The Tenancy by the Entirety

by Gary Casaly, Esquire

To me tenancies are one of the most intreging aspects of real estate law. The proper use of words, the order in which they appear and the general use of the English Language can lead to different results in the creation of these tenancies. And the mysterious aspects of the tenancy by the entirety have never failed to amaze me.

Let's start our review of tenancies with one of my most favorite quotes. In King v. Greene, 30 N.J. 395, 153 A.2d 49 (1959) Chief Justice Weintraub wrote this:

It rests upon the fiction of oneness of husband and wife. Neither owns a separate distinct interest in the fee; rather each and both as an entity own the entire interest. Neither takes anything by survivorship; there is nothing to pass because the survivor always had the entirety. To me the conception is quite incomprehensible.

The Chief Justice's puzzlement, of course, related to the tenancy by the entirety. Truly, the concept is a mysterious one and the cases which have been decided in Massachusetts, both recently and in the not-so-distant-past, attest to this.

Take, for example, the case of Coraccio v. Lowell Five Cents Savings Bank, 415 Mass. 145, 612 N.E.2d 650 (1993). The Coraccio court decided what might have been intuitively apparent to the keen conveyancer, but it still deserves discussion here.

In Coraccio, Mr. and Mrs. Coraccio owned property as tenants by the entirety. (Their tenancy was created after the enactment of Chapter 727 of the Acts of 1979, which amended G.L.c. 209, §1, and provided for an equal footing between husbands and wives as to the tenancy. This point is important as will be seen by some of the more recent decisions regarding the tenancy by the entirety discussed below.) They both gave a first mortgage to Lowell Five Cents Savings Bank. Thereafter, the husband alone gave a second mortgage to the bank. (In fact, the husband alone gave two successive second mortgages to the bank, but the first one was discharged.) Mrs. Coraccio had no knowledge of the second mortgage until she read a newspaper ad concerning its foreclosure. She brought an action against the bank asking for a judgment declaring, among other things, that the mortgage was void due to the fact that, as one of the tenants by the entirety, she had neither signed the mortgage nor consented to it.

In Coraccio Chief Justice Liacos, in writing the opinion for the court, explored the qualities of the very special tenancy in the light of the Massachusetts statute which had amended the historical concept.

The concept of a tenancy by the entirety is one of ancient common law origin; it has been described as a form of concurrent ownership that may exist only between coowners who are husband and wife. In Raptes v. Pappas, 259 Mass. 37, 38, 155 N.E. 787 (1927), we stated:

"At common law in such a tenancy the husband and wife are seized of the estate so granted as one person, and not as ordinary joint tenants or tenants in common, and an incident of such as estate is that the survivor of the marriage is entitled to the whole, a right which one cannot destroy without the assent of the other. * * * Neither could convey during their joint lives so as to bind the other, or defeat the right of the survivor to the whole estate, … but, subject to this limitation, the husband has the rights in it which are incident to his own property …. * * * Statutes relating to the separate rights of married women have not changed the common law rights of the husband in such estates.

Clearly, as the court pointed out, although neither husband nor wife could defeat the right of the other in the tenancy, the husband at common law could alienate the interest in the property, namely his own. Licker v. Gulskin, 265 Mass. 403, 164 N.E. 613 (1929). The wife's interest, however, was a mere expectancy, and was so infinitesimal that neither she nor her creditors at common law could convey or attach the same. The question posed in Coraccio was how, if at all, the amendment to G.L.c. 209, §1 affected this result.

On this point the court said:

G.L.c. 209, §1 … provides in relevant part [that] "A husband and wife shall be equally entitled to the rents, products, income and profits and to the control, management, and possession of property held by them as tenants by the entirety." Additionally, [the statute provides that] "The interest of a debtor spouse in property held as tenants by the entirety shall not be subject to seizure or execution by a creditor of such debtor spouse so long as such property is the principal residence of the nondebtor spouse …." * * * The legislation granted women an equal right to enjoy the incidents of a tenancy by the entirety. * * * The statute did not, however, alter the characteristics of the estate itself. * * * [I]t does not follow that each has an equal one half interest in the property. * * * [T]he entirety remains a unitary title. * * * Whatever the husband could do at common law, the wife now may do as well. * * * One spouse, acting alone, cannot convey or encumber the entire estate, because any conveyance or encumbrance remains subject to the other's survivorship right. * * * Nonetheless, either spouse may convey or encumber his or her interest in the property held as tenants by the entirety.

The court concluded that the mortgage granted by Mr. Coraccio was valid, at least at to what it encumbered:

We declare that G.L.c. 209, §1 does not require the consent of both spouses before a mortgage may encumber the property, and that the bank, if it foreclosed, could acquire [Mr.] Coraccio's interest in the property, namely a right wholly defeasible should the plaintiff, the nondebtor spouse, survive him. (Emphasis added.)

The bank, under the rule announced by the court, had a valid lien and could enforce it, at least to the point of succeeding to Mr. Coraccio's interest. However, it could not acquire possession thereof, so long as the nondebtor has her principal residence at the property. Moreover, the bank is indefinitely in a state of suspended animation, until either of the spouses dies: if the wife dies first, the bank gets full title; if the husband dies first, the bank loses all its rights in the property. (If, after this episode, the Coraccios divorced each other, the bank would appear to then be a tenant in common with Mrs. Coraccio, Bernatavicius v. Bernatavicius, 259 Mass. 486, 156 N.E. 685 (1927), and could succeed to an equal right of possession, based on its then established right to title.)

It is to be noted that in Coraccio the tenancy by the entirety was created after the enactment of Chapter 727 of the Acts of 1979, which amended G.L.c. 209, §1 and became effective on February 11, 1980. To appreciate the significance of this fact a comparison of Coraccio and the relatively new case of Shwachman v. Meagher, 45 Mass.App.Ct. 428, 699 N.E.2d 16 (1998) should be made. In Shwachman Richard and Jane Meagher held their title as tenants by the entirety, which tenancy had been created before the aforementioned date. Philip Shwachman had obtained a judgment against Richard alone. He thereafter obtained an execution and, through a sheriff's sale, acquired Richard's interest in the property. In an effort to dispose of any objection to his title based on Jane's continuing expectancy in the property, Shwachman secured a deed from Jane for her interest in the property. In an action in the superior court that revolved around the question of where Jane's deed effectively conveyed anything to Shwachman the court ruled that the deed was void and that Jane continued to have an expectancy in the property. On appeal the Appeals Court affirmed the decision, nearly writing a treatise on the issue before it:

The instant case is entirely governed by the common law as reflected in such cases as Lowell v. Daniels, 68 Mass. 171, 2 Gray 161, 168-169 (1854) (wife's sole deed purporting to convey her interest in real estate is "absolutely void" without her husband's joint signature, even though the husband subsequently gave his own deed to the same party: "the law has rendered her incapable of such a contract …. Her most solemn acts, done in good faith, and for full consideration, cannot affect her interest in the estate …. She cannot by her own act enlarge her legal capacity to convey an estate."); Pierce v. Chace, 108 Mass. 254, 258-259 (1871) (even when wife signed husband's deed assenting to his transfer of his interest in the tenancy by the entirety, her act was not legally binding on her nor was she equitably estopped to claim the estate upon her husband's death: "Her agreements … were made under a mistake as to her right of property, without fraud or intention to deceive …. [It was] a void conveyance of her real estate. She is not thus to be deprived of that protection which the law affords."); Phelps v. Simons, 159 Mass. 415, 417-418, 34 N.E. 657 (1893) (under the common law, the husband could sell or transfer all of his interest in an estate by the entirety, but the utmost that the transferee could receive was the right to possession and income during the husband's life with the possibility of the absolute title should the husband survive the wife; and if the wife should survive, she would be entitled to the property absolutely); Raptes v. Pappas, 259 Mass. 37, 38-39, 155 NE 787 (1927) (creditor who obtained all of the debtor husband's interest in a tenancy by the entirety was entitled to immediate possession and enjoyment of the property, but nothing done by the husband alone could defeat the right of the wife to the whole estate should she survive the husband); Bernatavicius v. Bernatavicius, 259 Mass. at 487, 156 N.E. 685 ("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 a separate act"); Licker v. Gluskin, 265 Mass. 403, 406-407, 164 N.E. 613 (1929) (which the Superior Court judge rightly relied upon) ("[T]he interest of the wife [in tenancy by the entirety] … may [not] be conveyed by her [or] attached by her creditors … During coverture [the wife can] make no valid conveyance of any interest … [in the tenancy by the entirety] without the assent in writing of the husband. Her sole deed [is] void …. [T]he interest of the wife as tenant by the entirety is not during coverture subject to the attachment, levy [or] sale."); Krokyn v. Krokyn, 378 Mass. 206, 211, 390 N.E.2d 733 (1979) ("[T]he wife's mere expectancy of title is neither alienable nor subject to execution …."); West v. First Agric. Bank, 382 Mass. 534, 543, 545-546 & nn. 16, 20, 419 N.E.2d 262 (1981) (reaffirming Licker v. Gluskin and noting that, for all the modern criticisms directed at it, certain practical benefits inherent in a tenancy by the entirety, which still "made sense in common situations"); Carey's Inc. v. Carey, 25 Mass.App.Ct. 290, 295, 517 N.E.2d 850 (1988) ("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.").

In Shwachman, as has been noted, the tenancy by the entirety under consideration was created before the enactment of Chapter 727 of the Acts of 1979, amending G.L.c. 209, §1 (see below), and the court, in a footnote, said:

Substantial reforms that would conceptually support Shwachman's position, were the locus subject to a post-February, 1980, tenancy by the entirety, were made by St.1979, c. 727, effective for tenancies created after February, 11, 1980, but not for earlier tenancies by the entirety such as that of the Meaghers. See Turner v. Greenaway, 391 Mass. 1002, 1003, 459 N.E.2d 821 (1984). Under those reforms, either spouse can convey or encumber his or her interest in property held as tenants by the entirety without the other's consent. See Coraccio v. Lowell Five Cents Sav. Bank, 415 Mass. 145, 150-152, 612 N.E.2d 650 (1993). A subsequent statute, St.1989, c. 283, codified as G.L.c. 209, Sec. 1A, gave tenants by the entirety under deeds executed prior to February 11, 1980, the right to elect to convert their tenancy to one subject to the provisions of St.1979, c. 727, through specified procedures, but the Meaghers never did so.

The Coraccio court cites the then recent case of Peebles v. Minnis, 402 Mass. 282, 521 N.E.2d 1372 (1988) for authority regarding its decision concerning the tenancy by the entirety. Peebles, however, concerned an attachment. In Peebles a husband and wife owned property as tenants by the entirety and a creditor made an attachment against the wife of the marital home in an action for tort. (As in Coraccio, the tenancy by the entirety had been created after the amendment to G.L.c. 209, §1. Before the amendment, the wife's interest would have been so infinitesimal as to prevent such an attachment from being made. Moreover, the amendment does not apply retroactively. See West v. First Agricultural Bank, 382 Mass. 534, 419 N.E.2d 262 (1981). However, a couple can take advantage of the amendment by recording an election to that effect under G.L.c. 209, §1A, and it appears that the election once made will hold creditors at bay, even if their liens were recorded before the election. See Somerset Savings Bank v. Goldberg, Bankruptcy Civil Action No. 93-10109.) The husband in Peebles made a motion to have the attachment declared invalid on account of the fact that he, the non-debtor spouse, resided in the property. The court concluded that although the creditor could not sell the property by sheriff's sale or gain possession of it while the nondebtor spouse resided there it could make an attachment against the property. Interestingly enough, the court did not even mention G.L.c. 223, §42, which provides that

all real and personal property liable to be taken on execution . . . may be attached upon a writ of attachment …

The foregoing statute would seem to prevent even an attachment from being made against the property in the case of a tenancy by the entirety since, under G.L.c. 209, §1 such property "[is] not subject to . . . execution." It would appear, therefore, that it would not be subject to being attached.

The attributes of a tenancy by the entirety have been the subject of numerous judicial decisions, some of which ought not to go unnoticed in this commentary. For example, the aspect of the tenancy which relates to the "bubble theory," so-called, discussed in and left intact under Coraccio, was explored in Palmer v. Mansfield, 222 Mass. 263, 110 N.E. 283 (1915), where the court held that this theory prevented the assessment of death taxes upon the death of one of the spouses because, under this hypothesis, no transfer had occurred which could be taxed. The court stated:

When a tenancy by the entirety is created, the husband and wife take the estate as one person, and they take but one estate. In view of the nature of such an estate, on the death of either husband or wife no beneficial interest accrues to the other by survivorship so as to create succession, and so no part of the estate was subject to the [inheritance] tax.

Upon the death of the testator no estate in the property in question passed to his widow. It belonged to her from the time when the tenancy by the entirety was created.

Obviously, the then inheritance tax statute was amended soon after the decision in Palmer to assure that the government would get its due.

Another interesting aspect of the tenancy by the entirety is that it can be held only as between husband and wife. What result would be obtained if, say, the named grantees were not —or did not know that they were not—legally married. Although, the present statute, G.L.c. 184, §7, addresses this matter as to conveyances after 1979, it is important to understand the result of such a conveyance to unmarried persons before that effective date. Of course, the statute was amended and now provides that "[a] conveyance or devise of land to two or more persons as tenants by the entirety, who are not married to each other, shall create an estate in joint tenancy and not a tenancy in common," but this was not always the way it existed.

The statutory change was in response to the case of Fuss v. Fuss, 373 Mass. 445, 368 N.E.2d 276 (1977), which should be clearly distinguished from Morris v. McCarty, 158 Mass. 11, 32 NE 938 (1893). In Fuss Reverend Pitcairn made a conveyance to his daughter and her putative husband, James, as "husband and wife as tenants by the entirety." Although it appeared that none of the parties suspected it, Marcia's prior Mexican divorce was questionable and in fact illegal. This resulted in Marcia and James not being married to each other. Because they were not married they could not hold as tenants by the entirety. Moreover, G.L.c. 184, §7, which governs in the situation, provides that "[a] conveyance or devise to two or more persons . . . shall create an estate in common and not in joint tenancy, unless . . . it manifestly appears from the tenor of the instrument that it was intended to create an estate in joint tenancy." This combination of statutory framework resulted in James and Marcia holding title as tenants in common. It is obvious that the parties didn't know that their marriage was illegal and it is apparent that they wished to hold their title in a fashion whereby the survivor would take the whole title. However, the court was constrained by the language of the statute, notwithstanding the obvious intention.

The Fuss case should be distinguished from Morris, wherein the court was able to fashion a decision consistent with both the statute and the intention of the parties. Because the cases come to different conclusions a quick reading of the latter case might suggest an inconsistency with Fuss, but such is not the case. In Morris, a conveyance was made to "John McCarty and Mary McCarty, as tenants by the entirety and not as tenants in common." In very clear reasoning, in fact consistent with the Fuss decision to be made many years thereafter, the court said:

The deed could not have the effect to create an estate in entirety, because the grantees were not in fact husband and wife, though described as such by the grantors.

But the court seized on the intention of the parties and, having eliminated the possibility of a tenancy by the entirety proceeded to exclude the possibility of a tenancy in common, leaving, therefore, a joint tenancy, with its incident of the survivorship feature, the obvious intended result of the parties:

An estate in entirety is an estate in joint tenancy, but with the limitation that during their joint lives neither the husband nor the wife can destroy the right of survivorship without the assent of the other party. The doctrine of survivorship is the distinguishing incident of title by joint tenancy. On looking at the deed under which the tenant claimed, it is quite plain that the grantors intended to create an estate in joint tenancy, as distinguished from an estate in common. The particular form of the estate in joint tenancy which they contemplated fails; but they took great pains to exclude the idea of an estate in common, and the effect of the deed is to create an estate in joint tenancy, without the special features of an estate in entirety.

The "great pains" which the grantors took to exclude the idea of an estate in common was to add the phrase "not as tenants in common," which was not the case in Fuss.

There are some considerations regarding the tenancy by the entirety which should be kept in mind when either dealing with a current conveyance or examining a back title. In Bernatavicius v. Bernatavicius, 259 Mass. 486, 156 N.E. 685 (1927) it was decided that a divorce would end a tenancy by the entirety and would vest the parties with title as tenants in common. The decision is familiar to all conveyancers. The court, however, also raised but failed to decide the question of whether a husband who held title with his wife as a tenant by the entirety could convey that title directly to the wife. Although the court intimated that such a conveyance might be permissible, it concluded that it was not necessary to decide the issue in order to resolve the pending litigation. However, the question was once again raised in Hale v. Hale, 332 Mass 329, 125 N.E.2d 142 (1955). The court said:

It is familiar law that at common law neither [the husband nor the wife] could convey land directly to the other. But the common law has been modified by statute. It [is] provided in . . . G.L.(Ter.Ed.) c. 209, '3, in substance that the conveyances of real estate other than mortgages, between husband and wife, shall be valid to the same extent as if they were sole. [It was decided in Erickson v. White, 288 Mass. 451, 193 N.E. 25 (1934)] that this section is complete in itself covering a new subject and conferring rights and privileges not theretofore existing. * * * And on principle there would appear to be no sound reason to construe the statute as precluding a spouse from conveying his or her interest in [a tenancy by the entirety] to the other.

An ancillary question to the one concerning conveyances between spouses in the case of a tenancy by the entirety is that involving the issue of the creation of a tenancy by the entirety when, initially, either the husband or the wife holds the title individually. Although, as noted above, conveyances between husband and wife are permissible, the creation of a tenancy by the entirety between them rests upon the application of legal principles, including that involving unities of title. Under G.L.c. 184, §8 it is provided that "[r]eal estate … may be transferred by a person to … himself and his spouse as tenants by the entirety [and] shall create a tenancy by the entirety." Before the enactment in 1954 of that portion of the statute dealing with the above matter the law was different. In Ames v. Chandler, 265 Mass. 428, 164 N.E. 616 (1929) the Supreme Judicial Court held that a husband could not, by way of his deed to himself and his spouse, create a tenancy by the entirety with her. A few years later in Edge v. Barrow, 316 Mass. 104, 55 N.E.2d 5 (1944) the court nearly reconsidered the issue, but ultimately declined to do so, feeling that under the facts of that case reconsideration was unnecessary.

Other tenancies are not entirely free of complications and their own set of troubles. For example, In Bertolami v. Corsi, 27 Mass.App.Ct. 1132, 537 N.E.2d 1271 (1989) the Appeals Court had yet another opportunity to interpret G.L.c. 184, Section 7 with respect to its effect upon the tenancy by which mortgages are held. The statute above referred to provides, in part, as follows:

A conveyance or devise of land to two or more persons or to husband and wife, except a mortgage …, shall create an estate in common and not joint tenancy, … unless it manifestly appears from the tenor of the instrument that it was intended to create an estate in joint tenancy.

In Bertolami Mary, Richard and Mario were joint tenants of a certain parcel of property. They conveyed the property to a purchaser who, in turn, executed a promissory note, secured by a mortgage back to them for a portion of the purchase price. Neither the note nor the mortgage indicated whether the three held the mortgage as tenants in common or as joint tenants. After Mario died, the administrator of his estate, assuming that the mortgage was held as tenants in common, included one-third of the note and of the mortgage as an asset of the decedent's estate. Mary, claiming the note and mortgage was held by all three as joint tenants, and insisting that payments under the note should now be made to the surviving joint owners only, brought an action in the probate court to obtain a decree to that effect.

The Appellate Court ultimately entered a judgment that the mortgage was indeed held by the parties as joint tenants and that payments thereunder should be made to Richard and Mary only, and that Mario's estate should not share therein. The ultimate decision is not surprising, based upon the aforementioned statute, which would seem to suggest that mortgages, unlike deeds and other conveyances, are held jointly under common law, mortgages having survived the enactment of the statute, which was in derogation of the common law. Although the court came to this conclusion, it was not based upon the statute so much as it was founded upon the theory that even though mortgages are not presumed to be held in common, neither are they presumed to be held jointly. In other words, the court concluded that mortgages and the tenancy by which they are held is subject to interpretations which may be based upon facts other than recitations in the instrument itself or upon presumptions of common law.

In Bertolami the court quoted extensively the case of Park v. Parker 216, Mass. 405, 103 N.E 936 (1914), noting that in that case three individuals who held title as tenants in common conveyed the property in exchange for a promissory note and a mortgage which, as in the present case, failed to recite the tenancy by which the mortgagees were to hold title. The court noted that in Park all three mortgagees subsequently died and the court was required to determine whether payments under the mortgage should be paid to the estate of the last mortgagee to die or to the estates of all three mortgagees. The court noted that the court in Park held as follows:

Joint tenancy and its doctrine of survivorship are not in harmony with the genius of our institutions, nor are they much favored in law. In the case at bar the original payees of the note and grantees in the mortgage had been tenants in common of the real estate and their shares were equal. The presumption is strong that they expected the note to stand in the place of the land they had sold, with like proportional interests in each. It is unlikely that as between themselves they intended that a relation so different and so speculatively uncertain in its nature as joint tenancy should be substituted for the plain and definite equal ownership of tenants in common …. when the note, to which the mortgage was security, has been paid in full, and in a sense stands in place of the land of which the payees were tenants in common, there is no rigid rule of law which requires the principal of joint tenancy to apply to the money. (Emphasis added).

The Bertolami court noted that both sides had relied heavily on the Park case. The court noted, however, that the administrator of Mario's estate had relied particularly heavily on the emphasized language, causing the administrator to conclude that the note and mortgage in the present case must, too, be held in common. However, the court emphasized that Park did not stand so much for the proposition that mortgages were to be considered as held in common, as it stood for the proposition that a purchase money mortgage ought to be considered to be held in the same tenancy by which the mortgagees had previously held the property which they had conveyed.

The interesting aspect of the case is, of course, that it is not necessarily true that a mortgage (unlike a deed) must in all instances be considered as being held jointly by the mortgagees, although that was the ultimate result in Bertolami.

The case also raises some questions as to how G.L.c. 183, section 54, having to do with discharges of mortgages, may hereafter be interpreted by our court. That statute provides that one of two or more "joint holders" of a mortgage may discharge it. If Bertolami and Park result in some instances in multiple mortgagees holding in common, can the aforementioned statute be solely relied upon?

No commentary or tenancies would be complete without pointing out some of the pitfalls that have either been created by the courts, corrected by the legislature or left in G.L.c. 184, §7 to trip the conveyancer up. Let's start with one of the most common misconceptions. Some conveyancers are under the impression that a deed to two named persons "as husband and wife" creates a tenancy by the entirety. Such a conveyance in fact creates a tenancy in common. What about a deed to John and Mary "husband and wife, as tenants by the entirety"? Now it looks like we've really got a tenancy by the entirety. That's true if the parties are in fact married to each other, but if one is a bigamist, as in the case of Fuss v. Fuss, things rapidly change. If the conveyance was before 1979 we end up with a tenancy in common, but after that date a joint tenancy is created.

What about a deed to "John and Mary and Susan as joint tenants"? After 1973 that language would create a joint tenancy between all the named grantees. However, before then only Mary and Susan would hold as joint tenants between themselves and John would tag along as a tenant in common. Fulton v. Katsowney, 342 Mass. 503, 174 N.E.2d 366 (1961). This is an example where reading the statute may mislead you unless you are also aware of the history of the legislation. In this regard, although the statute states that "words creating as a joint tenancy shall be construed as applying to all the grantees" this provision is not retroactive and does not apply to pre-1973 deeds.

Here's another test that might appear on the final exam in Tenancies 101. What about a provision in a will that leaves property "to my son Thomas and my son William, share and share alike, or to the survivor of them"? What have we got now? A joint tenancy between Thomas and William or a class gift to both of them? That is, does it make a difference as to when either Thomas or William should die—before or after the testator? Our court in Cross v. Cross, 324 Mass. 186, 85 N.E.2d 325 (1949) stated that if Thomas and William survived their father they would take as a tenants in common, and that the language about survivorship had to do with the creation of a class of which the brothers were members.

From the nearly bizarre results that sometimes are encountered when it comes to determining how grantees hold their title, I think that in selecting the title for this article—"Troublesome Tenancies"—I didn't make an exaggeration!