## Facts

- Theodore P. Phillips and Charles and Christina Nyhus had an ongoing business relationship involving real estate investments.
- Phillips and Charles Nyhus signed a written agreement making Phillips a silent partner in certain property purchases, with profits to be divided equally after sale.
- Phillips initially purchased the Salt Creek property in his own name.
- The parties later executed an addendum under which Phillips would convey one-half interests in listed properties (including Salt Creek) and would transfer his remaining interests in those properties to Nyhus upon Phillips’s death.
- Phillips executed a quitclaim deed conveying the Salt Creek property to himself and the Nyhuses, expressly stating the grantees intended to hold “as joint tenants with right of survivorship and not as tenants in common.”
- Phillips and the Nyhuses later executed an earnest money agreement to sell the Salt Creek property to third-party buyers; the agreement did not address the form of title or how proceeds would be divided.
- Phillips died before closing; the sale closed after his death.
- The Nyhuses claimed all sale proceeds as surviving joint tenants; Phillips’s estate claimed the sale contract severed the joint tenancy and entitled the estate to one-half of the proceeds.

## Issues

1. Whether executing an earnest money agreement to sell real property held in joint tenancy with right of survivorship severs the joint tenancy and converts it to a tenancy in common.
2. Whether equitable conversion applies to treat the sellers’ interest as personalty upon contract execution in a manner that severs a joint tenancy.
3. Whether, absent express language, a sale contract evidences intent to terminate survivorship rights and allocate proceeds to the decedent’s estate.

## Decision

- The Washington Supreme Court affirmed summary judgment for Charles and Christina Nyhus.
- The earnest money agreement did not sever the joint tenancy or convert it into a tenancy in common.
- Washington does not apply equitable conversion as an automatic rule that severs a joint tenancy upon execution of a contract for sale.
- Because the joint tenancy remained intact at Phillips’s death, survivorship operated to vest full ownership in the Nyhuses, entitling them to all sale proceeds.

## Legal Principles

- In Washington, creation and continuation of a joint tenancy with right of survivorship depends on clearly expressed intent, and an explicit survivorship deed is not lightly treated as altered by later agreements that are silent on title.
- A contract to sell jointly held property, without language changing the form of title or allocating proceeds in a manner inconsistent with survivorship, does not by itself sever a joint tenancy.
- Equitable conversion is not recognized as a general doctrine that, upon contract execution, converts joint tenants’ real property interests into personalty so as to sever survivorship rights.
- If a joint tenancy is not severed before a joint tenant’s death, the decedent’s interest is extinguished and full title vests in the surviving joint tenant(s) by operation of survivorship, carrying entitlement to proceeds from a post-death closing.

## Conclusion

The court held that a sale contract that does not address title or proceeds allocation does not sever an expressly created joint tenancy, and survivorship therefore gives the surviving joint tenants the entire interest and all sale proceeds when a joint tenant dies before closing.


Estate of Phillips v. Nyhus, 124 Wash. 2d 80, 874 P.2d 154 (Wash. 1994)