In California, a joint tenancy deed controls who owns a property unless the co-owners prove they both understood the ownership to be something else. In Machado v. Machado (1962) 58 Cal.2d 501, 506, the California Supreme Court held that the presumption created by a joint tenancy deed “cannot be overcome by testimony of the hidden intentions of one of the parties, but only by evidence tending to prove a common understanding or an agreement that the character of the property was to be other than joint tenancy.” One owner’s private plan, or private regret, does not change the deed.
This comes up when a parent says they never meant to give a child half the house, when an ex-partner says they paid more of the down payment, or when a sibling wants to take another owner off title. Our guide to Evidence Code section 662 covers the general rule that the person on the deed is presumed to own the property. This post covers the Supreme Court decision that most California courts quote when the deed says joint tenancy.
Why Machado v. Machado Matters
- A joint tenancy deed creates a presumption of joint tenancy. The deed “is not conclusive,” but it “creates a rebuttable presumption” that the property is held as joint tenants. (Machado, at p. 506.)
- One owner’s secret intent does not overcome it. Only evidence of a common understanding or an agreement between the owners can. (Machado, at p. 506.) Under today’s Evidence Code section 662, that proof must also be clear and convincing.
- Even both owners’ testimony was not enough. Each spouse testified that they did not intend a joint tenancy, but neither showed that they had agreed on something else, so the deed stood. (Machado, at pp. 505–506.)
- A court could not give one joint tenant exclusive possession. The trial court had no power to award the wife exclusive possession of the joint tenancy house, apart from temporary orders while the divorce was pending. (Machado, at p. 507.)
- An owner who empties a joint account must account for half. The husband withdrew the couple’s joint savings account after they separated, and the Supreme Court held he had to account for half of it. (Machado, at pp. 506–507.)
The Facts: A Dairy Farm, a Family Home, and a Deed Nobody Remembered Asking For
Mary and John Machado married in June 1950 and separated in March 1959. When they married, John owned three parcels of ranch land, farm equipment, cattle, and a $40,000 savings account. During the marriage, he ran farming and dairy operations on the land, and all of the income went into a single bank account. That account paid for the family home, the furniture, a 1959 Oldsmobile, and more equipment and cattle. (See Machado, at p. 505.)
The deed to the family home was in joint tenancy, and the couple also had an $8,500 joint savings and loan account. In the divorce, the trial court found that both were joint tenancy property. Both spouses appealed that finding. Each said they never intended a joint tenancy, and each testified that they had not told the bank to put the deed in joint tenancy. Mary said she signed papers at the bank when John told her to. John said he signed at a different time, did not see Mary’s name on the deed, and did not intend to give her an interest in the house. (Machado, at pp. 505–506.)
The case was decided by the California Supreme Court in San Francisco, in an opinion by Justice Roger Traynor.
How the California Supreme Court Decided the Case
The Deed Creates a Presumption
The court started with the deed. A joint tenancy deed does not settle ownership forever, but it puts the burden on the owner who wants to change it:
“Although a joint tenancy deed is not conclusive as to the character of real property, it creates a rebuttable presumption that it is held in joint tenancy.”
Machado v. Machado (1962) 58 Cal.2d 501, 506
Hidden Intentions Do Not Count
The court then explained what it takes to overcome that presumption:
“The presumption created by the deed cannot be overcome by testimony of the hidden intentions of one of the parties, but only by evidence tending to prove a common understanding or an agreement that the character of the property was to be other than joint tenancy.”
Machado v. Machado (1962) 58 Cal.2d 501, 506
Mary and John each described only what they themselves intended. Neither offered evidence that the two of them had agreed on anything other than joint tenancy. “Since there was no evidence of a common understanding or an agreement the presumption was not overcome.” (Machado, at p. 506, citing Gudelj v. Gudelj (1953) 41 Cal.2d 202, 212–213.)
That is the line later cases draw. In Cosler v. Norwood and Kershman v. Kershman, joint tenants ended up with unequal shares because the evidence showed they had agreed their shares would follow what each paid. In Demetris v. Demetris, a joint tenancy created by mistake was undone. In Machado, there was no such agreement, so the deed stood.
Joint Accounts Follow a Looser Rule
The savings and loan account was different. Under the statute then in effect, a joint account also created a presumption of joint tenancy, but that presumption could be overcome by proof that the owner of the funds did not intend a true joint tenancy when making the deposit. Whether it was overcome was a question of fact for the trial court, which found the account was joint. (Machado, at p. 506.)
Right after the separation, John withdrew all of the money without Mary’s consent and offered no evidence of where it went. The Supreme Court held that the judgment should have required him to account for half of the account’s balance when it was closed. (Machado, at pp. 506–507.) Between co-owners outside of a divorce, the same kind of claim is settled in the partition accounting.
No Exclusive Possession of Joint Tenancy Property
The trial court had also given Mary exclusive possession of the joint tenancy home until further order. Both sides agreed that was wrong. A divorce court could not award the wife exclusive possession of property the spouses held as joint tenants, except through temporary orders excluding a spouse from the home until the case was decided. (Machado, at p. 507.) That fits the general rule that joint tenants share possession of the whole property, which is why you cannot evict a co-owner.
The Result
The Supreme Court affirmed the rulings that the family home and the savings and loan account were held in joint tenancy. It reversed the exclusive-possession order and the ruling that all of the farm income and the property bought with it were John’s separate property, because part of that income came from John’s work during the marriage. (Machado, at pp. 505, 507–508.)
The Machado Rule Today
More than 60 years later, the rule has not changed. In In re Marriage of Brooks & Robinson (2008) 169 Cal.App.4th 176, the Court of Appeal held that the form-of-title presumption “can be overcome only by evidence of an agreement or understanding between the parties that the title reflected in the deed is not what the parties intended.” (Brooks & Robinson, at p. 189.) It added that the presumption “cannot be overcome solely by tracing the funds used to purchase the property, nor by testimony of an intention not disclosed to the grantee at the time of the execution of the conveyance.” (Id. at p. 190, quoting In re Marriage of Broderick (1989) 209 Cal.App.3d 489, 496.) That is Machado‘s hidden-intentions rule in modern words, and Brooks & Robinson cited Gudelj v. Gudelj, the same Supreme Court decision Machado relied on.
Brooks & Robinson also shows how far the rule reaches. A husband paid the down payment on a San Bernardino home, but on their real estate agent’s advice the couple took title in the wife’s name alone to make financing easier. When she later sold the house, he could not undo the sale. The court added that the presumption cannot be rebutted by evidence that title was taken a certain way merely to obtain a loan. (Brooks & Robinson, at pp. 180, 190.) And under Evidence Code section 662, the shared agreement must be proven by clear and convincing evidence. (Id. at p. 185.)
The rule applies outside marriage too. In Carne v. Worthington (2016) 246 Cal.App.4th 548, 556, a dispute over a late father’s house and his trust, the Court of Appeal quoted Brooks & Robinson for the rule that a deed is presumed to reflect the actual ownership of the property.
Between spouses, the law has moved. In In re Marriage of Valli (2014) 58 Cal.4th 1396, the California Supreme Court held that a spouse who buys property from a third party during the marriage must still meet the Family Code’s transmutation requirements to make it separate property, and it found Brooks & Robinson unpersuasive to the extent it said otherwise. Three justices wrote separately that Evidence Code section 662 should play no role in property disputes between spouses. At divorce, Family Code section 2581 also presumes that property a married couple acquired in joint form, including joint tenancy, is community property. So married couples’ disputes go to family court under the Family Code. For everyone else, including unmarried partners, parents and children, siblings who inherited a house, and friends who bought together, the Machado rule decides who owns what, and the remedy is a partition action.
What Machado v. Machado Means for California Co-Owners
- Start with the deed. How title is held is the starting point for every ownership dispute. Our guide to joint tenancy vs. tenancy in common explains the difference.
- “I never meant to put them on title” is not enough. A co-owner who wants a bigger share than the deed shows needs evidence that both owners agreed to it, not just their own intentions. See our guide to a joint tenancy with a parent.
- Proof of an agreement can change the shares. Emails, texts, loan papers, and testimony showing a shared understanding are what courts look for. Our guide to what a co-owner should gather for a partition covers the records to collect.
- Your co-owner cannot have the property to themselves. Every joint tenant shares possession, and a co-owner who shuts you out may owe you for it. See our guide to ouster.
- Money taken from joint funds gets accounted for. Withdrawals, unpaid rent, and payments by each owner are settled in the partition offsets and accounting.
Dispute Over Who Owns What? Settle It in the Partition
A fight over ownership shares does not have to be a separate lawsuit. In a partition action, the court decides each co-owner’s share and then orders the property sold, as the Supreme Court did in De Uprey v. De Uprey. Any co-owner can file, and the deed is where the court starts.
Talkov Law can help. With 12 full-time partition attorneys and experience in over 650 partition actions throughout California, our team handles every step, from the complaint through the partition sale and the final distribution of proceeds. Call (877) PARTITION (727-8484) today or contact us online to get started.
