Opinion ID: 2053598
Heading Depth: 1
Heading Rank: 4

Heading: Felton Property and Arcadia Stock

Text: Felton executed a deed to premises 4800 Rising Sun Avenue, Philadelphia, to the parties as tenants by the entireties on December 23, 1941. The chancellor found that neither party successfully rebutted the presumption that ownership of the Felton property is vested in them as tenants by the entireties, a presumption which must be overcome by clear and convincing evidence ( Holmes Estate, 414 Pa. 403, 406, 200 A. 2d 745 (1964)), although he did find that the husband has prevented the wife from receiving any of the rentals produced by the property and that he has failed to account for said rentals. Arcadia, a Delaware corporation, incorporated on November 22, 1929, owns and operates the Arcadia Theatre in Philadelphia. On October 14, 1931, Uptown Realty Company transferred 50 shares of Arcadia stock to one Charles Segall, who, on January 2, 1934, transferred them to the husband. The wife subsequently acknowledged joint ownership of this stock with the husband and, when she surrendered these shares in return for a certificate for 40 shares of stock in 1943, she offered no objection that the certificate was issued to the parties as tenants by the entireties. Her objection arose only upon the parties' separation in 1962. The husband also acknowledged joint ownership of this stock in Arcadia Theatre Co. v. Sablosky, 418 Pa. 34, 46, 209 A. 2d 375 (1964). Despite such joint ownership, the chancellor found that the husband has deprived the wife of the use, benefit and enjoyment of the stock in that he has prevented her from voting her interest, has voted the stock contrary to her wishes, has denied her access to the Arcadia premises, has refused her access to the corporations books and records, has refused to permit her to receive dividends and has exercised personal management and operation of the corporation and theatre contrary to her wishes and without her participation. The chancellor appointed a receiver to vote the stock, receive dividends and state an accounting in Arcadia. The net result is that both Felton and Arcadia now stand owned by the parties as tenants by the entireties and that a receiver has been appointed in regard to both. It is immaterial whose funds were used to create the tenancy by the entireties ( Cribbs Estate, 411 Pa. 242, 250, 191 A. 2d 379 (1963)) and the placing of the property in both names, without more, created an estate by the entireties ( Brenner v. Sukenik, 410 Pa. 324, 330, 189 A. 2d 246 (1963)); Holmes Estate, 414 Pa. 403, 406, 200 A. 2d 745 (1964)). Once a tenancy by the entireties has been created, then neither spouse can appropriate to his or her own use the property held in such tenancy and the only appropriation which can be justified is one made in good faith for the mutual benefit of both parties to the tenancy: Berhalter v. Berhalter, 315 Pa. 225, 227-228, 173 A. 172 (1934); Nachman v. Nachman, 417 Pa. 389, 394, 208 A. 2d 247 (1965). The accruing income belongs in its entirety to each of the tenants and must be applied to their mutual benefit: Reifschneider v. Reifschneider, 413 Pa. 342, 344, 196 A. 2d 324 (1964). Each party challenges the chancellor's findings and decree concerning the Felton and Arcadia entireties' property. The wife contends that the chancellor erred in declining partition of the entireties' properties. The husband contends that the chancellor erred in appointing a receiver to account for the rentals because it is immaterial which party receives the fruit of entireties' property since presumptively it is used for the benefit of both: Wakefield v. Wakefield, 149 Pa. Superior Ct. 9, 25 A. 2d 841 (1942). See also: Schweitzer v. Evans, 360 Pa. 552, 63 A. 2d 39 (1949). The general rule regarding entireties' property is clear; neither tenant can partition (except after divorce) nor terminate or sever by his or her own conveyance, as a joint tenant can do, nor by his or her own act affect the other's right of survivorship: Holmes Estate, 414 Pa. 403, 407, 200 A. 2d 745 (1964). In Stemniski v. Stemniski, 403 Pa. 38, 42, 169 A. 2d 51 (1961) this Court stated that, a violation of the rules by one's spouse appropriating the property to his own use works a revocation of the estate by the fiction of the appropriation's being an offer of an agreement to destroy the estate and an acceptance of that offer when the other spouse starts suit: the property is then fit for accounting and division. See also: Berhalter v. Berhalter, 315 Pa. 225, 173 A. 172 (1934); Werle v. Werle, 332 Pa. 49, 1 A. 2d 244 (1938); Lindenfelser v. Lindenfelser, 396 Pa. 530, 153 A. 2d 901 (1959). Although Stemniski involved bonds and savings accounts, the earlier case of De Luca v. De Luca, 388 Pa. 167, 130 A. 2d 179 (1957), adjudged real property subject to accounting and division. And in Lindenfelser v. Lindenfelser, 396 Pa. 530, 534-535, 153 A. 2d 901 (1959), this Court considered both the earlier Lindenfelser case and De Luca case and stated the modern rule to be that where husband and wife are separated but not divorced and where one of them is excluded from the exercise or enjoyment of rights inherent in an estate held by the entireties, an accounting of the property so held may be ordered and the property or proceeds divided equally between them. The modern rule permits the partition of real estate: Stemniski v. Stemniski, 403 Pa. 38, 169 A. 2d 51 (1961); Lindenfelser v. Lindenfelser, 396 Pa. 530, 153 A. 2d 901 (1959); De Luca v. De Luca, 388 Pa. 167, 130 A. 2d 179 (1957); Lindenfelser v. Lindenfelser, 383 Pa. 424, 119 A. 2d 87 (1956); Berhalter v. Berhalter, 315 Pa. 225, 173 A. 172 (1934). The wife was excluded effectively from the exercise and enjoyment of her inherent rights in the entireties' properties. The record convincingly shows that the husband acted in a manner inconsistent and detrimental to the wife's interest in Arcadia stock. He has prevented her from voting the stock as she wished, has deprived her of dividends for her own use and support, and has allowed other corporations in which he has a substantial interest to occupy space in the Arcadia building without paying rent. The rentals from Felton have been paid to a bank and a portion applied to repay a loan created for the husband's sole benefit. He has refused to account to the wife for rentals received from said property and has prevented her from receiving any rentals for her own separate use. Even if the wife had established abuse by the husband to only one of the entireties' properties she still would be entitled to a partition of the several properties. She need not wait till all of the properties be dissipated: Watkins v. Watkins, 393 Pa. 284, 286, 142 A. 2d 6 (1958). In the case at bar, the chancellor has not refused partition. A receiver was appointed to serve until further order of the Court which retained jurisdiction of the matter. [6] And we are not to say that the chancellor erred in this respect in view of the need for an accounting to be rendered to the court showing exactly what is due each party with regard to these two assets. However, after such accounting is completed, then a division or partition is in order. By instituting this suit the wife has accepted the husband's offer of an agreement to destroy the entirety estate: Stemniski v. Stemniski, supra, p. 42. The chancellor determined that each party should bear half the costs, exclusive of the costs of the receiver. The power of the chancellor to impose costs, in whole or in part, on any party to the action is established by Rule 1526 of the Pennsylvania Rules of Civil Procedure. The exercise of that discretion by the court below will not be interfered with by an appellate court except where the lower court has grossly misused its power: Gordon v. Hartford Sterling Co., 350 Pa. 277, 286, 38 A. 2d 229 (1944); National A. & I. Co. v. Workmen's Circle, 289 Pa. 164, 169, 137 A. 184 (1927). We find no such misuse of discretion. The decree is affirmed in all respects except that Arcadia and Felton are to be partitioned after the receiver's accounting is completed. Appeal costs on Samuel Shapiro. Mr. Justice MUSMANNO would affirm the portions of the decree from which Samuel Shapiro appeals (288 January Term 1965) but would reverse the portions of the decree from which Edna Shapiro appeals (No. 343 January Term 1965).