Mermall, N.

English

Chicago-Kent College of Law

Chicago-Kent Law Review Volume 37 Issue 1 Article 5 April 1960 Husband and Wife - Conveyances to Husband and Wife - Whether the Proceeds from the Sale of Real Estate Owned in Joint Tenancy by Husband and Wife Are also Held in Joint Tenancy N. Mermall Follow this and additional works at: https://scholarship.kentlaw.iit.edu/cklawreview  Part of the Law Commons Recommended Citation N. Mermall, Husband and Wife - Conveyances to Husband and Wife - Whether the Proceeds from the Sale of Real Estate Owned in Joint Tenancy by Husband and Wife Are also Held in Joint Tenancy, 37 Chi.-Kent L. Rev. 62 (1960). Available at: https://scholarship.kentlaw.iit.edu/cklawreview/vol37/iss1/5 This Notes is brought to you for free and open access by Scholarly Commons @ IIT Chicago-Kent College of Law. It has been accepted for inclusion in Chicago-Kent Law Review by an authorized editor of Scholarly Commons @ IIT Chicago-Kent College of Law. For more information, please contact jwenger@kentlaw.iit.edu, ebarney@kentlaw.iit.edu. CHICAGO-KENT LAW REVIEWharm.19 Much less effect has been given the argument that the brokeris typically paid when the transaction is closed, regardless of the timewhen the commission is earned, and that it is a matter of practical expedi-ency that he should control the transaction to its conclusion.Against the background of the present increased activity of the realestate market and the admittedly long-continued practice of brokers inthe selection and completion of prepared forms incident to the closing ofreal estate transactions, the Supreme Court of Arkansas has spoken andthus appraised the public interest while resolving the proprietary conflictbetween brokers and attorneys. It is apparent that the circumstances pre-sented are not peculiar to Arkansas so it is not illogical to suggest thatsimilar controversies will arise, either again or for the first time, in otherjurisdictions. The significance of the instant decision lies in the fact thatit is the latest one. Since it has viewed all considerations in the light ofthe expanded activity, it behooves potential parties to similar disputes,including the courts which will hear them, to ponder the reasons for thispronouncement.Real estate brokers might well consider the obvious fact that, withoutregard to the reasons supporting their activity, they are competing withattorneys. They might well carefully weigh their own convenience andnecessities against the possible alienation of a prominent segment of so-ciety, with a view toward diminishing, where possible, the area of conflict.Attorneys, on the other hand, would do well to evaluate the possibility thatthe public will construe their attitude as a manifestation of selfishness orgreed; understandably so since the public will ultimately have to payfor any change. Despite this, attorneys should not forget that it remainstheir responsibility to originate dispute when the public interest is threat-ened. Since the embers of controversy are continually being fanned byeconomic pressures, it would be well for both sides, in consideration ofpublic as well as private interests, on their own initiative, to adopt somecommon-sense policies to prevent, or at least to mitigate, future flare-ups.L. D. SNOWHUSBAND AND WIF--CONVEYANCES TO HUSBAND AND WIFE-WHETHERTHE PROCEEDS FROM THE SALE OF REAL ESTATE OWNED IN JOINT TENANCYBY HUSBAND AND WIFE ARE ALSO HELD IN JOINT TENANcY-The questionof whether the proceeds from the sale of land held in joint tenancy werealso held in joint tenancy was presented to an Illinois reviewing court for19Ingham County Bar Association v. Neller Co., 342 Mich. 214, 69 N. W. (2d)713, 53 A. L. R. (2d) 777 (1955) ; Caneer v. Martin, 238 S. W. (2d) 828 (Tex. Civ.App., 1951).DISCUSSION OF RECENT DECISIONSthe first time' in the recent case of Illinois Public Aid Commission v. Stille.2Therein, the defendant and her husband had sold certain land which theyhad owned as joint tenants and had placed the sale proceeds in a safety de-posit box.3 Subsequently, the defendant's husband died. The plaintiff, in asupplementary citation proceeding to discover assets,4 sought to reach one-half of the proceeds in satisfaction of a judgment debt owed it by thedefendant's spouse. The defendant resisted on the ground that the pro-ceeds of the sale were held in joint tenancy with right of survivorship andhad become her sole property. The trial court dismissed the citation pro-ceeding and the plaintiff appealed directly5 to the Supreme Court of Illi-nois. That tribunal reversed and remanded the case when it concludedthat the proceeds from a completed sale of land owned in joint tenancywere not automatically taken in joint tenancy by the sellers.A joint tenancy in personal property must be established in the samemanner as a joint tenancy in realty.6 The person claiming such form ofownership must establish the intent and the common law unities of time,title, possession and interest in the property. 7  That such a common lawjoint tenancy existed in the immediate case is not to be questioned, butconformation with applicable statutory requirements must also be shown8if the arrangement is to be upheld.The only statutory requirement to be met in the immediate case isthe one embodied in the so-called Joint Rights and Obligations Act.9 Onesection of that statute clearly and unequivocably abolishes the right of1 The Supreme Court treated the instant case as one of first impression and citedno other case in point. It would appear, however, that the abstract opinion in thecase of Schreiber v. Lovewell, 314 Ill. App. 201, 40 N. E. (2d) 803 (1942), reachedthe same conclusion.2 14 Ill. (2d) 379, 153 N. E. (2d) 59 (1958).3 The defendant further contended that, by virtue of the terms of the lease to thesafety deposit box, the contents thereof were held in joint tenancy. This conten-tion was rejected on the ground that the lease did not comply with Ill. Rev. Stat.1959, Vol. 2, Ch. 76, § 2.4 This procedure is authorized by Ill. Rev. Stat. 1959, Vol. 2, Ch. 110, § 73.5 Direct appeal is provided for in all cases relating to state revenue or in whichthe state is interested, as a party or otherwise: Ill. Rev. Stat. 1959, Vol. 2, Ch.110, § 75.6 In re Wilson's Estate, 336 I. App. 18, 82 N. E. (2d) 684 (1948), affirmed In404 Ill. 207, 88 N. E. (2d) 662 (1949).7 Klouda v. Pechousek, 414 Ill. 75, 110 N. E. (2d) 258 (1953) ; Welch v. James,408 I1. 18, 95 N. E. (2d) 872 (1951) ; Tindall v. Yeats, 392 Ill. 502, 64 N. E. (2d) 903(1946) ; Porter v. Porter, 381 Ill. 322, 45 N. E. (2d) 635 (1942) ; Hood v. Common-wealth Trust & Savings Bank, 376 Ill. 413, 34 N. E. (2d) 414 (1941) ; Deslauriersv. Senesac, 331 Ill. 437, 163 N. E. 327 (1928) ; Liese v. Hentze, 326 Ill. 633, 185 N. E.428 (1927) ; David v. Ridgely-Farmers Safe Deposit Co., 342 Ill. App. 96, 95 N. E.(2d) 725 (1950).s David v. Ridgely-Farmers Safe Deposit Co., 342 Ill. App. 96, 95 N. E. (2d) 725(1950).9 111. Rev. Stat. 1959, Vol. 2, Ch. 76, § 2.CHICAGO-KENT LAW REVIEWsurvivorship in a joint tenancy of personal property and permits suchright to exist only by way of exception to the general rule. 10 The oneimportant exception enumerated in the statute is that wherein personalproperty is transferred by means of a will or other instrument in writingwhich expresses an intention to create a joint tenancy with right of sur-vivorship in the property so transferred. When some "other instrumentin writing"" is relied upon, such instrument should comply with the gen-eral requirements of a will in regard to the certainty of description, theparties and the objective purpose. If the property is money, the amountshould also be specified in the instrument, as of the time the title passesto the joint tenants.1 2 While the statute does not change the required ele-ments for the creation of a joint tenancy, it does establish how such acommon law joint tenancy must be evidenced.The defendant in the instant case made no claim to the existence ofany special writing on the point nor do the reported facts indicate thatthere was any provision in writing contained in the sales contract whichcould be said to satisfy the statutory requirement or bring the case withinany of the statutory exceptions. Notwithstanding this lack of the requiredevidence, the defendant sought to retain the funds by right of survivor-ship on the basis that the proceeds from the sale of the real estate took onand assumed the same qualities of survivorship as the property from whichthey were derived. The case of Watson v. Watson13 was cited as authorityfor this contention. Therein, a husband and wife, who owned land injoint tenancy, entered into an installment contract to sell the land. Thehusband died while the contract was executory to the extent of severalunpaid installments on the price and as to the ultimate conveyance of thetitle. The administrator of the husband's estate claimed a portion of theproceeds which were paid by the vendee to the surviving widow after thedeath of her husband. The relevant holding therein ran merely to theeffect that the court would not apply the doctrine of equitable conversionso as to divest the survivor of her right, by way of survivorship, to thesums remaining unpaid at death.There is a basic factual difference between the Watson case and theone at hand and it is to be found in the status of the two sales contractsat the time the joint tenant died. In the Watson case, the contract wasstill executory on both sides; in the instant case, it had been fully per-10 In re Wilson's Estate, 404 Ill. 207, 88 N. E. (2d) 662 (1949) ; David v. Ridgely-Farmers Safe Deposit Co., 342 Ill. App. 96, 95 N. E. (2d) 725 (1950) ; Vaughn v.Millikin Nat. Bank, 263 Ill. App. 301 (1931).11 Ill. Rev. Stat. 1959, Vol. 2, Ch. 76, § 2.12 See the first two cases cited in note 10, ante.18 5 Ill. (2d) 526, 126 N. E. (2d) 220 (1955).DISCUSSION OF RECENT DECISIONSformed by all of the parties to it. If the two cases are to be legally dis-tinguishable, this distinction must provide the justification. But that itdoes not is clear when reference is made to the fact that the legislature, inunequivocably abolishing the right of survivorship in personal propertyexcept when evidenced in statutory form, excepted no particular form orforms of personal property. 14 It must be concluded, therefore, that thestatute was equally applicable to both cases, so the Watson case should betreated as an aberration in law.While the decision in the Watson case, and the one attained in stillanother prior Illinois case,'15 represent a deviation from the legislativemandate in relation to personal property, this deviation, though contraryto the holding in the majority of cases, is not totally frivolous. If courtswere to apply the statute strictly in all instances, there would be timeswhen they would achieve results contrary to reason and directly oppositeto the contemplation of the parties. In a majority of the cases, the courtshave construed the statute as requiring compliance with exacting formali-ties to be insisted upon even though this required apparent disregard ofintent of the parties 6 and their seemingly reasonable efforts to make aformal statement of such intent. 7 But the harsh and unreasonable resultwhich could stem from an inflexible application of the statute as writtencan be exemplified by consideration of the anomaly that could result in asituation wherein the joint tenant owners of a building acted to let thepremises or a portion of the space therein. It would appear that, unlessthe lease contained a provision respecting the rent paid which satisfied thestatute, the money paid as rent would be held under a tenancy in common,prior to division, even though the real estate which produced the cash rentwas jointly owned. In the same way, claims to money accruing underpolicies of insurance on the premises, or the proceeds received therefrom,would likewise be held in common, absent an adequate provision in thepolicies to cover the point.It is pertinent to note that, in situations of this character, the per-sonal property involved is so closely connected and identified with the realestate from which it is produced that it does violence to the very relation-ship of the parties and to their apparent intent if the usufruct is to be14 The legislature in no way indicated that less than all kinds and types of per-sonal property were to be included in the operation of the statute. The onlyexceptions named therein are based on factors other than the intrinsic characterof the personal property.15 In re Jogminas' Estate, 246 Ill. App. 518 (1927).16 See notes In 41 Cornell L. Q. 154 and 43 Ill. B. J. 928.17 Harvey v. United States, 185 F. (2d) 463 (1953) ; In re Sneider's Estate, 12Ill. App. (2d) 485, 139 N. E. (2d) 651 (1957) ; In re Wilson's Estate, 336 Ill. App.18, 88 N. E. (2d) 662 (1949) ; In re McIlrath's Estate, 276 Ill. App. 408 (1934).CHICAGO-KENT LAW REVIEWtreated as a separate asset for the purpose of determining the applicabilityof the statute here concerned. So long as the cash is still identifiable asbeing the product of the real estate, why should it not be held under thesame form of ownership until the parties clearly demonstrate that it istheir wish to do otherwise? Also to be considered is the fact that thejoint tenancy form of ownership is used, perhaps most commonly used, be-tween a husband and his wife. Acting as a "poor man's will," it isuniquely adaptable to that relationship since it provides a practical andusually an inexpensive way of passing title on death without resort to aformal will or to the administration of an estate. Under holdings of thetype illustrated by the instant case, however, the exacting formal require-ments of the statute have worked to destroy, to a great extent, the practicaland dollar-saving features of the joint tenancy. As the law now stands,it would require the services of a lawyer to establish a joint tenancy at theoutset and further legal services each time an item of property so held wassold and the proceeds reinvested if continuity in the joint tenancy is to beachieved.It is the application, by the court, of the exception enumerated in thestatute that has created the problems discussed above. It cannot be told,from a simple reading of the legislative language, whether the unyieldingstrictness was intended by the legislature or has been developed throughjudicial construction and application. The evolution of the idea is aca-demic; the need of an active community is not. That need calls for legis-lative enactment and judicial determination sensitive to its requirements.As a practical proposition, therefore, there is evident occasion to reappraisethe law in this area to make it serve the reasonable expectations and desiresof the community.N. MERMALLLANDLORD AND TENANT-LIABILITIES FOR TAXES AND ASSESSMENTS-WHETHER, ABSENT AGREEMENT ON POINT, LESSEE IS LIABLE FOR INCREASEDREAL ESTATE TAXES ATTRIBUTABLE TO His IMPROVEMENT OF, DEMISEDPREMISES-The Supreme Court of New Jersey dealt with a situation uniqueto the appellate tribunals of that state when it decided the case of TheCrewe Corporation v. Feiler.1 The plaintiff therein, as lessor-owner,and the defendant, as lessee, had entered into a lease of a specified tractof land and the building thereon for a term of fifteen years which in-cluded an option to purchase. The premises were industrial in nature.Immediately after taking possession, the defendant effected a completeconversion of the building from its industrial character to that of an office128 N. J. 316, 146 A. (2d) 458 (1958).

Husband and Wife - Conveyances to Husband and Wife - Whether the Proceeds from the Sale of Real Estate Owned in Joint Tenancy by Husband and Wife Are also Held in Joint Tenancy

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Husband and Wife - Conveyances to Husband and Wife - Whether the Proceeds from the Sale of Real Estate Owned in Joint Tenancy by Husband and Wife Are also Held in Joint Tenancy

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