Or do you think this JTROS decision is accurate and fair?
This Alabama case* was discussed extensively on the DIRT listserv. I’d love to know how South Carolina lawyers react to the decision.
Here’s the recital of the facts from DIRT:
“Michael Upchurch, his brother Davis Upchurch, and his nephew Jason Upchurch owned several pieces of real property as joint tenants with the right of survivorship. They signed a contract to sell the properties to third parties. However, before closing, Michael died. In this declaratory judgment action, Michael’s widow Carol Upchurch, individual and as executor of Michael’s estate, asserted, among other things, a claim to one-third of the proceeds from that sale. David and Jason filed a motion for a summary judgment, which the circuit court granted. The Alabama Supreme Court held that under the circumstances, Michael, David, and Jason’s decision to enter into a contract to sell the properties severed their joint tenancy and that, as a result Michael’s estate was entitled to one-third of the proceeds from the sale of the properties. The Supreme Court therefore reversed the trial court’s judgment and remanded the case for the entry of a judgment in favor of the estate.”
What do you think about this opinion? Would a South Carolina court come to the same result?
I don’t believe our statute answers the question. For your consideration, here are relevant portions of our statute on the subject:
- § 27-7-40. Creation of joint tenancy; filing; severance
- (a)(ii) In the event of the death of a joint tenant survived by more than one joint tenant in the real estate, the entire interest of the deceased joint tenant vests equally in the surviving joint tenants who continues to own the entire interest owned by them as joint tenants with right of survivorship.
- (iv) If all the joint tenants who own real estate held in joint tenancy join in an encumbrance, the interest in the real estate is effectively encumbered to a third party or parties.
- (vi) If real estate is owned by more than two joint tenants, a conveyance by one joint tenant to all the other joint tenants therein conveys his interest therein equally to the other joint tenants who continue to own the real estate as joint tenants with right of survivorship.
- (ix) If real estate is owned by two or more joint tenants, a conveyance by all the joint tenants to themselves as tenants in common severs the joint tenancy and conveys the fee in the real estate to these individuals as tenants in common.
- (c) Except as expressly provided herein, any joint tenancy severed pursuant to the terms of this section is and becomes a tenancy in common without rights of survivorship.
The answer would seem clearer to me if only one joint tenant had entered into a contract. Severance of the joint tenancy would appear to be the correct answer. But under the facts recited here, I have my doubts.
The intention of the parties is always relevant. We don’t have any clear statement to that effect here. If all three had survived the sale, each joint tenant would have been entitled to his portion of the proceeds. But no document among the owners addressed a death prior to the sale. Originally setting up their interests as JTROS suggests their intent that a death of one would result in ownership by the other two. Did signing the contract evidence their intent to no longer own the properties as joint tenants?
One comment from DIRT suggested the court might have decided that the contract rights of the deceased owner survived his death and passed to his estate. But that’s not what the court held. It held that the JTROS was severed by the contract.
Dirt lawyers, what do you think?
*Upchurch v. Upchurch, Supreme Court of Alabama Case SC-2022-0478 (April 7, 2023)
4 thoughts on “Is this a classic case of “bad facts make bad law?””
I do not think this is a case of bad facts make bad law. I would say that it’s a bad statute. For example, it addresses the issue of mortgaging the property. All must sign the mortgage.
I would make the case that the contract breaks the joint tenancy, but that might make it hard to simply deal with the issue by filing a death certificate. I guess that’s where the bad law comes in.
If they had had a TICWROS what would be the result?
I don’t disagree with your thoughts about the statute, Henrietta. I’ve struggled with it many times over the years. It hits some issues and misses others.
Weigh in, dirt lawyers!
Hi Claire, long time listener, first time caller.
Before getting into the weeds, I wanted to thank you for your excellent work on this blog and your recommendation of the always entertaining DIRT listserv. Anyways, onward:
I also have my doubts about a South Carolina court reaching the same conclusion.
Without having read the case text in full, it would seem the Alabama court reached a similar conclusion as an Iowa court did years earlier (In re Bakers Estate, 247 Iowa 1380, 78 N.W. (2d) 863 (1956)), the holding of which involved two separate issues: (1) Was the joint tenancy of the legal title retained by the cotenants severed by the contract to convey? (2) By what form of tenure was the right to receive the proceeds from the contract held?
As to the first issue, the Iowa court held that (1) a contract to convey by one joint tenant works a severance, and by analogy a contract by both joint tenants to convey works the same severance, and (2) that that the equitable doctrine of conversion somehow caused a severance.
As to the second issue, the court noted that the contract was silent as to how the interest of the co-tenant sellers was to be held. From this, the court inferred an intent on the part of the cotenant sellers to hold the right to the proceeds by tenancy in common.
At common law, the method of creating a joint tenancy required a conveyance to have the four unities: interest, title, time, and possession (Smith v. Rucker, __ S.C. __, 593 S.E.2d 497, 499 (Ct. App. 2004) (citing Jenkins v. Jenkins, 8 S.C.L. (1 Mill) 48, 52 (1817))), and as you’ve mentioned, our statute states that “In the event of the death of a joint tenant survived by more than one joint tenant in the real estate, the entire interest of the deceased joint tenant vests equally in the surviving joint tenants who continues to own the entire interest owned by them as joint tenants with right of survivorship”.
Only the unities of title and interest are in question. A joint tenancy with a right of survivorship is capable of being defeated by the unilateral act of one joint tenant, but where all joint tenants act together to execute a contract, I don’t see how the unity of interest could have been destroyed.
In Dempsey v. Huskey, 224 S.C. 536, 80 S.E.2d 119 (1954), the Supreme Court of South Carolina recognized the general principle that an equitable interest arises in a vendee under a contract for the sale of land, although legal title to the property is retained by the vendor. Since legal title remains with the vendor, evidenced by the same deed, how then, could equitable conversion be used in any way other than as a tool for the vendee to demand legal title and to such an extent that it frustrates the intention of the cotenants when they took title as joint in the first place?
I find it hard to believe execution of the contract is evidence of anything other than intent to sell the properties. What if the contract had failed? Has the joint tenancy been severed merely by entering the contract? Is it revived by the contract’s failure? That seems a wide jump to make on something not contemplated within the four corners.
Lastly, and to address the issue of proceeds, what, if any, agreement was in place amongst the sellers regarding the proceeds? If none regarding division was then existing, and pardon me for reaching with this reference, how does “mere agreement by joint holders to convert their property from one specie to another … indicate a change of intent as to how the newly acquired property is to be held”? (I.R. 103, 207; Kingsford v. Ball, 2 Giff. (App.) i, 66 Eng. Rep. 294 (1852))
Excellent analysis of the issues, Ian! Thank you.
I’d love to hear the thoughts of other SC dirt lawyers.