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#Post#: 32--------------------------------------------------
Sawada v. Endo
By: SunsetSailor Date: January 27, 2011, 10:23 pm
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FACTS:
* T1: Endo gets into an accident w/ the Sawadas and Sawadas
are injured—Endo is old and had no insurance
* T2: Helen Sawada files a complaint (Lawsuit #2)
* T3: Endo (Sr & wife) grants his interest in his property
(tenancy by the entirety) to his sons. They are taking the
property by joint tenancy with right of survivorship (don’t take
possession of the house & don’t pay anything for it).
* T4: Lawsuit #2—Mariko Sawada files complaint
* T5: Judgment for Plaintiff 1 (8K) & Plaintiff 2 (16K)—go
after Endo Sr.’s asset
* T6: Sawadas sue Endo again and their claim is that the
conveyance of Sr. to Jr. was fraudulent & that the property
should go back to Endo Sr. so it can be sued upon
* T7: Mrs. Endo dies
* COURT MUST DECIDE IF THE TRANSFER B/W ENDO SR. & ENDO JR.
IS FRAUDULENT
PROCEDURE:
* Trial Court: Refused to set aside the conveyance, and the
Sawadas appealed
* Court of Appeals: Affirmed
ISSUE: Whether the interest of one spouse is real property,
held in tenancy by the entireties, is subject to levy and
execution by his or her individual creditors.
RULES:
* We join the group of states…which hold that under the
Married Women’s Property Acts the interest of a husband or wife
in an estate by the entireties is not subject to the claims of
his or her individual creditors during the joint lives of the
spouses. (314)
1. Married Women’s Property Act: Said that women have
the right to control and manage their own separate property
after they become married
* But creditors are not entitled to special consideration.
If the dept arose prior to the creation of the estate, the
property was not a basis of credit, and if the debt arose
subsequently the creditor presumable had notice of the
characteristics of the estate which limited his right to reach
the property. (316)
* …there is obviously nothing to prevent the creditor from
insisting upon the subjection of property held in tenancy by the
entirety as a condition precedent to the extension of credit.
Further, the creation of a tenancy by the entirety may not be
used as a device to defraud existing creditors (316)
ANALYSIS: Having determined that an estate by the entirety is
not subject to the claims of the creditors of one of the spouses
during their joint lives, we now hold that the conveyance of the
marital property by Kokichi Endo and Ume Endo, husband and wife,
to their sons, Samuel H. Endo and Toru Endo, was not in fraud f
Kikichi Endo’s judgment creditors.
THIS IS NOT A JOINT DEBT—IT IS NOT ALIENABLE AND IT IS NOT
SUBJECT TO CREDITOR ATTACHMENT BY ONE SPOUSE (CREDITOR OF ONE
SPOUSE CANNOT LEVY ON THE PROPERTY IN TENANCY BY THE ENTIRETY)
CONCLUSION: Affirmed
DISSENT: I would hold that the separate interest of the husband
in entireties property, at least to the extent of his right of
survivorship, is alienable by him and subject to attachment by
his separate creditors, so that a voluntary conveyance of the
husband’s interest should be set aside where it is fraudulent as
to such creditors, under applicable principles of the law of
fraudulent conveyances
IF PROPERTY IS HELD BY HUSBAND AND WIFE IN TBE, A CREDITOR OF
ONLY THE HUSBAND CANNOT ATTACH THE CREDIT TO THE JOINT PROPERTY
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