Sawada v. Endo

Brief Fact Summary. The Plaintiffs, Mr. & Mrs. Sawada (Plaintiffs), sue to recover on a money judgment against the Defendants, members of the Endo family (Defendants), who granted property to their sons.

Synopsis of Rule of Law. Tenancy by the entirety, for reasons of public policy, is not subject to attachment or levy by their respective individual creditors.

Facts. Mrs. Sawada was injured after being hit by a car driven by Mr. Endo, one of the Defendants. Mr. Endo had no liability insurance. By deed dated prior to the accident, but recorded after the accident, the Defendants conveyed real property to their sons for no consideration. The Plaintiff sued to set aside the conveyance of the Defendants’ property. The trial court refused to set aside the conveyance and the Plaintiff appealed.

Issue. Whether the interest of one spouse in real property, held in tenancy by the entirety, can be reached by his or her individual creditors.

Held. Affirmed. The tenancy by the entirety is not subject to the claims of his or her creditors. The conveyance was not fraudulent and cannot be set aside.
The interest of a husband or a wife in an estate by the entireties is not subject to the claims of his or her individual creditors during the joint lives of the spouses.
Creditors are not entitled to special consideration, if the debt arose after the creation of the tenancy by the entireties, the creditor presumably had notice of the characteristics of the estate
The public policy interest furthered is one of family solidarity and allowing for convenient administration of the decedent’s estate without worrying about decedent’s debts.

Dissent. The dissent focused on an interpretation of the Married Women’s Act meant to equalize the positions of husband and wife and therefore, each may subject their rights to levy or creditors.

Discussion. The court discussed the four separate approaches to tenancy by the entirety by the 19 states that at the time still recognized the estate and their respective approaches after the passing Married Women’s Property Acts. The discussion focused on what approach Hawaii would take.