Case ID: wis_28/html/0604-01.html
Source: Caselaw Access Project
Author: {"author": "Cole, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John vs. Larson.
    (1, 2) Rotice of defendant’s rights to land. (3) Assignee restricted to assignor's rights.
    
    
      1. M. mortgaged to W., land of wMcIl defendant was in possession, as security for tlie payment to W. of his fees as attorney-at-law in an action which he was to bring for M. against defendant to recover possession of the land. Reid, that these facts conclusively charge W. with notice of any rights which defendant had in the land.
    2. On foreclosure of said mortgage, the land was sold to plaintiff, defendant being present claiming to own the land, and forbidding the sale, with the knowledge of plaintiff. Reid, that plaintiff took subject to defendant’s rights.
    3. This court having held that the agreement between M. and defendant, by which the latter obtained possession of the land, was champertous and void, but that, after the same was executed, it would not aid M. (who was in pari delicto with defendant) to regain possession (19 Wis., 463), it must now refuse similar aid to the plaintiff, who has merely succeeded to M.'s rights, with notice of the defect in his title.
    
      APPEAL from tbe Circuit Court for Winnebago County.
    ■ Ejectment, for tíre east balf of tbe west balf of a quarter section of land. Complaint in tbe usual form. Answer, 1. A general denial. 2. Tbat on tbe 16th of January, 1863, one Miller executed and delivered to one Weisbrod, a mortgage on tbe west balf of said quarter section, to secure payment of bis promissory note to said Weisbrod, of same date, for $335 ; tbat defendant then was, and bas ever since been, in possession of tbe east balf of said mortgaged premises (viz: of tbe premises described in tbe complaint), and tbat be bas made permanent improvements thereon, in good faith, to tbe value of $1,000; tbat tbe consideration of said note and mortgage, or a part thereof, consisted of services to be rendered by tbe mortgagee, or tbe firm of which be was a member, in an action to be brought by Miller against tbe defendant for tbe same cause of action set forth in tbe complaint herein; tbat on or about April 16, 1863, said action by Miller against this defendant was commenced in said court, and was tried at tbe September term thereof, 1864, and judgment was therein entered for tbe defendant; tbat tbe mortgage aforesaid was foreclosed by an action in said court, and a judgment of foreclosure and sale rendered therein at tbe March term, 1868; tbat this defendant was not made a party to said foreclosure action; tbat tbe sheriff of said county advertised tbe whole of said west balf of said quarter section of land for sale, under said judgment; tbat at tbe time and place of such sale, this defendant forbade tbe sheriff selling or offering tbe premises described in tbe complaint herein, and notified all persons then and there present, and especially tbe plaintiff herein, of bis possession and claim to said premises ; that this defendant then and there offered to bid and pay tbe whole amount of said judgment and costs and expenses of sale, for tbe west balf of said west balf of said quarter section, but tbe sheriff, by tbe direction of said Weisbrod, refused to offer tbe same for sale, and offered first for sale tbe premises described in tbe complaint herein; tbat plaintiff bid therefor tbe whole amount of said judgment, costs and expenses, and tbe premises were struck off to him; that plaintiff claims said premises under and bj virtue of this sale and of a sheriff’s deed executed to him in pursuance thereof; and that said purchase was made by plaintiff at the request, with the money, and for the use, of said Miller.
    As a third defense, the defendant sets up the facts, fully recited in Miller v. Larson, 19 Wis., 468, as to a certain contract between himself and Miller (fully executed on defendant’s part), under which he had taken and retained possession of the land in dispute; and he alleges that the plaintiff herein, at the time of the purchase at the foreclosure sale above mentioned, had full notice of his rights and equities under said contract and possession.
    On the trial, plaintiff put in evidence a sheriff’s deed to him of the land in question, under a sale upon foreclosure of a mortgage in a suit wherein Agnes Whittemore was plaintiff and said Miller and wife were defendants. There was nothing in the deed to show that this was the mortgage executed to Weis-brod, above mentioned; but the language of the court, recited in another part of the bill of exceptions, clearly assumes that it was the same mortgage. Plaintiff also proved the value of the use and occupation of the premises. The court refused to receive any evidence under the second and third defenses, unless coupled with evidence that the purchase upon the foreclosure sale to plaintiff was made with the money and for the use and benefit of Miller; and no evidence of that kind being offered, the jury, under the direction of the court, found a verdict for the plaintiff, and judgment was entered thereon. The defandant appealed from the judgment.
    
      Geo. W. Burnell (with Geo. Gary, of counsel), for appellant,
    argued that defendant’s possession at the time of the execution of the Weisbrod mortgage, was notice to the mortgagee and to all the world of his rights (7 Wis., 293; 14 id., 468; 18 id., 510), and the judgment in Miller v. Larson, 19 Wis., 463, is conclusive as against the plaintiff (a privy in estate with Miller) that Miller had no mortgageable interest in the land which he could assert at that time (11 Ohio, 478); that defendant’s rights were, not affected by the foreclosure suit, to which he was not a party (7 Wis., 263 ; 11 id., 454; 10 id., 303); that even if defendant’s possession was not notice of his rights, the judgment in Miller v. Larson had the effect at least of placing Larson, at the time of the foreclosure sale, in the position of a purchaser, subsequent to the mortgage, of a part of the premises, and as such he was entitled to have that portion of the premises still owned by Miller first sold (14 Wis., 559; 15 id., 314); that the plaintiff herein, by thrusting himself in to purchase this litigation against the protest of the defendant, with full notice of the facts, was as obnoxious to the charge of champerty as Miller himself (2 Johns. Cas., 58, 417; 6 Mass., 421; 7 id., 78; 11 id., 550; 2 Paige, 289 ; 2 Caines’ Cas., 147); and that the facts set up in the third defense showed a good defense, because a cham-pertous agreement executed is as valid as any other (19 Wis., 467; 4 Kent’s Com.. *448), and a purchaser mala fide acquires no more rights than his grantor had.
    
      Fellcer & Weisbrod, for respondent,
    argued that nothing was shown at the trial to defeat plaintiff’s title under the sheriff’s deed in the suit of Agnes Whittemore against Miller and wife, since there was no averment in the answer, and no proof offered to connect Agnes Whittemore in any way with the defense set up in the answer. •
   Cole, J.

Some question is made as to the origin of plaintiff’s title. It is said by his counsel that the sheriff’s deed under which he claims was executed in a foreclosure suit wherein Agnes Whittemore was plaintiff and Miller and wife were defendants, and that there is no averment or offer of proof, which in any manner connected the matter set forth in the answer with the Whittemore mortgage. We presume the fact was that Mrs. Whittemore was the assignee of the Weisbrod mortgage, for tbe answer states that tbe plaintiff purchased at tbe foreclosure sale made under that mortgage, and claims tbe premises by virtue of that sale, and of tbe sheriff’s deed made in pursuance thereof. It is very obvious that tbe cause was tried upon tbe assumption on both sides that tbe plaintiff claimed tbe premises under tbe foreclosure and sale upon tbe Weisbrod mortgage/and that this was tbe foundation of bis title. We shall therefore consider tbe case in that light. Do, then, tbe matters set up in tbe answer constitute a defense to tbe action ? Tbe plaintiff objected to any evidence under tbe answer, for tbe reason that tbe facts therein set forth did not constitute any defense ; and tbe court held that all evidence must be excluded, unless tbe defendant was able to prove that tbe purchase under tbe foreclosure sale by tbe plaintiff was at tbe request and for tbe use and benefit of Miller, tbe mortgagor.

According to our view, it is quite immaterial whether tbe plaintiff purchased at tbe foreclosure sale for tbe benefit of Miller or not, for be was affected with notice of tbe defendant’s lights, whatever they were. Eor, in tbe first place, it appears from tbe answer — which for tbe purposes of this case we must assume to be true — that when tbe Weisbrod mortgage was executed by Miller, tbe defendant was in tbe actual possession of tbe premises in controversy, and bad been since 1858, and bad made valuable improvements upon them. Upon principles perfectly familiar and well settled, Weisbrod was then chargeable with notice of this possession, and was bound to ascertain by what right tbe defendant held and occupied tbe premises. Tbe correctness of this proposition is too obvious to require tbe citation of authorities in its support.

But, besides tbe presumption of notice arising from possession, there is another circumstance which shows conclusively that tbe mortgagee was apprised of tbe defendant’s claim to tbe premises, and that is this: Tbe mortgage was given to Weisbrod for services to be rendered by him as attorney in bringing an action in tbe name of Miller against tbe defendant for tbe recovery of these premises. What circumstance can be imagined better calculated to charge Weisbrod with actual notice of the adverse claim of the defendant, than to be employed to prosecute a suit to test the validity of this very claim? He must therefore be held to be chargeable with notice of the most conclusive character, of the rights of the defendant in the property when the mortgage was executed. And at the time of sale, it amo appears, the defendant was present, and forbade the sheriff selling the land, and notified all persons, especially the plaintiff, of his claim to and possession of the premises. The plaintiff consequently purchased with full knowledge of the defendant's rights.

What, then, are those rights under the agreement set up in the answer? We had. occasion to consider that question in the case of Miller v. Larson, reported in 19 Wis. R., 463. That was an action brought by Miller against this same defendant to recover possession of the premises in controversy. To defeat a recovery, the defendant set up and relied upon the agreement contained in the third defense in the present answer. And while this agreement was there held to be champertous in its character, still it was determined that it had been so far executed that a court of justice would not interfere to deprive the defendant of the possession of the property acquired under it. The contract, though unlawful, yet having been executed, and the parties to it being in pari delicto, the law would leave them as they were, affording a remedy to neither. And the question is, Will the law be any more active in aiding a party to obtain the possession who stands in Miller’s' shoes, who has merely succeeded to his rights, and who has no superior equities in the-property ? If the court will aid a party thus situated, upom what principle does it' proceed ? For it is manifest that the-plaintiff is a privy in estate to Miller, and is affected with notice of the defect in his title. Ordinarily the rights of the mortgagee in the property are no greater nor more perfect than those-of the mortgagor. In the language of a learned writer, “ The; rule wbicb limits tbe right of tbe buyer by that of tbe seller, and subjects tbe title of tbe one to every drawback or defect wbicb attached to that of tbe other, is the general rule, both of law and of reason.” Note to Basset v. Nosworthy, 2 Leading Cases in Equity, p. 80. What is there in tbe circumstances of this case wbicb makes it an exception to this general rule? We really know of nothing, and no satisfactory reason has been given, why tbe plaintiff has a stronger claim to deprive tbe defendant of tbe possession than tbe mortgagor to whose rights be has succeeded.

It is indeed suggested in tbe brief of plaintiff’s counsel, that while Miller could not recover tbe property from tbe defendant on account of bis participation in tbe cbampertous agreement, yet this was a personal disability, wbicb did not taint tbe mortgage, nor affect tbe purchaser at tbe foreclosure sale. If this were so, then it is obvious that tbe policy of the law wbicb condemns champerty might be easily avoided. For, as remarked by tbe defendant’s counsel, A. has only to make a cbampertous contract with B., and tbe latter having fully performed and A. reaped tbe full benefit of tbe agreement, be may then assign to C., who can strip B. of all that be has acquired by bis labor and money. In this way tbe assignee would escape tbe full consequences wbicb tbe law denounces against tbe unlawful agreement. Now Miller bad no rights in these premises wbicb tbe court would enforce; and tbe plaintiff, who is affected with notice, stands in tbe same situation. Tbe facts wbicb constituted a good and valid defense against tbe party under whom be claims, are equally conclusive against him.

It follows from these views that tbe judgment of tbe circuit court must be reversed, and a new trial ordered.

By the Court. — So ordered.