North Carolina State Highway Commission v. Myers

154 S.E.2d 87 (1967) 270 N.C. 258

NORTH CAROLINA STATE HIGHWAY COMMISSION, Plaintiff,
v.
Irvin J. MYERS and wife, Sarah V. Myers, J. L. Carlton, Trustee, Winston-Salem Savings and Loan Association, Defendants.

No. 456.

Supreme Court of North Carolina.

May 3, 1967.

Randolph & Drum, Winston-Salem, for defendant appellant Sarah V. Myers.

Hayes & Hayes, Winston-Salem, for defendant appellee Irvin J. Myers.

BOBBITT, Justice.

The pleadings of defendants Sarah V. Myers and Irvin J. Myers relate primarily to their constroversy inter se with reference to the $10,455.00 now on deposit with the clerk. Neither has filed answer to the allegations of the complaint. It would seem appropriate that they do so if they desire a judicial determination as to what constitutes adequate and just compensation for the property appropriated by the Commission. G.S. §§ 136-105, 106, 107.

The sole question for decision is whether Sarah V. Myers is presently entitled to have distributed to her any portion of the $10,455.00 deposit. Decision turns upon whether this $10,455.00 (and any additional amount the Commission may be required to pay as compensation) has the status of real property owned by husband and wife as tenants by entirety.

The "properties and incidents of estates by the entirety" are summarized by Stacy, J. (later C. J.), in the oft-cited case of Davis v. Bass, 188 N.C. 200, 124 S.E. 566.

"An absolute divorce destroys the unity of husband and wife and therefore converts an estate by the entirety into a tenancy in common." Davis v. Bass, supra; McKinnon, Currie & Co. v. Caulk, 167 N. C. 411, 83 S.E. 559, L.R.A., 1915C; Smith v. Smith, 249 N.C. 669, 107 S.E.2d 530; Lanier v. Dawes, 255 N.C. 458, 121 S.E.2d 857. However, a divorce a mensa et thoro, which does not destroy the marital relationship, does not convert an estate by the entirety into a tenancy in common. Freeman v. Belfer, 173 N.C. 581, 92 S.E. 486, L.R.A. 1917E. Irvin J. Myers and Sarah V. Myers are husband and wife. There has been no divorce either absolute or from bed and board.

"(T)he husband is entitled during coverture to the full possession, control and use of the estate, and to the rents and profits arising therefrom to the exclusion of the wife." Nesbitt v. Fairview Farms, Inc., 239 N.C. 481, 486, 80 S.E.2d 472, 477. However, "the rents and profits therefrom, which belong to the husband, may be charged with the support of his wife." Porter v. Citizens Bank, 251 N.C. 573, 577, 111 S.E.2d 904, 908, and cases cited. In this respect, such rents and profits have the same status as other income and assets owned exclusively by the husband. In re Estate of Perry, 256 N.C. 65, 70, 123 S.E.2d 99, 102. Whether Sarah V. Myers is entitled to alimony is determinable in her action under G.S. § 50-16 referred to in the statement of facts.

Although the rents and profits therefrom and the actual possession thereof may be made available for the support of the wife, the court does not have the power to order the sale of land owned by husband and wife as tenants by the entirety in order to procure funds to pay alimony to the wife or to pay her counsel fees. Holton v. Holton, 186 N.C. 355, 119 S.E. 751; Porter v. Citizens Bank, supra.

An estate by the entirety can be destroyed or dissolved by the voluntary joint acts of the husband and wife. Wilson v. Ervin, 227 N.C. 396, 42 S.E.2d 468. Hence, where husband and wife sell and convey real property owned by them as tenants by entirety the proceeds of sale, including a balance purchase money note and security therefor, are considered personal property, and the husband and wife are tenants in common in respect of the ownership thereof. Shores v. Rabon, 251 N.C. 790, 793, 112 S.E.2d 556, 559, and cases cited. Decisions in other jurisdictions relating to the effect of such sales are cited in Anno., 64 A.L.R. 2d 8, 47 et seq.

Upon the filing of the complaint and the declaration of taking and deposit in court, the title and the right to immediate possession of the portion of the Myers property within the right of way of said project vested in the Commission. G.S. § 136-104. Voluntary action by the owners is not involved. The question for decision is whether such involuntary transfer of title effected by the condemnation proceeding operates to destroy or dissolve the estate by the entirety as if the condemned portion of the Myers property had been sold and conveyed by the voluntary joint acts of the owners thereof. Specifically, is the compensation paid by the Commission for the appropriated property constructively real property, owned by husband and wife as tenants by the entirety, or personal property owned in equal shares by husband and wife?

Unless otherwise provided by their joint and voluntary agreement, and in the absence of an absolute divorce, we are of opinion and so decide that such involuntary transfer of title does not destroy or dissolve the estate by the entirety in respect of the appropriated portion of the Myers land, and that the compensation paid by the Commission therefor has the status of real property owned by husband and wife as tenants by the entirety.

In Whitlock v. Public Service Company of Indiana, Inc., 239 Ind. 680, 159 N.E.2d 280, 161 N.E.2d 169, 79 A.L.R. 2d 1340, an eminent domain proceeding in which property owned by husband and wife as tenants by the entirety was condemned, the opinion states: "The Indiana law impresses the proceeds from property held by the entireties with the rights of survivorship, the same as the original property from which it came." The opinion of Arterburn, J., cites In re Idlewild Airport, Second Addition, 85 N.Y.S.2d 617 (Sup.Ct.), and In re Jamaica Bay, Boroughs of Brooklyn and Queens, City of New York, 252 A.D. 103, 297 N.Y.S. 415. In the Idlewild Airport case, it was held that the compensation award should be paid to the husband for land held by the entirety when the wife died after the award but before payment. In the Jamaica Bay case, where the husband died after the taking but before payment of the award, it was held that the wife was entitled to the entire principal sum. For additional decisions of like import, see Anno., 64 A.L.R. 2d 8, 61. No decision reaching a contrary conclusion has come to our attention.

The real property involved in Perry v. Jolly, 259 N.C. 305, 130 S.E.2d 654, was owned by H. K. Perry and his wife, Florence Johnson Perry, as tenants by the entirety. Mrs. Perry had been adjudged incompetent and W. M. Jolly had been appointed and was acting as her general guardian. A proceeding under authority of G.S. Chapter 35, Article 4, was under consideration. For present purposes, it is noted that a sale of the property under order of the court was approved by the husband and by the general guardian of the incompetent wife. It was held that such sale, as to the incompetent wife, was involuntary; and that such "involuntary sale of the lands does not destroy the tenancy by the entireties, but merely transfers the rights of the tenants from the land to the fund."

In Perry v. Jolly, supra, the sale, although involuntary as to the incompetent, was authorized only upon affirmative findings by the court that such sale was for the best interests of the husband and wife. Here, the transfer of title to the Commission is wholly involuntary. The appropriation of the Myers property in the condemnation proceeding is at the instance of the Commission and for the benefit of the public without regard to the wishes or best interests of the owners of the Myers property. A fortiori, such involuntary appropriation does not destroy the tenancy by the entirety, but merely transfers the rights of the tenants from the land to the funds.

Having reached the conclusion that Sarah V. Myers has no present right to any portion of the $10,455.00 deposit, the order of Judge Gwyn is in all respects approved and affirmed.

Questions relating to the rights of Irvin J. Myers with reference to said $10,455.00 deposit are not presented by this appeal. Suffice to say, there can be no disbursement of any portion thereof for any purpose unless specifically authorized by order of the court entered after hearing pursuant to notice to all interested parties.

Affirmed.