105 Ill. 2d 215, 85 Ill. Dec. 331, 473 N.E.2d 930 (Ill. 1984)
Harms v. Sprague is a leading Illinois Supreme Court decision clarifying the effect of a unilateral mortgage by one joint tenant on both the character of the estate and the survivorship rights of the cotenant.
1) In a lien-theory jurisdiction, does the execution of a mortgage by one joint tenant on his undivided interest sever the joint tenancy? 2) If not severed, does the mortgage remain a lien on the property after the mortgagor joint tenant's death so as to encumber the surviving joint tenant's title?
In a lien-theory state, a mortgage creates only a lien on the mortgagor's interest and does not transfer legal title; therefore, a unilateral mortgage by one joint tenant does not sever the joint tenancy because it does not destroy any of the four unities (time, title, interest, possession). Upon the mortgagor joint tenant's death, the survivor's right of survivorship vests in the entire estate; because the decedent's separable interest is extinguished at death, any mortgage lien that attached solely to that interest does not survive to burden the survivor's title. A joint tenant's will cannot devise the joint tenancy interest because the interest passes by survivorship at death.
No. The mortgage executed by William Harms on his undivided joint tenancy interest did not sever the joint tenancy. Further, upon William's death, the joint tenancy's right of survivorship operated to vest full title in John Harms, and the mortgage lien—having attached only to William's extinguished interest—did not survive to encumber John's title. The attempted testamentary disposition of the joint tenancy interest was ineffective.
Harms v. Sprague is a cornerstone joint tenancy case that: (1) illustrates how the lien-versus-title theory of mortgages directly affects severance analysis; (2) reinforces that survivorship trumps an encumbrance tied solely to a deceased joint tenant's interest; and (3) cautions lenders about the hazards of taking security from fewer than all joint tenants. It is frequently taught in Property to test understanding of the four unities, the mechanics of severance, and the interaction between nonprobate transfers and creditor rights. The case also provides a practical framework for advising clients about financing arrangements and estate planning in co-ownership contexts.