Case Summary: Matilda Leis v. John F. Shaughnessy et al.

Factual and Procedural Background

Plaintiff Matilda Leis brought a partition action concerning real property originally deeded to her and defendant John F. Shaughnessy as tenants by the entirety. Plaintiff alleged she was divorced from Shaughnessy on June 22, 1949 and thus became a tenant in common; Shaughnessy denied the divorce but admitted an undivided interest in the property. Plaintiff married defendant Vincent J. Leis on July 3, 1949 and lived on the property with children of both marriages until July 1960, after which the property was rented for $145 monthly and plaintiff collected the rent. Plaintiff introduced an ex parte Florida divorce decree from Dade County. Defendant Leis sought adjudication of a lien for sums he expended on mortgage payments, taxes, insurance, repairs and improvements.

Legal Issues Presented

Whether the ex parte Florida divorce decree affects the parties' interests in the subject property recorded as tenants by the entirety.
Whether a partition may be granted when the parties hold title as tenants by the entirety.
Whether Vincent J. Leis is entitled to a lien for sums expended on the property and, if so, the amount and enforceability of that lien.
Whether defendants are entitled to offsets for occupancy or rents against any lien or accounting.

Arguments of the Parties

Plaintiff's Arguments

Introduced a Florida divorce decree to show she was divorced from Shaughnessy and thus a tenant in common.
Collected rents after July 1960 from the property.

Defendant John F. Shaughnessy's Arguments

Denied the validity of the Florida divorce decree, contending plaintiff was not a bona fide Florida resident and noting he had been confined to a mental institution when the action was begun.
Contended that Leis should be charged rental value for his occupancy and that of his children.
Claimed an offset for a share of rents collected and sought reimbursement for his mortgage payments.

Defendant Vincent J. Leis's Arguments

Requested adjudication of a lien for sums he expended on mortgage principal and interest, taxes, insurance, repairs and improvements to the property.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Huber v. Huber (26 Misc.2d 539)	The court held that an ex parte decree does not affect the parties' interests in real property held as tenants by the entirety.	Relied on this reasoning to hold that the ex parte Florida decree did not divest the parties' unity of title in the subject property.
Civ. Prac. Act, § 1012	Tenants by the entirety may not obtain partition.	Cited as statutory authority for dismissing the complaint insofar as it sought partition.
Vollaro v. Vollaro, 144 App. Div. 242	Supports the principle that tenants by the entirety cannot obtain partition.	Applied to dismiss the partition demand against tenants by the entirety.
Matter of Cornell, 240 App. Div. 996	As between spouses holding as tenants by the entirety, one may not charge the other for occupancy.	Used to overrule Shaughnessy's contention that Leis should be charged for occupancy by himself and his children.
Koff v. Koff, 150 N.Y.S.2d 302	Same principle regarding occupancy charges between tenants by the entirety.	Applied with Matter of Cornell to reject occupancy-charge argument.
Hiles v. Fisher, 144 N.Y. 306	A plaintiff who collects rents must account for them.	Held plaintiff must account for rents collected, though accounting does not offset Leis' lien.
Mastrofrancisco v. Mohawk Gas Co., 201 App. Div. 586	Authority that a party collecting rents must account.	Applied to require plaintiff to account for rents received.
Medina v. Medina, 206 Misc. 1100	Support for requiring accounting of rents received.	Applied to require accounting by plaintiff for rents collected since July 1960.
Sterns v. Stevans, 20 Misc.2d 417, 418	Law implies a gift where a spouse makes mortgage payments under certain circumstances; reimbursement is not required.	Applied to deny Shaughnessy's claim for reimbursement of his mortgage payments.
Empire State Fed. Sav. Loan Assn. v. Wukowitz, 197 N.Y.S.2d 87	Principles regarding sale to satisfy liens and treatment of surplus.	Cited for holding surplus subject to rights of tenants by the entirety and to be held pending termination of tenancy.
East Riv. Sav. Bank v. Kind, 26 Misc.2d 584	Authority regarding sale to satisfy liens and disposition of surplus funds.	Applied to direct that surplus from a sale be held subject to the parties' rights as tenants by the entirety.

Court's Reasoning and Analysis

The court first resolved an apparent inconsistency in defendants' pleadings by construing Shaughnessy's admission as acknowledging an undivided interest (not an admitted one-half share), given the ambivalent nature of tenancy by the entirety and Shaughnessy's contest of the divorce's validity. The court declined to decide the broader question whether Shaughnessy may now attack the Florida divorce after more than 11 years, noting the need for a guardian for the child of the second marriage if that issue were to be decided. Relying on the contemporaneous decision in Huber v. Huber, the court held that the ex parte Florida decree, even if effective to dissolve the marriage, did not affect the parties' property interests as tenants by the entirety. Because tenants by the entirety cannot obtain partition (Civ. Prac. Act, § 1012; Vollaro), the complaint's partition prayer was dismissed.

As to Leis's lien claim, the court found payments totaling $7,340.56 for mortgage principal, interest, taxes and insurance and $2,198.46 for repairs and improvements (total $9,539.02) were made with the knowledge and consent of both plaintiff and Shaughnessy; Shaughnessy's occasional payments did not render Leis a volunteer. Accordingly, Leis was entitled to a lien for $9,539.02. The court rejected Shaughnessy's occupancy-charge argument under authorities holding spouses holding as tenants by the entirety may not charge each other for occupancy. The court required plaintiff to account for rents collected but held such accounting could not be set off against Leis's lien and denied Shaughnessy's claim for reimbursement of his mortgage payments as the law implies a gift.

The court ordered that if Leis's lien is not paid within 30 days the premises be sold to satisfy it, that any surplus remain subject to the rights of plaintiff and Shaughnessy as tenants by the entirety and be held pending termination of that tenancy, and that Shaughnessy be permitted to amend his answer to seek an accounting of rents since July 1960, with the court retaining jurisdiction and provision for referral to an Official Referee if the parties cannot agree.

Holding and Implications

Holding: The court dismissed the complaint insofar as it sought partition and granted defendant Vincent J. Leis a lien upon the premises in the amount of $9,539.02, with direction that the premises be sold to satisfy that lien if not paid within 30 days. The court ordered plaintiff to account for rents collected since July 1960, permitted defendant Shaughnessy to amend his answer to request such an accounting, and retained jurisdiction for the accounting (with referral to an Official Referee if necessary).

Implications: The direct effect is dismissal of the partition claim and enforcement of Leis's monetary lien and remedy by sale if unpaid; any surplus from sale is to be held subject to the parties' rights as tenants by the entirety pending termination of that tenancy. The opinion does not announce a new legal rule beyond applying existing authorities to these facts.

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MATILDA LEIS, Plaintiff, v. JOHN F. SHAUGHNESSY et al., Defendants

BERNARD S. MEYER, J.

In this partition action plaintiff alleged that on June 22, 1949 she was divorced from defendant Shaughnessy and thereby became a tenant in common with him of the subject property which had originally been deeded to them as tenants by the entirety. Defendant Shaughnessy denied information and belief as to the divorce, but admitted that he and plaintiff had an undivided one-half interest in fee in the property. Since tenants by the entirety are each seized of the entire interest subject to divestiture only on consent, on divorce, or at death, there is an inconsistency between the denial and admission referred to. In view of the ambivalent nature of tenancy by the entirety and defendant Shaughnessy's vigorous contest of the validity of the divorce upon trial, the court resolves the inconsistency by construing the admission to mean that each has an undivided interest, rather than an undivided one-half interest. On July 3, 1949, plaintiff married defendant Leis and thereafter and until July, 1960 resided with him and the three children of her marriage to Shaughnessy and three children of Leis' former marriage in the subject property. Since July, 1960 the property has been rented for $145 and plaintiff has been collecting the rent. There is a child born of plaintiff's marriage to defendant Leis.

On the trial plaintiff introduced a decree of divorce from the courts of Dade County, Florida. Defendant Shaughnessy attacks the validity of that decree on the ground that plaintiff was not a bona fide Florida resident and because at the time the action was begun he was confined to a mental institution. The parties agree that he was released from the institution before the Florida decree was granted and that no appearance was entered by or for him in the Florida action. The evidence shows that he has been aware of the divorce since early July, 1949.

Whether defendant Shaughnessy should be permitted, in a real property action which only incidentally involves the validity of plaintiff's divorce, to attack its validity, notwithstanding that for more than 11 years, during which plaintiff remarried and bore a child of her remarriage, he took no direct action to that end, need not now be decided. Clearly such a decision could not be made in the absence of a special guardian for the child of the second marriage who would be bastardized by any such holding. But the court does not find it necessary to direct a retrial after appointment of such guardian or to determine the validity of the Florida decree in this proceeding, in view of the concession that the Florida proceeding was ex parte. For the reasons fully stated in Huber v. Huber ( 26 Misc.2d 539), also decided today, the court holds that whether or not valid to dissolve the marriage between plaintiff and Shaughnessy, the ex parte Florida decree did not affect their interests in the subject property. As to that property the parties remain husband and wife until such time as by death, by consent, or by decree of a court having jurisdiction over not only the marital res (if it be assumed that the Florida court had such jurisdiction) but over the person of defendant as well or over the property itself by seizure, their unity of title is dissolved. Since tenants by the entirety may not obtain partition (Civ. Prac. Act, § 1012; Vollaro v. Vollaro, 144 App. Div. 242), the complaint, insofar as it seeks partition, must be dismissed.

Defendant Leis by his answer asks that he be adjudged to have a lien for sums expended by him in payment of mortgage principal and interest, taxes, insurance and for repairs and improvements to subject property. The proof establishes that he expended $7,340.56 in payment of mortgage principal and interest, taxes and insurance and $2,198.46 for repairs and improvements during the period July, 1949 through October, 1960, and that these payments were made with the knowledge and consent of both plaintiff and defendant Shaughnessy, the latter having testified that he regularly checked with the bank to be sure the required payments had been made and that in 10 instances during 1951, 1952, 1953 and 1954, when payment had not been made, he, Shaughnessy, made payments totaling $471.78. Leis, therefore, may not be considered a volunteer as to the payments he made and is entitled to a lien on the premises in the amount of $9,539.02. Defendant Shaughnessy contends that Leis should be charged the rental value of his own occupancy and that of his children, but since those occupancies were an integral part of the occupancy by plaintiff and as between tenants by the entirety neither may charge the other for occupancy ( Matter of Cornell, 240 App. Div. 996; Koff v. Koff, 150 N.Y.S.2d 302), that contention is overruled. Shaughnessy also claims an offset for a share of the rents collected, but the proof showed that the rents are collected by plaintiff. While plaintiff will be required to account for the rent collected ( Hiles v. Fisher, 144 N.Y. 306; Mastrofrancisco v. Mohawk Gas Co., 201 App. Div. 586; Medina v. Medina, 206 Misc. 1100), it may not be offset against Leis' lien, nor may Shaughnessy receive reimbursement for his mortgage payment, as to which the law implies a gift ( Sterns v. Stevans, 20 Misc.2d 417, 418, and cases cited).

Defendant Leis is, therefore, entitled to judgment that his lien upon the premises equals $9,539.02, and to a direction that the premises be sold in satisfaction of that lien if not paid within a period of 30 days. The surplus, if any, resulting from such sale will remain subject to the rights of plaintiff and Shaughnessy as tenants by the entirety, and will be held in an account subject to court order pending termination of that tenancy by death or otherwise. ( Empire State Fed. Sav. Loan Assn. v. Wukowitz, 197 N.Y.S.2d 87; East Riv. Sav. Bank v. Kind, 26 Misc.2d 584.) While the accounting for rents received between July, 1960 and the date of sale is not related to disposition of the surplus, the court of its own motion will, in order to avoid multiplicity of action, permit defendant Shaughnessy to amend his answer to request an accounting of the rents received since July, 1960. The judgment to be entered will, therefore, award Leis judgment as hereinabove set forth, grant Shaughnessy judgment dismissing the complaint insofar as it seeks partition, grant Shaughnessy permission to amend his answer as above indicated, and retain jurisdiction of the proceeding for purposes of the accounting between plaintiff and Shaughnessy and will further provide that, if the parties are unable to agree as to such accounting, the matter be referred to an Official Referee for further proceedings. Settle judgment on notice.

LEIS v. SHAUGHNESSY