Holroyd, Frank J., Jr.

English

University of North Carolina School of Law

NORTH CAROLINA LAW REVIEWVolume 34 | Number 4 Article 216-1-1956Real Property -- Conveyances between Spouses --Creation and Dissolution of Estates by the EntiretyFrank J. Holroyd Jr.Follow this and additional works at: http://scholarship.law.unc.edu/nclrPart of the Law CommonsThis Note is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina LawReview by an authorized editor of Carolina Law Scholarship Repository. For more information, please contact law_repository@unc.edu.Recommended CitationFrank J. Holroyd Jr., Real Property -- Conveyances between Spouses -- Creation and Dissolution of Estates by the Entirety, 34 N.C. L. Rev.571 (1956).Available at: http://scholarship.law.unc.edu/nclr/vol34/iss4/21NOTES AND COMMENTSas a criterion for determining the extent of the interest transferred whencommunity property passes from a-husband to his wife by gift or uponhis death.It is evident from the rights of the wife detailed above that whena husband transfers community property to his wife, she then for thefirst time receives certain important property rights in her one-half in-terest. Whether the transfer of those rights is so insignificant as not towarrant taxation of course depends largely upon individual state taxingpolicy.41 However, before the tax consequences are resolved, the extentof the interest transferred should be determined and brought into aproper perspective with the taxing policy. It is submitted that commonlaw states, when confronted with the problem of taxing transfers of com-munity property from a husband to his wife, can more realistically ac-complish this determination by analyzing the actual substantive rightspossessed by the wife before and after the transfer-and not by relyingupon the sometimes vague and meaningless label of "vested."J. THOMAS MANN.Real Property-Conveyances between Spouses-Creation and Dissolu-tion of Estates by the EntiretyIn North Carolina, a married woman can make a valid conveyanceto her husband of her real property' only if the instrument of conveyancecontains a certificate by the certifying officer of his findings of facts andconclusions as to whether the deed is unreasonable or injurious to her.2The certificate is based on a private examination of the wife.3" New York, for example, has a specific estate tax statute (similar to the federalstatute in effect from 1942 to 1948) in regard to community property. It statesthat the gross estate of a decedent shall include property "held as communityproperty by the decedent and surviving spouse under the law of any state . . . orany foreign country, except such part thereof as may be shown to have been re-ceived as compensation for personal services rendered by the surviving spouse orderived originally from such compensation or from the separate property of thesurviving spouse. In no case shall such interest included . . . be less than thevalue of the community property as was subject to the decendent's power of testa-mentary disposition." N. Y. TAx LAW § 249-r (5-a). Where all the communityproperty passes to the wife upon the husband's death, it has been held, under thisstatute, that the entire amount of property was includible in the husband's grossestate. In re Walk's Estate, 192 N. Y. Misc. 237, 79 N. Y. S. 2d 645 (Surr. Ct.1948).' N. C. CoNsT. art. X, § 6. "The real and personal property of any female inthis State . . . may be devised and bequeathed, and, with the written consent ofher husband, conveyed by her as if she were unmarried." See also Perry v. Stancil,237 N. C. 442, 75 S. E. 2d 512 (1953) (The wife conveyed her separate estate toher husband without his written consent. The court held that art. X, § 6 of theConstitution did not apply to the conveyance to the husband. The provision appliesonly to conveyances to third parties.)N. C. GEN. STAT. § 52-12(b) (1955).N. C. GEN. STAT. § 52-12 (a) (1955).1956]NORTH CAROLINA LAW REVIEWIn a recent case, 4 a wife owned two tracts of land in fee. By deed,she and her husband conveyed the property to a third party. No certifi-cate by the certifying officer that the instrument was not unreasonableor injurious to her was annexed to the deed. Later the same day, bothtracts were conveyed by the third party to the wife and husband in formsufficient to create a tenancy by the entirety. It was held that the deedfrom the wife to the the third party was void for failure to comply withthe provisions of G. S. 52-12.5 The court said that the wife could notdo indirectly, by such non-compliance, what she could not do directly;therefore, the attempt to create the tenancy by the entirety in the wife'sproperty was unsuccessful.The requirements in North Carolina for the creation of tenancies bythe entirety by conveyance between the spouses are not clear. At com-mon law, when a married man wanted to create a tenancy by the en-tirety in himself and his wife with his solely owned property, it wasnecessary for him to convey to an intermediate third party who imme-diately conveyed the property to the husband and wife as tenants by theentirety.0 This transaction was required to make present the five unitiesof time, title, interest, possession and person necessary to create thetenancy.7 The anachronism of conveying through a straw man to createa tenancy by the entirety in property owned by one of the spouses hasnot been repudiated in North Carolina.The jurisdictions that recognize tenancy by the entirety8 are in sharpdisagreement as to the validity of such a tenancy created by a direct con-veyance from one spouse to both. One line of authority follows thecommon law precedent. In these jurisdictions a direct conveyance isinvalid because the common law unities of time and title necessary to'Davis v. Vaughn, 243 N. C. 486, 91 S. E. 2d 165 (1956). Cf. McCullen v.Durham, 229 N. C. 418, 50 S. E. 2d 511 (1948) (Wife's property was conveyedby the wife, with her husband's joinder, to a third person. Seven months later theproperty was conveyed by the third person to the husband. The deed from thewife contained no certificate that it was not unreasonable or injurious to her. Thecourt held that the transaction was not void because it clearly appeared that thefirst deed was not made "with any view to accomplishing an indirect conveyanceof the [wife's] property to her husband.")'At the time the deed in question was executed, the statute did not provide fora private examination of the wife. N. C. Sess. Laws 1945, c. 73, § 19, as amendedby N. C. Sess. Laws 1947, c. 111 and N. C. Sess. Laws 1951, c. 1006, § 2.'4 PowELL ON REAL PROParTY 659 (1954).7 Id. at 653.' Tenancy by the entirety has importance in only twenty-one states. It hasbeen eliminated or is absent in the remainder of the states. Id. at 655.'Edge v. Barrow, 316 Mass. 104, 55 N. E. 2d 5 (1944) ; Ames v. Chandler, 265Mass. 428, 164 N. E. 616 (1929) ; Pegg v. Pegg, 165 Mich. 228, 130 N. W. 617(1911) ; Stone v. Culver, 286 Mich. 263, 282 N. W. 142 (1938) (Tenancy by theentirety was not created, but because the wife used her old name as grantor andher new name as grantee, the court held that her heirs were estopped to assert thatthe tenancy had not been created.) ; Richardson v. Richardson, 111 Vt. 140, 11 A.2d 227 (1940).[Vol. 34NOTES AND COMMENTScreate the tenancy by the entirety are lacking.' 0 Thus, it is held that thevery nature of the tenancy makes it necessary to convey through anintermediary.A growing minority, 1 led by New York,12 has taken a different andmore liberal approach to the problem. The theory that a direct con-veyance is invalid because the unities of time and title are lacking hasbeen displaced by the theory that the spouse is not conveying the prop-erty to himself, as such, and to his wife, but to a legal entity composedof the husband and wife.' 3 Therefore, the conveyance to the intermediatestraw man is not necessary.The North Carolina Supreme Court has not directly faced this prob-lem. However, there is a basis for the adoption of the New York rule,at least if the property was originally owned by the husband. Our courthas long held that a tenancy by the entirety is vested in one person-the"husband and wife."'" Since the objection to a direct conveyance isthat the husband, in a sense, is conveying the property to himself, theseparate entity concept of "husband and wife" would render nugatorysuch an objection. The husband would not be conveying the propertyto himself, but to a recognized separate entity-"husband and wife."The same reasoning should apply if the property is originally ownedby the wife. The New York rule that a tenancy by the entirety maybe created by a direct conveyance by the husband or wife to themselvesof property owned by one of them is logical and reasonable. The refusalby a court to give credence to such a transaction "would be a judicialconveyance of the property contrary to the owner's expressed inten-tion."' 5 The direct conveyance would require the execution and recorda-tion of a single deed, while a conveyance through a straw man wouldrequire the execution and recordation of two separate deeds.16 Never-theless, there is considerable doubt that a conveyance by the wife toherself and her husband would create a tenancy by the entirety in NorthCarolina. Our court has not directly passed upon the problem, but it hasheld that an attempted conveyance by a third party to the husband and'o "In the attempt to create an estate by entirety, in the case under consideration,neither the unity of time nor title was observed. The estate was not created by oneand the same act, neither did it vest in them at one and the same time." Pegg v.Pegg, 165 Mich. 228, 230, 130 N. W. 617, 618 (1911)." Ebrite v. Brookhyser, 219 Ark. 676, 244 S. W. 2d 625 (1951) ; Herr v. Herr,13 N. J. 79, 98 A. 2d 55 (1953) ; Boehringer v. Schmid, 254 N. Y. 355, 173 N. E.220 (1930) ; In re Klatzl's Estate, 216 N. Y. 83, 110 N. E. 181 (1915).1 The leading case is In re Klatzyl's Estate, 216 N. Y. 83, 110 N. E. 181 (1915),explained in Boehringer v. Schmid, 254 N. Y. 355, 173 N. E. 220 (1930).' Ibid."4Davis v. Bass, 188 N. C. 200, 204, 124 S. E. 566, 568 (1924). Stacy, J., inlisting some of the properties and incidents of tenancy by the entirety stated: "Inthe eyes of the law an estate by the entirety is vested in one person-the husbandand wife."2 TIFFANY, REAL PROPE TY 225 (1939).6 . C. GEN. STAT. § 47-18 (1950).1956]NORTH CAROLINA LAW REVIEWwife as tenants by the entirety will be considered a conveyance to thewife alone when she has furnished all of the consideration. 17 Thus, anestate by the entirety, with rights of survivorship, can be created onlyif the husband is jointly entitled to the property as well as jointly namedin the deed.' 8 The basis for the distinction is that a married woman ispresumed to have acted under the coercion of her husband. 9Another problem arises when a husband and wife own the propertyas tenants by the entirety and one of them wants to convey his interestto the other. Such a conveyance is valid in several jurisdictions.2 0 Theposition of the North Carolina Supreme Court on this is at least partiallyclear. If the conveyance is made by the husband of his interest in theestate by the entirety, he will be estopped upon the death of his wife toclaim the property by survivorship and the property will go to the heirsor devisees of the wife.21  By the use of the doctrine of estoppel, thecourt has found it unnecessary to determine whether the deed is validas a conveyance. 22  No North Carolina authority concerning similarconveyances by the wife has been found.23These problems could be solved most effectively by the passage of aremedial statute. Such a statute is proposed as follows:Conveyances between spouses; creation and dissolution of es-tates by the entirety.(1) A conveyance from a husband or wife to the other of anundivided one-half interest in real property, by which the grantorretains a like undivided one-half interest, vests the title to the realproperty in the husband and wife as tenants by the entirety, pro-vided words are used indicating an intention to create an estateby the entirety.(2) A conveyance from a husband or wife to the other of the17 Ingram v. Easley, 227 N. C. 442, 42 S. E. 2d 624 (1947) ; Carter v. Oxendine,193 N. C. 478, 137 S. E. 424 (1927)." Davis v. Vaughn, 243 N. C. 486, 91 S. E. 2d 165 (1956) ; Ingram v. Easley,227 N. C. 442, 42 S. E. 2d 624 (1947) ; Sprinkle v. Spainhour, 149 N. C. 223, 62S. E. 910 (1908).10 Carter v. Oxendine, 193 N. C. 478, 137 S. E. 424 (1927) ; Sprinkle v. Spain-hour, 149 N. C. 223, 62 S. E. 910 (1908). If the husband conveys land to his wife,it is presumed that it is a gift to the wife. Shue v. Shue, 241 N. C. 65, 84 S. E.2d 302 (1954) ; Carlisle v. Carlisle, 225 N. C. 462, 35 S. E. 2d 418 (1945) (Thepresumption is one of fact and is rebuttable.) ; Rudasill v. Cabaniss, 225 N. C. 87, 33S. E. 2d 475 (1945).°Hunt v. Covington, 145 Fla. 706, 200 So. 76 (1941) ; Enyeart v. Kepler, 118Ind. 34, 20 N. E. 539 (1889).21 Keel v. Bailey, 224 N. C. 447, 31 S. E. 2d 362 (1944) ; Willis v. Willis, 203N. C. 517, 166 S. E. 398 (1932); Capps v. Massey, 199 N. C. 196, 154 S. E. 52(1930).22 Cases cited note 19 supra.2' See Elson v. Elson, 245 Mich. 205, 222 N. W. 176 (1928), where a convey-ance by a wife to her husband of her interest in property held by them as tenantsby the entirety was held a release of the wife's interest in the property.[Vol. 34NOTES AND COMMENTSgrantor's interest in real property held by them as tenants by theentirety dissolves the estate and vests the complete title in thegrantee.24FRANK J. HOLROYD, JR.Torts--Carriers-Termination of the Carrier-Passenger RelationshipThe high degree of care a common carrier owes to its passenger'necessarily terminates when the carrier-passenger relationship ceases toexist. Hence it has become incumbent upon courts to fashion standardsagainst which facts may be tested in order to ascertain the existence ornon-existence of a carrier-passenger relationship.Journey's EndWhether a carrier-passenger relationship has terminated often de-pends upon the type of common carrier involved and upon the physicalplace of the journey's end. If the passenger is discharged at a railroadcarrier's station, the general rule is that the relation of carrier and pas-senger continues until the passenger has had a reasonable time and op-portunity to leave the carrier's premises.2 The same rule applies whenthe passenger alights at a bus station3 or at an airline terminal.4  The' Based on OR. REv. STAT. § 108.090 (1953).1 For a note on the degree of care a common carrier owes to its passenger, seeNote, 17 Ni C. L. REV. 453 (1939).2 Emerson v. Carolina Casualty Ins. Co., 206 F. 2d 13 (8th Cir. 1953) ; Young v.Baldwin, 82 F. 2d 841 (8th Cir. 1936) ; MacGregor v. Pacific Electric Ry., 6 Cal.2d 596, 59 P. 2d 123 (1936) ; Georgia & F. Ry. v. Thigpen, 141 Ga. 90, 80 S. E.626 (1913); Sink v. Grand Trunk Western Ry., 227 Mich. 21, 198 N. W. 238(1924) ; Galehouse v. Minneapolis, St. P. & S. Ste. M. Ry., 22 N. D. 615, 135 N. W.189 (1912) ; Wessman v. Boston & M. R. R., 22 N. H. 475, 152 Atl. 476 (1930) ;Fagan v. Atlantic Coast Line R. R., 220 N. Y. 301, 115 N. E. 704 (1917) ; Laynev. Chesapeake & Ohio Ry., 68 W. Va. 213 69 S. E. 700 (1910). See, Pinson v.Kansas City Southern Ry., 37 F. 2d 652 (5th Cir. 1930). Relation of passenger-carrier continued until plaintiff leaving train had a reasonable opportunity to seeabout baggage and find means of getting to destination. See also, Fulghum v.Atlantic Coast Line R. R., 158 N. C. 555, 74 S. E. 584 (1912). Train passengeralighted in daylight at a flag station. A conductor helped her off and placed hersafely on the ground alongside the railroad track about 60 feet north of a railroadcrossing. Plaintiff, in making her way to the crossing, was injured when shestepped on a wet crosstie. Carrier's motion to nonsuit was affirmed on the basisof plaintiff's contributory negligence but Clark, C. J., dissenting, stated that theplaintiff was still a passenger since she had not left the carrier's premises.'Crown Coach Co. v. Whitaker, 208 Ark. 535, 186 S. W. 940 (1945) ; South-eastern Greyhound Corp. v. Graham, 69 Ga. App. 621, 26 S. E. 2d 371 (1943)."Delta Air Lines, Inc. v. Millirons, 87 Ga. App., 334, 73 S. E. 2d 598 (1952);Cf., Crowell v. Eastern Air Lines, Inc., 240 Ni C. 20, 81 S. E. 2d 178 (1954). Al-though the airport was leased by the city of Charlotte to the air carrier (a com-mon arrangement between municipalities and air carriers) the carrier was heldliable for injuries to one of its passengers who fell in a passageway furnished forboarding the airplane of the carrier. Accord, Horelick v. Pennsylvania R. R., 13N. J. 349, 99 A. 2d 652 (1953).1956]

Real Property -- Conveyances between Spouses -- Creation and Dissolution of Estates by the Entirety

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Real Property -- Conveyances between Spouses -- Creation and Dissolution of Estates by the Entirety

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