Case Name: Susan WARREN v. James Timothy WARREN
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1981-09-28
Citations: 273 Ark. 528
Docket Number: 81-58
Parties: Susan WARREN v. James Timothy WARREN
Judges: Purtle, J., dissents.
Reporter: Arkansas Reports
Volume: 273
Pages: 528–538

Head Matter:
Susan WARREN v. James Timothy WARREN
81-58
623 S.W. 2d 813
Supreme Court of Arkansas
Opinion delivered September 28, 1981
Supplemental Opinion on denial of rehearing delivered December 7, 1981
Patten, Brown & Leslie, by: Charles R. White, for appellant and cross-appellee.
William P, Smith oí Mobley & Smith, for appellee and cross-appellant.

Opinion:
Robert H. Dudley, Justice.
On Spetember 28, 1979, James Warren filed suit for a divorce against Susan Varren. -The trial court granted Susan Warren a divorce on her counter claim, divided the property, awarded custody of the child, ordered child support and impounded funds belonging to James Warren. All of the decree is appealed except the granting of the divorce and the awarding of the custody of the child.
The Warrens purchased part of their property and filed their suit after the effective date of Act 705 of 1979, commonly referred to as the marital property act. Ark. Stat. Ann. § 34-1214 (Supp. 1979). The trial court ruled that property held in a tenancy by the entirety was not affected by the 1979 marital property division act.
We have traditionally recognized two categories of property in divorce cases. One category has been divided pursuant to the general property division statute which has been codified as Ark. Stat. Ann. § 34-1214 in the 1947 publication, the 1962 replacement and the various supplements prior to 1979. The other category, property held in tenancies by the entireties, has never been divided pursuant to the general property division statute.
Our rule of law on this second category, or entirety property, was well stated in Jenkins v. Jenkins, 219 Ark. 219, 242 S.W. 2d 124 (1951).
We have repeatedly held that a decree of divorce cannot dissolve an entirety case. See Roulston v. Hall, 66 Ark. 305, 50 S.W. 690; Heinrich v. Heinrich, 177 Ark. 250, 6 S.W. 2d 21; Ward v. Ward, 186 Ark. 196, 53 S.W. 2d 8; and Davies v. Johnson, 124 Ark. 390, 187 S.W. 343. In Heinrich v. Heinrich, supra, we said: "An estate by entirety, either legal or equitable, cannot be divested out of the husband and invested in the wife, or vice versa, by the courts. The right to the whole estate by the survivor prevents this. Roulston v. Hall, 66 Ark. 305, 50 S.W. 690, 74 Am. St. Rep. 97."
The majority of jurisdictions hold that divorce dissolves the entirety estate; but our holding to the opposite conclusion has become a rule of property in this State.
See also, Tenancy by the Entirety — Divorce — A Peculiar Rule of Property in Arkansas, 22 Ark. L. Rev. 386 (1968).
By Act 340 of 1947, Ark. Stat. Ann. § 34-1215 (Repl. 1962), the General Assembly gave courts the authority to convert marital survivorship estates to a tenancy in common. That explicit and concise act stated:
Courts of Equity, designated Chancery Courts within the State of Arkansas shall have the power to dissolve estates by the entirety or survivorship, in real or personal property, upon the rendition of a final decree of divorcement, and in the division and partition of said property, so held by said parties, shall treat the parties as tenants in common.
This statute is the only authority for dividing estates by the entirety, and it provides for the equal division of property without regard to gender or fault. Minor amendments have since been made but they have no bearing on the issues of this case. See § 34-1215 (Supp. 1981).
From 1891 until the effective date of Act 705 of 1979, all property in the general property category was divided according to the general property division statute, § 34-1214. The first clause in that general statute provided for a limited restoration to each spouse of his or her property not disposed of at the commencement of the action. For a detailed discussion of this provision and a citation of applicable cases see Domestic Relations —Restoration of Property — Obtained In Consideration or by Reason of Marriage Upon Divorce, 7 Ark. L. Rev. 64 (1952). The statute next provided that when the wife was granted the divorce because she was the "injured party" as described by § 34-1203 (Repl. 1962), she was entitled to one-third of the husband's personal property absolutely and one-third of his real property for life. We have referred to the clause in the statute as "awarding the injured wife her dower." Alston v. Bitely, 252 Ark. 79, 477 S.W. 2d 446 (1972). If the divorce was granted to the husband because of the fault of the wife, the statute was construed to mean that she was not entitled to any dower whatsoever. Kendall v. Crenshaw, 116 Ark. 427, 173 S.W. 2d 393 (1915). The statute made no provision whatever for the husband to share in the wife's property. This statute, § 34-1214 (Repl. 1962), required that property be divided on the bases of gender and fault while property divided according to the entirety statute, § 34-1215, was always divided equally.
The reasons for the amendment of § 34-1214 (Repl. 1962) by Act 705 of 1979 are obvious. Public caveats on the infirmities of the old statute were given. See Family Law — Divorce — Constitutionality of Arkansas Property Settlement and Alimony Statutes, 2 UALR Law Journal 123 (1979). The fact recites that those warnings were heard:
SECTION 7. It is hereby found and determined by the General Assembly that in a dissenting opinion to the recent case of McNew v. McNew, 262 Ark. 573 (1977), regarding Ark. Stat. Ann. § 34-1214, a justice of the Arkansas Supreme Court said that "The Arkansas law regarding property was enacted before the turn of the century and can no longer be defended historically or legally with any confidence," and that "It clearly violates the Equal Protection Clauses of the Arkansas and the United States Constitutions"; that in the majority opinion in that same case the Court did not decide this issue, stating "We will not decide constitutional issues unless their determination is essential to disposition of the case," and holding that this issue of property division at the time of a divorce action was not properly before it; that a decision holding that Ark. Stat. Ann. § 34-1214 is unconstitutional would create chaos in all divorce actions then pending in Arkansas courts until such time as the Arkansas General Assembly could enact legislation to cover this subject; and that this Act is designed to correct and clarify the law on this subject. *
Appellant contends that even though the reasons and the intent for amending the general property division statute, § 34-1214, are crystal clear, the act also abolished the separate statute dealing with entirety property. We disagree. Section 1 of the 1979 act, as well as Section 7 quoted above, state that the general property division statute, § 34-1214, is the statute amended.
SECTION 1. Section 416 of the Arkansas Civil Code, as amended, the same being Arkansas Statutes Section 34-1214, is hereby amended to read as follows:
In 1979 it was necessary for the General Assembly to take some immediate action to cure the defects in § 34-1214. Consequently, Act 705 was made applicable to all cases filed after its effective date and it necessarily affected property purchased before, as well as after, that effective date. By excluding that separate category of property, estates by the entireties, the General Assembly wisely avoided a legal quagmire, for in Jenkins v. Jenkins, 219 Ark. 219, 242 S.W. 2d 124 (1951), we had held that an estate by the entirety in real estate created a vested property interest which could not be modified by a statute which became effective after the date of purchase.
Act 705 nowhere refers to property acquired as tenants by the entirety; it only refers to "all property acquired by either spouse." Section (1) (B). The conspicuous reason for not amending § 34-1215, the entirety statute, is that it did not need amending. It has no constitutional infirmities.
There is also an apparent consideration of public policy by the General Assembly, and that is the recognition that there ought to be reckonability in the law. When a husband and wife cause a marital survivorship instrument to be created they ought to know that if they remain married the survivor will own the property, and they ought to know that if they divorce the property will be divided equally, and they ought to know that they will not be subjected to the eight variables of the 1979 act. The variables which may be taken into consideration by the court in dividing general marital property are:
(1) the length of the marriage; (2) age, health and station in life of the parties; (3) occupation of the parties; (4) amount and sources of income; (5) vocational skills; (6) employability; (7) estate, liabilities and needs of each party and opportunity of each for further acquisition of capital assets and income; (8) contribution of each party in acquisition, preservation or appreciation of marital property, including services as a homemaker.
Wehold that Act 705 of 1979, § 34-1214 (Supp. 1979),is not applicable to property owned as tenants by the entirety.
In this case the home and apartment building were owned by the parties as tenants by the entirety. Susan Warren contended that James Warren fraudulently caused her to include him on the warranty deeds. Clearly, the entirety dissolution statute, § 34-1215 (Supp. 1981), has no application where one of the parties fraudulently causes his or her name to be added to the deed. Johnson v. Johnson, 237 Ark. 311, 372 S.W. 2d 598 (1963). The Chancellor found that she had not been defrauded. Admittedly, it was a difficult factual decision. The testimony of Susan Warren is nebulous. She did not know who prepared the deeds, admitted that it was her idea to purchase the properties, and at one time admitted and at another time denied that she discussed the purchases with her mother and with the family attorney. She offered no testimony about a fraudulent act by Jimmy Warren and testified there was no discussion concerning title. The only reasons given to set aside the tenancy by the entirety are that he left only two days after she put the property in both names and he contributed nothing to the down payment. They both still owe on the balance. The Chancellor found no fraud. Findings of fact by a trial court will not be set aside unless they are clearly against the preponderance of the evidence. Rule 52, Arkansas Rules of Civil Procedure, Vol. 3A (Repl. 1979). We cannot say that the findings of fact by the trial judge are clearly against the preponderance of the evidence and we affirm on this issue.
The certificate of title to the 1971 Corvette automobile was in the names of "James T. or Susan Warren." Since Union and Mercantile Trust Co. v. Hudson, 147 Ark. 7, 227 S.W. 1 (1921), tenancies by the entireties in personal property have been upheld. However, in this case title was taken in alternative names so that one could transfer title to the divestment of the other. This does not qualify as a tenancy by the entirety. See Franks v. Wood, 217 Ark. 10, 228 S.W. 2d 480 (1950). However, it does create a " . . . survivorship in real or personalty . . as set forth in the entirety division statute, § 34-1215. We affirm the action of the trial court in treating this automobile pursuant to the entirety division statute.
The trial court correctly applied the marital property statute, § 34-1214 (Supp. 1979), to the rest of the personal property. We cannot say that dividing equally the proceeds derived from the sale of this property is against the preponderance of the evidence.
At the time of the trial James Warren was earning take-home pay of $250 per week. During the marriage Susan Warren gave him substantial sums of money and gave him the entirety interest in the home and apartment building. She is now a college student with the responsibility of raising a small child. Under these circumstances we modify the amount of child support from $37.50 to $50 per week.
The trial court ordered that all the proceeds from the sale of James Warren's interest in the property be impounded in order to insure future child support payments. There was no pleading asking impoundment, no notice and no proof on the matter. There is no judgment for arrearages and this does not qualify as a bond. We find no authority for the impoundment of funds under these conditions and reverse this holding on cross-appeal. The manner of distributing the proceeds as set out in the decree is otherwise affirmed.
Affirmed as modified on appeal. Reversed on cross-appeal.
Purtle, J., dissents.