Butcher v. Beatty, No. 09-1169.
Thelma and John Healy were married in 1979. In 2006, a trial court found that Thelma was incapacitated and appointed Troy Butcher as guardian of Thelma’s person and Butcher and John as co-guardians of her estate. Butcher later filed a motion to sell the couple’s rental property held as tenants by the entirety, and the trial court that the real property be sold and the proceeds divided between Thelma and John. The rental property could not be sold for the appraised value, so the trial court ordered Thelma to pay John $40,000 for sole ownership of the property. A deed to that effect was drafted and signed by Butcher as Thelma’s guardian. Before John could sign the deed, he passed away.
Believing that John’s death vested sole title to the rental property in Thelma, Butcher refused to pay the $40,000 to Diane Beatty, executor of John’s estate. Beatty sued Butcher to compel specific performance of the agreement, and the trial court agreed, ordering Butcher to pay John’s estate $40,000. Butcher appealed to the Arkansas Court of Appeals, who affirmed the trial court’s decision. Butcher then requested review of the decision by the Arkansas Supreme Court, and the court accepted the case for review.
The court noted that, at the time of John’s death, Thelma and John held the rental property as tenants by the entirety. As such neither spouse owned an undivided one-half interest in the property, and both owned the entire estate with the right of survivorship. This right of survivorship to the whole could be dissolved only by (1) a divorce proceeding, (2) death, (3) voluntary action of both parties. Because John had not executed the deed prior to his death, it was not fully executed and delivered; therefore, the rental property was held by Thelma and John as husband and wife, and she became sole owner upon his death.
The court further explained that specific performance is not available if performance is impossible. Upon John’s death, his estate no longer had any interest in the rental property from which to compel Butcher to perform under the previous agreement.
The court then remanded the case for further proceedings.
