Opinion ID: 2219007
Heading Depth: 1
Heading Rank: 2

Heading: Thomas's Rental Income from Gateway

Text: When a foreign court attempts to affect title to real property located in North Dakota, we have said that: It is settled in this State that a court decree or court judgment of another state in its determination of property rights may not directly affect or transfer title to real property situate in North Dakota.... A decree or judgment of a court of another jurisdiction having such a purported consequence will not be accorded full faith and credit under Article IV, Section I, of the Constitution of the United States. Rozan, supra, at 700. In this case, however, the valid Arizona judgment did not directly convey or encumber North Dakota real estate. Although the Arizona judgment did not affect real property, the garnishment action which executes the Arizona judgment does affect real property by essentially encumbering the property by taking the rentals. In addition we believe the right to receive land lease payments would be classified as intangible personal property. See f.n. 9. We therefore apply North Dakota law to the garnishment of the lease income. In 1988, the property which forms the basis of Gateway's lease was quit-claimed to Thomas and his wife as joint tenants, and not as tenants in common. As joint tenants, both Thomas and his wife hold a joint interest in the property. A joint interest is one owned by several persons in equal shares by a title created by a single transfer. NDCC § 47-02-06. Contrary to Thomas's assertions, the land is not, nor ever can be, community property by the mere fact that the marital couple resided in a community property state. [10] North Dakota is not a community property state and we do not apply community property principles to land within our borders. [11] We have held that each joint tenant has the right of enjoyment to the extent of his or her interest. In re Estate of Paulson, 219 N.W.2d 132 (N.D.1974). Although a joint tenant may not convey or otherwise encumber another joint tenant's interest in property without the authorization or consent of the cotenant, one may deal with strangers as freely as owners of property held individually, and may convey or otherwise encumber one's own interest in the property without the consent of the other joint tenant. Olson v. Fraase, 421 N.W.2d 820 (N.D.1988). It follows that during the continuance of the joint tenancy, each joint tenant may have his or her fractional interest taken for the satisfaction of their individual debts. Schlichenmayer v. Luithle, 221 N.W.2d 77 (N.D.1974). As Thomas is free to pledge, encumber, lease, or sell his interest in the joint estateor have it the subject of a judgment against himit is his sole and separate property. In 1988, Thomas leased the entire property to Gateway. The lease was not signed by the other joint tenant, Thomas's wife. We have held that a joint tenant may not encumber another joint tenant's interest in the property without the authorization or consent of the cotenant. Olson, supra . Though a lease of joint property must be made by the act of all cotenants, if such a lease is made without the cotenant's consent or authority, the lease will in most instances be deemed valid and deemed for the benefit of both joint tenants. Shelby v. Shelby, 212 Ky. 552, 279 S.W. 942 (1926). Even if Thomas's wife did not consent or otherwise ratify the lease, she would be entitled to an equal share of the rents, profits, and income of the joint property. While there is authority that one joint tenant may receive the whole rent of the joint property and is not accountable to his or her cotenant for receiving more than his or her share of the rents and profits, Black v. Black, 91 Cal.App.2d 328, 204 P.2d 950 (1949), we believe the better view is that a joint tenant is liable to account to his or her cotenant for receiving more than his or her portion of the rents and profits. See Falkner v. Falkner, 58 Mich.App. 558, 228 N.W.2d 461 (1975); Lawrence v. Lawrence, 231 Ark. 324, 329 S.W.2d 416 (1959). Compare In re Estate of Paulson, supra , [possession by one joint tenant is possession for the benefit of both]. This view is consistent with previous opinions of this court concerning the obligations existing between joint tenants. See, e.g., Fettig v. Fettig, 277 N.W.2d 278 (N.D.1979) [mortgagor who redeems in his own name presumptively redeems for all his cotenants and his holding of title will be in trust for benefit of all cotenants]. This right to accounting, however, is a personal one. In the past, we have held that tenants in common are entitled to an accounting against their cotenants. Stevahn v. Meidinger, 57 N.W.2d 1 (N.D. 1952); Johnson v. Johnson, 164 N.W. 327 (N.D.1917). We agree with the rationale that, absent a statute to the contrary, when one joint tenant collects rents on the property and does not proportionately share the rents with their joint tenants, the other joint tenants do not have a lien on the collecting joint tenant's share of the property. Palpar, Inc. v. Thayer, 115 Cal. App.2d 333, 252 P.2d 51 (1953); Anno. Accountability of Cotenants for Rents and Profits or Use and Occupation, 27 A.L.R. 184 (1923); Anno. Accountability of Cotenants for Rents and Profits or Use and Occupation, 51 A.L.R.2d 388 § 30 (1957). Rather, the liability for rents and profits on a joint tenancy is a personal charge against the joint tenant who holds the rents, and one is not entitled to a lien on the land to secure the sums adjudged to be due. Succession of Grubbs, 182 So.2d 203 (La.Ct. App.1965); Pistole v. Lanier, 214 Ky. 290, 283 S.W. 88 (1926). Thomas's wife made no appearance to defend her interest. She is entitled to a personal charge against Thomas for her share of the rental income, but it is not our province to apportion the income in order to limit American Standard's access to only Thomas's one-half interest in the income. We accordingly hold that all the rental income received by Thomas is subject to the garnishment proceeding. The trial court did not err in granting summary judgment in favor of American Standard in this regard. Rule 56 N.D.R.Civ.P.; Capsco, supra . We affirm the trial court's judgment. ERICKSTAD, C.J., MESCHKE, J., ALLAN SCHMALENBERGER, District Judge, and BERT L. WILSON, Surrogate Judge, concur. ALLAN SCHMALENBERGER, District Judge, and BERT L. WILSON, Surrogate Judge, sitting in place of LEVINE and JOHNSON, JJ., disqualified.