Sawada v. Endo

Supreme Court of Hawaii · 1977 · Property

PropertyTenancy by the entiretyCreditors' rightsFraudulent conveyancetenancy by the entiretyindividual creditorslevy and executionjoint lives

Facts

The Sawadas were injured when struck by a vehicle operated by Kokichi Endo and later obtained money judgments against him. At the time of the accident, Kokichi and his wife Ume owned Wahiawa real property as tenants by the entirety. Before the judgments were entered, Kokichi and Ume conveyed that property to their sons without consideration, and the sons knew their father had been in an accident and had no liability insurance. Kokichi and Ume continued to reside on the property, and after the judgments could not be satisfied from Kokichi's personal property, the Sawadas sought to void the conveyance as fraudulent.

Issue

Whether the interest of one spouse in real property held in tenancy by the entirety is subject to levy and execution by that spouse's individual creditors during the joint lives of the spouses. If not, whether a joint conveyance of such property by both spouses can be set aside as fraudulent as to the individual creditors of one spouse.

Rule

Under Hawaii law, as informed by the Married Women's Property Acts, neither spouse has a separate divisible interest in property held as tenants by the entirety that can be conveyed unilaterally or reached by execution by that spouse's individual creditors during the spouses' joint lives. The estate is indivisible except by joint action of both spouses, and a joint conveyance of entirety property is therefore not fraudulent as to the separate creditors of one spouse when those creditors had no right to reach the property in the first place.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Leah Moreno and Daniel Moreno, a married couple in Hilo, own their home as tenants by the entirety. After Daniel negligently injures a pedestrian, the pedestrian obtains a judgment against Daniel alone and seeks to force a sale of the home while both spouses are still alive.

How should a Hawaii court rule on the creditor's attempt to levy on the home?

Explanation. The majority held that in Hawaii, neither spouse has a separate divisible interest in tenancy-by-the-entirety property that can be conveyed unilaterally or reached by execution by that spouse's separate creditor during the spouses' joint lives. Each spouse is seized of the whole, and allowing levy would improperly convert the estate into something like a joint tenancy or tenancy in common.