Daily Development for
Tuesday, January 19, 1999

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

JOINT TENANCY: Surviving joint tenant, who had become sole owner of property, was not entitled to contribution from deceased joint tenant's estate for payment of jointly executed promissory note secured by a mortgage on the property.

Mellor v. O'Connor, 712 A.2d 375 (R.I. 1998).

The decedent had paid $85,000 toward acquisition of the property that was the subject of the joint tenancy, while the surviving joint tenant had paid $11, 450. They had jointly executed a note and mortgage for $140,000, the balance of the purchase price. After decedent died, the survivor paid off this mortgage with the proceeds of the sale of her former home, and sought reimbursement from decedent's estate. The executrices of decedent's estate counterclaimed for return of monies decedent had contributed to the purchase. The trial court denied the counterclaim, but also refused to grant a right of contribution. The Supreme Court of Rhode Island affirmed that ruling in this opinion.

This scholarly opinion marshalls authorities and arguments on both sides of the issue, a matter of first impression in Rhode Island. The court proceeds to adopt a minority viewpoint that had rarely been applied in cases outside of marital estates. The parties here were not married, but were engaged to be married at the time of decedent's death.

In cases concerning entitlement to contribution in this case from a deceased joint tenant's estate, the majority rule permits contribution to the surviving joint tenant, and the minority rule holds that the survivor is not entitled to contribution.

Jurisdictions adopting the majority rule have historically reasoned that (1) the joint and several nature of the obligation equitably entitles a joint debtor to contribution from those jointly liable with him, (2) the obligation is separate from the property by which it is secured, and (3) the decedent's estate benefits from the payment of a mortgage note obligation upon which it otherwise could be found liable.

The minority position has historically been adopted when the parties involved are married and (in all but one case) held property as tenants by the entirety.

Courts favoring the minority rule have traditionally emphasized the nature of the estate and the property securing the obligation, whereby the survivor acquires the whole interest therein, and the estate of the deceased does not retain the identical whole interest owned by him in his lifetime, and the resultant lack of benefit to the decedent's estate from the payment of an obligation which no longer constitutes a common burden.

In the case at hand, the joint tenants were not married. The court noted that under the joint tenancy, all of the decedent's interest in the property passed to the survivor, who retained total ownership. Because the decedent had no remaining interest, the court deemed it inequitable to compel contribution from his estate. Thus the court adopted the minority rule, concluding that equity favored the outcome that the deceased joint tenant's estate should not have to contribute to the surviving joint tenant for the outstanding debt secured by a mortgage on the real estate. The court recognized that had there been a default in the payment of the mortgage and had a subsequent foreclosure failed to garner an amount sufficient to cover the note, the mortgagee could have pursued an action against the decedent's estate. Nonetheless, the court noted that the plaintiff (i.e., the fiancee of the deceased) did not stand in the shoes of a creditor.

Comment 1: The court mentions the equities of the survivor's benefitting from the $85,000 equity investment by decedent in this property, which passed to survivor under the joint tenancy, but does not appear to be relying upon that factor in making its decision. Nevertheless, the decision clearly is one based upon the equities, and clearly special equities running in favor of contribution might lead to a different result in another case.

Comment 2: The editor has some difficult getting around the notion that the debt is a debt of the estate as well as a debt of the survivor. Had the lender sued to collect the debt, the estate would have been compelled to pay, subject to a right of contribution from the survivor a codebtor. It is the debt, and not the property ownership, that ought to be of primary concern here. The decedent voluntarily entered into a joint tenancy by which he got and gave a survivorship interest. That decision apparently was made knowingly and willingly, just as was the decision to become jointly liable on the debt. The estate should live with the decisions that the decedent made in his lifetime, and the editor concludes that the survivor should not be identified as the beneficiary of some unanticipated boon when she succeeded to a survivorship interest here. She "bought" that interest by agreeing that the decedent would have a parallel interest should she predecease him. In sum, the editor disagrees with the outcome and reasoning here.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1 - 6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. The same is true of all commentary provided by contributors to the DIRT list. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.