Sisco v. New Jersey Bank
| Decision Date | 08 July 1977 |
| Citation | 151 N.J.Super. 363,376 A.2d 1287 |
| Parties | Susan M. SISCO, Plaintiff, v. NEW JERSEY BANK, Defendant. |
| Court | New Jersey Superior Court |
Edward V. Torack, Franklin Lake, for plaintiff (Hook & Torack, Franklin Lake, attorneys).
Allan A. Maki, Paterson, for defendant.
VAN TASSEL, J. C. C., Temporarily Assigned.
This matter is before the court pursuant to an order to show cause brought by plaintiff Susan M. Sisco, demanding that her interest in a certain property be discharged from a levy and lien of execution held by defendant New Jersey Bank.
On March 9, 1977 this court signed a final judgment of divorce between plaintiff and Stuart E. Sisco. This judgment contained several provisions relating to equitable distribution and payment of debts which accrued during the marriage. Paragraph (h) of the judgment is salient to the present action, and it reads as follows:
The matrimonial home owned by the parties as tenants by the entirety known as 531 Summit Avenue, Franklin Lakes, New Jersey, shall be placed on the market and shall be sold at the highest price obtainable and the net proceeds, after paying off the balance due upon the first mortgage and any broker's commission, and necessary closing adjustments, shall be divided as follows:
60% thereof shall be paid to plaintiff
40% thereof shall be paid to defendant
These shares are declared to be liens upon the said marital home and proceeds of sale. Out of the defendant's share of the net distribution from the sale of the home, the following debts, which are declared to be liens shall be paid:
On March 18, 1977 this judgment was filed pursuant to N.J.S.A. 2A:16-18.
On March 21, 1977 New Jersey Bank obtained a judgment against Stuart Sisco for a total of $17,905.20 and costs of suit, which represented the unpaid balance of a business loan Sisco had received from this bank. On March 25, the bank issued a writ of execution on its judgment, and on April 20 the bank levied on the property through the Sheriff of Bergen County.
The property directed to be sold by the judgment of divorce is currently under a contract of sale in which the purchase price is $77,000. After payment of the mortgage, Sisco's 40% share of the proceeds would be approximately $16,500. Plaintiff seeks to apply at least $12,750 of these monies to satisfy the liens, made for her benefit, with the balance of approximately $3,750 payable to New Jersey Bank. The $2,000 ordered to be paid to the Bank of Passaic & Clifton was a loan payable by Sisco alone, and since payment of it is not for the benefit of Mrs. Sisco, the court will not deal with that loan in this opinion.
Defendant New Jersey Bank contends that due to their execution of their judgment and subsequent levy on the property, it now has priority for the full amount of their judgment. The bank also contends that its levy and claim reaches Mrs. Sisco's 50% interest as a tenant in common in the real estate 1, should Sisco's 50% interest be inadequate to liquidate the entire $18,038.20 judgment, including costs.
In New Jersey the conveyance of real property to a husband and wife vests them with an estate by the entirety, unless express language shows an intent to convey a different estate. Mosser v. Dolsay, 132 N.J.Eq. 121, 27 A.2d 155 (Ch. 1942). An absolute divorce terminates the marital relationship and converts an estate by the entirety into a tenancy in common. Sbarbaro v. Sbarbaro, 88 N.J.Eq 101, 102 A. 256 (Ch. 1917), Mueller v. Mueller, 95 N.J.Super 244, 230 A.2d 534 (App.Div. 1967).
In an estate by the entirety the husband and wife are considered as one person, with each spouse holding the entirety per tout et per my. Such an estate is not divisible and is not subject to partition. Mueller v. Mueller, supra. In a tenancy in common the tenants also hold an undivided interest in the same land, but the size of the shares of these tenants may be different. Shroser v. Isaacs, 28 N.J.Eq. 320 (Ch. 1877).
At the time of the judgment of divorce the Siscos ceased to hold their property as tenants by the entirety and became tenants in common. The judgment in paragraph (h), supra, provides that Mrs. Sisco's share in the premises is 60% and Mr. Sisco's share is 40%.
New Jersey Bank obtained a judgment against Stuart Sisco only, and it can execute against the interest of Stuart Sisco in the property held by the Siscos. It is fundamental that a levying creditor or purchaser at an execution sale acquires no greater rights in the property than those of the debtor spouse. Dvorken v. Barrett, 100 N.J.Super. 306, 241 A.2d 841 (App.Div. 1968). Stuart Sisco, therefore, pursuant to the judgment of divorce, holds a 40% interest in the subject property as a tenant in common, and New Jersey Bank's claim of priority over Mrs. Sisco is only applicable to the 40% interest presently held by Mr. Sisco.
N.J.S.A. 2A:17-39 provides for the priority of judgments pursuant to an execution and sale as follows:
Whereas, other judgments, and recognizances, besides those, or some of those, by virtue whereof the sale aforesaid was made, might affect the real estate so sold, if no provision be made to remedy the same, and whereas, the persons who have not taken, or will not take out executions upon their judgments, or recognizances, ought not to hinder or prevent such as do take out executions from having the proper effect and fruits thereof, therefore, in any such case, the purchaser, his heirs and assigns, shall hold the lands, tenements, hereditaments, and real estate by him or her purchased as aforesaid, free and clear of all other judgments and recognizances, whatsoever, on or by virtue of which no execution has been taken out and executed on the real estate so purchased.
Under this section the issuance of the execution and levy by a judgment creditor results in priority for that judgment creditor over all other judgment creditors. Vineland S. & L. Ass'n v. Felmey, 12 N.J.Super. 384, 79 A.2d 714 (1951). However, all other prior encumbrances, except judgments and recognizances upon which no execution has issued, remain liens on the land and the execution sale must be made subject to them. N.J.S.A. 2A:17-41; Potts v. New Jersey Arms & Ordnance Co., 17 N.J.Eq. 516 (E. & A. 1865...
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