Case ID: wis_30/html/0283-01.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

Weber and others, Executors, vs. Zeimet and others.
    School Lands. Mortgage — Effect of Gonveycmee subject to Mortgage.
    
    1. A mortgage of school lands by one who holds merely a certificate of sale thereof, is cut off by a subsequent sale of the land by the state, for non-payment of interest to a third party, who purchases in good faith for his own benefit.
    2. If the mortgagor afterwards acquires the title from such purchaser, it seems that the lien of the mortgage does not re-attach.
    3. In this case, the mortgagor’s certificates of the first sale of the said school land, having been held as a security, when the mortgage was executed, by the person who purchased the land at the re-sale, after forfeiture, and defendants having taken title to the other lands, covered by the mortgage, under a covenant to pay the mortgage debt;, they had no equity to have such school land charged with a part of such debt.
    4. Where mortgaged lands are conveyed subject to the mortgage, the grantees (and all claiming under them) undertake that the land shall be the primary fund for the payment of such debt; and a subsequent recon-veyance of apcvrt of said lands to the mortgagor, does not relieve the remainder from their equal liability for such debt.
    5. The fact of such subsequent conveyance to the mortgagor does not give the tract thus conveyed the same place in the order of alienation of the mortgaged premises which it would have had, had it never been conveyed by him, nor does it create an equity in favor of the purchasers of the other tracts, to have that particular tract first applied in payment of the mortgage.
    APPEAL from tbe Circuit Court for Dane County.
    This case was once before tbis court on appeal from an order fixing tbe terms upon wbicb tbe defendants, Zeimet, Knapp and Brereton, should be allowed to answer, and set up a defense of usury after default. Weber v. Zeimet, unreported. In accord-anee with, the decision of this court, in remanding the canse to the circuit court, an order of reference was had to take testimony and report the order of alienation of the mortgaged premises, the relative value of the premises purchased hy each defendant, as compared with the whole, the terms of the deeds under which each defendant claimed, and the amount which each defendant should deposit in accordance with the decision of this court, as a condition of filing the proposed answer. The referee found that lot 12, on section 16, school land, was sold January 27, 1854, to Solomon Rape, who assigned-the certificate of sale to A. 0. King, the mortgagor mentioned in the complaint. The purchase money not being entirely paid, the land was forfeited for non-payment of interest, and was sold hy the state, at a sale of forfeited lands, December 10, 1862, to one J. D. Staring,. King purchased the certificate of sale of Staring, which was duly assigned to him. King then pledged the certificate to the defendant Nolton, as security for money owing to Nolton. King afterward executed a quitclaim deed of said lot 12 to H. H. Brereton, in March, 1869.
    On the 25th of January, 1858, King conveyed the south half of the south-west quarter of section 15, mentioned in the complaint, to Staring, subject to the mortgage then on the same, which mortgage is now in suit in this action. On the 2d of April, 1861, Staring and wife conveyed the last mentioned premises to Mary E. King, who, on the 25th of January, 1869, conveyed to the defendant, Michael Zeimet.
    
    On the 2d of January, 1858, the mortgagor, A. C. King, conveyed to one Alpheus King the south-east quarter of the northwest quarter, and the north-east quarter of the south-west quarter of said section 15, subject to the payfnent of the mortgage then on said premises and now in suit here. On the first of May, 1868, Alpheus King and wife conveyed the said southeast quarter of the north-west quarter of said section 15, to the defendants Knapp and Brereton, and on the same day Mary E. King executed to the same defendants a deed of the same premises. This last described forty acres is tbat claimed by tbe defendants Knapp and Brereton.
    
    On tbe first day of May, 1868, Alpbeus King and wife conveyed to A. C. King, tbe nortb-east quarter of tbe south-west quarter of said section 15; and on tbe 25tb of January, 1869, A. C. King and wife conveyed tbe same to tbe defendant Michael Zeimet, wbo on tbe 23d of September, 1869, conveyed tbe same to tbe defendant Nolton, wbo now claims to own it.
    Tbe referee found tbe entire value of tbe mortgaged premises described in tbe complaint to be $6,375, and tbe value of tbe premises exclusive of tbe school land forty, known as lot 12, to be $5,800; tbat tbe defendant Michael Zeimet should deposit as a condition of answering tbe sum of $1,667, and tbe defendants Knapp and Brereton tbe sum of $677.12, and tbat tbe costs of tbe reference should be divided between them in tbe same proportion. To this report defendants Zeimet, Knapp and Brereton objected, on tbe ground tbat lot 12 was properly chargeable with its portion of tbe mortgage debt, and tbat tbe value of tbe forty acres owned by Nolton should be deducted from tbe mortgage debt, and tbe other three forty acre tracts should then contribute ratably according to their respective valuations. Tbe report of tbe referee being confirmed by order of tbe circuit court, and tbe terms upon which defendants should be permitted to answer, being fixed in accordance with said report, defendants appealed.
    
      Carpenter & Chase, for appellants.
    
      iS. TJ. Pinney, for respondent.
   Cole, J.

Tbe order in this case is objected to on two grounds: 1st, it is insisted tbat lot 12, on section 16, is justly and equitably chargeable with its portion of tbe mortgage debt; and 2d, tbat tbe value of tbe forty acre tract now owned by tbe defendant Nolton, should first be deducted from tbe mortgage debt, and tbat tbe other three forties should contribute ratably, according to their respective values only, to tbe payment of tRe remainder of tRe debt after sncR deduction is made.

Lot 12, known as tRe scRool land forty, was included in tRe mortgage sougRt to be foreclosed wRen executed by Augustus C. King to Peter Weber, Dec. 31,1855. But at tRis time tRe mortgagor, King, only owned tRe certificate of sale given by tRe scRool land commissioners. He Rad not tRe title. In Dec., 1862, it appears tRat tRis land was forfeited to tRe state for tRe non-payment of interest, and was sold by tRe commissioners at a sale of forfeited scRool lands, to one J. D. Staring. TRis forfeiture and sale cut off tRe lien created by tRe mortgage. About tRis there is and can be no controversy. It is claimed by tRe attorneys of tRe plaintiff, tRat by tRe forfeiture and sale of tRis scRool land forty, tRe lien of tRe Weber mortgage was defeated as absolutely and completely as tkougR it Rad been cut off by tRe foreclosure of a prior mortgage on tRat portion of tRe mortgaged premises in an action to wRicR tRe bolder of tRe Weber mortgage was a party, and tRis position is undoubtedly sound. Under tRe statute, tRis unquestionably was tRe legal effect of tRe sale made by tRe commissioners to Staring in 1862. But-it further appears that the mortgagor, King, afterwards purchased the certificate issued by the commissioners to Staring, .paying therefor the sum of $200. And in consequence of this re-purchase, it is now claimed by the defendants that the Weber mortgage again attached to and became a lien upon that forty, the same as though it Rad never been cut off by the forfeiture and sale, and that it should contribute to its payment the same as the other three tracts, which are owned by Ziemet, and by Knapp and Brereton. We fail to understand upon what principle this position can be sustained. There is really no ground for saying that Staring purchased this forty at the scRool land sale for the benefit of King. It must be assumed that Re purchased it for himself, and that Re took the land discharged of the mortgage. And this being the case, we suppose King might acquire that interest, whatever it was, without subjecting the property again to the lien of the mortgage. TRe interest which be acquired was a new and independent one. At all events, we cannot see bow, upon tbe facts of tbis case, tbat tbe xe-pnrcbase by King can be said to bave revived any equities in favor of tbe defendants, wbo bave appealed from tbe order of tbe circuit court. For it appears from tbe evidence tbat before tbe conveyances from King and wife to tbe defendant, Zeimet, tbe school land certificate bad been placed in tbe bands of Nolton as collateral security for tbe payment of a mortgage given bim by King. And further tbat by tbe terms of tbe conveyances through which these defendants derive title to tbe lands upon section 15, they were expressly charged with tbe payment of tbe mortgage in suit. It seems to us tbat this is all it is necessary to say in answer to tbe objection tbat lot 12 in section 16 was erroneously excluded by tbe referee when ascertaining tbe value of tbe mortgaged premises. Was be right in bolding tbat tbe northeast quarter of tbe southeast quarter of section 15, owned by tbe defendant Nolton should only contribute in tbe same proportion as tbe other three forties in tbat section? Tbis view of tbe referee as to tbe liability of tbat tract is quite as favorable for tbe appellants as tbe facts of tbe case would warrant For it appears tbat on January 2, 1858, Augustus C. King deeded to Staring two of those forties subject to tbe mortgage, and on tbe same day conveyed to Alpbeus King tbe other two forties subject to tbe same incumbrance. Tbe two forties conveyed to Staring were afterwards conveyed by bim to Mary E. King, and by her conveyed to Zeimet, January 25, 1869. Alpbeus King conveyed by warranty deed one forty to tbe defendants Knapp and Brereton, May 1,1868., and on tbe same day conveyed tbe other forty back to Augustus C. King, wbo subsequently conveyed it to Zeimet. Tbis tract being tbe northeast quarter of tbe southwest quarter, was after-wards conveyed by quit claim by Zeimet and wife to tbe defendant Nolton, in satisfaction of a mortgage at tbe time on tbat tract and other lands.'

Now, we suppose tbe law is well settled tbat tbe mortgagor, Augustus C. King, by thus conveying these lands to Staring and Alpheus King, subject to the mortgage tlien existing upon them, constituted those lands the primary fund for the payment of the mortgage debt. Jumel vs. Jumel, 7 Paige 591; Hartley vs. Harrison, 24 N. Y., 170; Freeman vs. Auld, 44 N. Y., 50; Townsend vs. Ward, 27 Conn., 610. And as this equitable right to resort to the land as the primary fund for the payment of the mortgage debt appeared upon the face of the deeds through which the appellants obtained their titles,they are chargeable with notice of that equitable right, equally as if the deeds to them had in terms disclosed that they were to take the premises subject to the payment of that mortgage. Jumel vs. Jumel. The mortgagor in this case conveyed the lands subject to the mortgage, in other words he only conveyed the equity of redemption. In Thompson vs. Thompson, 4 Ohio, S. R. 333, the doctrine is said to be well settled “ that the purchaser of an incumbered estate, if he agree to take it subject to the incum-brance and an abatement is made in the price on that account, is bound to indemnify his grantor against the incumbrance, whether he expressly promise to do so or not; a promise to that effect being implied from the nature of the transaction,” p. 349. And we suppose the fair presumption m the present case is that the amount of the mortgage debt was deducted from the purchase price, with the understanding that the grantees would discharge that debt. The arrangement was only a mode of paying so much of the consideration, and the parties evidently intended to make the land the primary fund for the discharge of the mortgage. It is therefore entirely consistent with equitable principles that it should be so applied. Nor can we see that the mere fact that one forty was afterwards re-conveyed to the mortgagor, in any way changes or affects this original transaction and the liability of the premises to the payment of the mortgage debt. For when he originally conveyed the premises, expressly making them subject to the payment of the mortgage, he is presumed to have abated the amount of the debt from the purchase price. Wbat justice or reason is there in saying because be subsequently became possessed of a portion of the mortgaged property, that this portion should be first exhausted in payment of the mortgage debt? It seems to us there is no valid reason for so holding, on the facts of this case. The counsel for the appellants contend because of the subsequent ownership of this forty by the mortgagor, that this tract should be treated in the order of alienation, the same as though it had never been conveyed by him, and that an equity exists in favor of his clients, to have that land first applied in payment of the mortgage. But for the reasons already given we think this is an erroneous view of the rights of the parties. The question in this case is how much the appellants should deposit in court as a condition of filing their answer, setting up usury as a defense to the mortgage being foreclosed. We have not deemed it proper at this stage of the cause to consider the question whether, under the conveyances through which those parties claim title, this defense was available. The law upon that subject was somewhat discussed in one or two of the cases above referred to, and is incidentally noticed in Thomas vs. Mitchell, 27 Wis., 414. The finding, however, of the referee that the four forties on section 15 are bound to rat-ably contribute to the mortgage debt according to their relative values, is quite as favorable to the appellants as the facts will warrant. Nor is there any reason shown for deducting the costs of this court on the former appeal, from the amount to be deposited.

We are of the opinion that the order áppealed from is correct and should be affirmed.

By the Court. — It is so ordered.