentucky and Tennessee hold that the contingent right of survivorship appertaining to either spouse is separately alienable by him and attachable by his creditiors during the marriage. Hoffmann v. Newell, 249 Ky. 270, 60 S.W.2d 607 (1933); Covington v. Murray, 220 Tenn. 265, 416 S.W.2d 761 (1967). The use and profits, however, may neither be alienated nor attached during coverture.

It appears, therefore, that Hawaii is the only jurisdiction still to be heard from on the question. Today we join that group of states and the District of Columbia which hold that under the Married Women's Property Acts the interest of a husband or a wife in an estate by the entireties is not subject to the claims of his or her individual creditors during the joint lives of the spouses. In so doing, we are placing our stamp of approval upon what is apparently the prevailing view of the lower courts of this jurisdiction.

Hawaii has long recognized and continues to recoginized the tenancy in common, the joint tenancy, and the tenancy by the entirety, as separate and distinct estates. See Paahana v. Bila, 3 Haw. 725 (1876). That the Married Women's Property Act of 1888 was not intended to abolish the tenancy by the entirety was made clear by the language of Act 19 of the Session Laws of Hawaii, 1903 (now HRS § 509-1). See also HRS § 509-2. The tenancy by the entirety is predicated upon the legal unity of husband and wife, and the estate is held by them in single ownership. They do not take by moieties, but both and each are seized of the whole estate. Lang v. Commissioner of Internal...