Coraccio v. Lowell Five Cents Sav. Bank

415 Mass. 145, 612 N.E.2d 650 (1993)



Mass. Gen. Laws ch. 209, § 1does not alter the characteristics of the estate itself. Merely because each spouse is equally entitled to the rents, products, income or profits and to the control, management, and possession of property held by them as tenants by the entirety, it does not follow that each has an equal one-half interest in the property. On the contrary, a tenancy by the entirety remains a unitary title, and the statute simply guarantees each spouse an equal right to the whole. Whatever the husband could do at common law, the wife now may do as well. Each spouse continues to have a indestructible right of survivorship, and the estate remains inseverable and not subject to voluntary partition. Nor, by virtue of Mass. Gen. Laws ch. 209, § 1, may a creditor of either seize the principal residence absent the joint signature of the spouses.


Plaintiff held property with her husband as tenants by the entirety. They granted a first mortgage on the property to defendant. Later, husband took a second mortgage on the property without plaintiff's knowledge. The husband defaulted, defendant foreclosed, and plaintiff sued for declaratory relief and damages. One of the causes of action is for breach of the implied covenant of good faith and fair dealing. Plaintiff also contend that the second mortgage was without her consent. The superior court dismissed the case on defendant's motion, plaintiff appealed, and the court transferred the case on its own initiative.


Is the second mortgage on property, signed only by the husband, who owned with the wife as tenants by the entirety valid even without the consent of the wife?




The court affirmed the dismissal because defendant was not negligent, the claim alleging breach of the covenant of good faith and fair dealing lacked merit.  This covenant, implicit in all contracts, prohibits parties from doing "anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract." The facts did not show violations of Mass. Gen. Laws ch. 93A, § 2. The court modified the superior court's judgment, however, because Mass. Gen. Laws ch. 209, § 1 did not prohibit a husband from encumbering his interest in the property held as a tenancy by the entirety. 

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