Summary
In Pietro v. Leonetti, a husband and wife owned certain real estate as joint tenants with the right of survivorship and at the time of the purchase of the property they did finance a portion of the purchase price by co-making a joint and several mortgage note.
Summary of this case from In re McClintockOpinion
No. 71-540
Decided May 24, 1972.
Descent and distribution — Husband and wife — Joint tenants with survivorship right — Property sold to discharge mortgage — Widow entitled to contribution from husband's estate, when.
A surviving spouse, who owned real property with her husband as a joint tenant with the right of survivorship, is entitled to receive contribution from her husband's estate where she has since sold the property and discharged all liability on a joint and several mortgage note which had been signed by both herself and the decedent.
APPEAL from the Court of Appeals for Cuyahoga County.
This cause was presented to the trial court upon a set of facts stipulated by both parties.
In August 1968, Joseph and Genevieve Pietro were married in Dade County, Florida. In January 1969, they contracted for the purchase of a residence located at 369 West Grace Avenue in the city of Bedford, Ohio. The purchase price of this home was $27,900. A $10,000 down payment was made by Joseph Pietro out of his personal funds. To finance the balance, both Joseph and Genevieve signed as co-makers a joint and several mortgage note, agreeing to pay $17,900, with interest at the rate of seven percent per annum, to the United Savings Association, an Ohio corporation. Title to the realty was taken in the names of Joseph M. Pietro and Genevieve Pietro, husband and wife, their heirs and assigns, and to the survivor of them, his or her separate heirs and assigns.
On January 13, 1969, Joseph Pietro made his last will and testament wherein he provided for the children of his first marriage, Michael Pietro, Joseph Pietro, Paul Pietro and Nicholas Pietro, but neither devised any real property nor bequeathed any personal property to his second wife, Genevieve.
On March 24, 1969, Joseph Pietro died. Because of the survivorship rights contained in the warranty deed, upon her husband's decease, Genevieve Pietro became the sole owner of the Bedford residence. She made two mortgage payments of $127 each on the home, but subsequently sold the residence for $29,500 and discharged the mortgaged indebtedness of $18,419.36 owed by herself and her deceased husband.
She then filed a claim against the estate of her husband in which she asserted her entitlement to contribution based upon the joint and several obligation of the mortgage note. This claim was rejected by decedent's executor.
The trial court found in favor of the plaintiff-appellee, Genevieve Pietro, and entered judgment in her favor in the amount of $9,336.68, one-half of the since-discharged mortgage debt, plus one-half of the monthly mortgage installment payments paid by Genevieve Pietro. The Court of Appeals affirmed, and the cause comes to this court pursuant to the allowance of a motion to certify the record.
Messrs. Danaceau, Brown, Hausler Rothschild and Mr. Robert E. Danaceau, for appellee.
Mr. Albert Leonetti, for appellant.
The issue presented is whether or not a surviving spouse, who owned real property with her husband as joint tenants with the right of survivorship, is entitled to receive contribution from her husband's estate where she has since sold the property and discharged all liability on a joint and several mortgage note which both she and the decedent had signed as co-makers. We are of the opinion that such a surviving spouse is entitled to receive contribution.
This case is one of first impression in Ohio and we must look to other jurisdictions for authority.
We note first that it was pointed out in Kershaw Estate (1945), 352 Pa. 205, at 206, 42 A.2d 538:
"It is wholly immaterial that the mortgaged property, passing to the wife as surviving tenant by the entireties, did not constitute one of the assets of decedent's estate. The controlling fact is that he, together with his wife, was personally liable on the bond; that liability continued after his death and therefore constituted a debt of his estate: Black's Estate, 341 Pa. 264, 272, 19 A.2d 130, 134." (Emphasis added.)
The facts herein presented indicate that both Joseph and Genevieve signed a mortgage note which read: "* * * the undersigned jointly and severally promise to pay * * *."
R.C. 2117.31 reads, in part:
"When two or more persons are indebted in a joint contract, or upon a judgment founded on such contract, and either of them dies, his estate shall be liable therefor as if the contract had been joint and several, or as if the judgment had been against himself alone."
Thus, but for Genevieve's discharge, the mortgage note comprised a valid and enforceable claim against Joseph's estate.
As was stated in Keil v. Keil (1958), 51 Del. 351, at 356, 145 A.2d 563:
"A joint and several obligation of two parties, whether or not husband or wife, creates an obligation which is, on its face, for the benefit of both. * * * The payment of the debt by the survivor is certainly a benefit to the estate because it discharges a liability of the estate."
In Underwood v. Ward (1954), 239 N.C. 513, 515, 80 S.E.2d 267, the court said:
"Upon the execution of the notes the makers become primarily liable, jointly and severally, for the payment thereof; and as between the plaintiff and her husband's estate the liability of each is for the payment of one-half of the amounts owing when the husband died. This is the explicit holding in Wachovia Bank Trust Co. v. Black, 198 N.C. 219, 151 S.E. 269."
Ample authority exists to support our conclusion that the right of contribution exists where, upon the decease of one of two joint obligors on a mortgage note, and payment in full of that note is made by the remaining obligor, the estate of the deceased is liable to pay one-half of the obligation. Cunningham v. Cunningham (1930), 158 Md. 372, 148 A. 444; Wachovia Bank Trust Co. v. Black, supra ( 198 N.C. 219); Newson v. Shackleford (1931), 163 Tenn. 358, 43 S.W.2d 384; Kershaw Estate, supra ( 352 Pa. 205) ; Dowler Estate (1951), 368 Pa. 519, 84 A.2d 209; Underwood v. Ward, supra ( 239 N.C. 513); Brown v. Hargraves (1957), 198 Va. 748, 96 S.E.2d 788; Keil v. Keil, supra ( 51 Del. 351); In re Estate of Rosenthal (1967), 34 Wis.2d 402, 149 N.W.2d 585; In re Estate of Linker (Colo.App. 1971), 488 P.2d 1128.
The Wisconsin case, styled In re Estate of Rosenthal, supra, presented the precise question with which we are herein concerned. The court, in that case, recognized the existing conflict of authority on the subject and found that "the right of survivorship passes title to the property immediately but does not remove the liability of the husband which was created at the time of purchase." We are in accord, and it is our determination that Genevieve Pietro is entitled to receive contribution.
Judgment affirmed.
SCHNEIDER, STERN and BROWN, JJ., concur.
O'NEILL, C.J., HERBERT and LEACH, JJ., dissent.
Under the facts before us, the majority's decision results in this estate being obligated for one half of the liability, but being entitled to virtually none of the benefits, resulting from the disposal of this property. Equity has historically abhored such a result, and contribution is predicated upon equitable principles.
O'NEILL, C.J., and LEACH, J., concur in the foregoing dissenting opinion.