Case ID: wis_39/html/0141-01.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

Magoon vs. Callahan.
    Fobeclosube op Land Contract: Vacating Judgment. (1) Defendant not required to deposit money alleged to have been paid. (2) Allowed one year for making payment. (3) Required to pay sum admitted to be due as a condition of opening judgment.
    
    Upon a complaint for a strict foreclosure of a contract for the purchase of land of which plaintiff claimed to have the legal title, judgment was rendered in default of an answer, requiring defendant to pay the contract price, with interest, etc., within fifteen days, or, in default thereof, bar-ling Ms rights. Upon affidavits excusing his default, defendant moved at the next term to set aside the judgment, and for leave to file an answer alleging that on the day of the date of said land contract, and for a long tíme previous, he was the owner of said land; that on that day he borrowed of the plaintiff the sum named in said contract, and, to secure payment of the same, executed and delivered to the plaintiff a deed of said land, and took from him the contract in question; that he was then a married man, said land was his homestead, and his wife did not execute or assent to his said deed, for which reason it was void; and that he had paid fifty dollars interest not allowed in the judgment. The court granted tire motion on condition that defendant, within ninety days, deposit with the clerk for plaintiff the principal sum admitted by the answer to be due, with interest torn the date of the contract, fifty dollars not to be paid by the clerk to the plaintiff until the further order of the court relative thereto, made after the final hearing of the action. On appeal by the defendant, Held,
    
    1. That the order should be so far modified as not to require defendant to deposit the fifty dollars alleged to have been paid.
    2. That if the facts stated in the answer are true, the deed and contract therein mentioned probably constitute a mortgage, upon the foreclosure of which the mortgagor would have a year to redeem from the sale; and the order should therefore be so modified as to give defendant a year for making his payment.
    3. That as the defense set up in the proposed answer affects the validity of the instruments as a security, the court did not erf in requiring the defendant, as a condition of opening the judgment, to pay the sum admitted to be due. Hanson v. Michelson, 19 Wis., 499, distinguished.
    APPEAL from the Circuit Court for La Fayette County.
    Action for the foreclosure of a contract for the purchase of land. The complaint alleged that the plaintiff, on the 6th of January, 1871, was the owner and in possession of the land; that on that day he entered into a written agreement with the defendant to convey it to him on or before one year from that date, upon the payment of $500, with interest at ten per cent., time being of the essence of the contract; and that defendant had not paid the purchase money, or interest thereon, or any portion thereof, the time having long since elapsed. Prayer, for a strict foreclosure. Judgment by default, May 26, 1875, requiring defendant to pay the amount found due by June 10, 1875, or’, in default thereof, that he be forever foreclosed, etc. At the June term, 1875, defendant moved to set aside tbe judgment, upon affidavits excusing tbe default, together with bis sworn answer. Tbe answer alleged that at tbe date of tbe contract defendant was tbe owner of and resided upon tbe premises, tbe same being bis homestead; that on that date be borrowed of plaintiff $500 for one year, agreeing to pay interest at ten per cent., and paid plaintiff on tbe same day $50 in full for interest to January 6,1872, when tbe whole amount would become due; that at tbe time of executing tbe contract described in tbe complaint, be executed to plaintiff a deed of tbe premises solely for tbe purpose of securing said loan of $500; and that be was married, but bis wife did not join in such conveyance. July 1,1875, tbe court set aside tbe judgment, upon condition that defendant, within ninety days from that date, should deposit with tbe clerk, for plaintiff’s use, tbe sum of $500, and interest tliereon at ten per cent, from January 6, 1871, according to tbe terms of tbe contract, $50 thereof not to be paid by tbe clerk to tbe plaintiff until tbe further order of tbe court made after tbe final bearing of tbe cause. Defendant appealed from that portion of tbe order imposing tbe above conditions.
    Tbe cause was submitted by both sides on briefs.
    
      P. A. Orton and O. F. Osborn, for appellant:
    It was a gross abuse of discretion in tbe court to grant tbe motion upon conditions which, if complied with, would render tbe answer unavailing. John's n v. Fldred, 13 "Wis., 482; Rublee v. Tibbetts, 26 id., 401. Tbe court seems to have proceeded upon tbe theory that tb 3 defense was unconscionable, and ought not to be permitted. But, even putting it upon tbe same footing as tbe defenses of usury and tbe statute of limitations, tbe judgment should have been set aside and tbe answer let in. “ The courts should not undertake to say that certain defenses provided by law are bard and unconscionable, and therefore undertake to legislate against them.” Bank of Kvnderhooh v. Qifforcl, 40 Barb., 659. Tbe answer shows that tbe transaction between Magoon and Gallaban consti-tutecL a mortgage,, both at law and in equity. Kent v. Agard, 24 Wis., 378; Sage v. McZcmghlwi, 34 id., 557. If so, the judgment should have been for foreclosure and sale, since this is the only -way in which defendant’s equity can be foreclosed. Defendant would then have a year from the time of sale within which to redeem; an important and sacred right, which he loses by this judgment.
    
      Magoon & Krancis, for respondent:
    The terms imposed rested solely in the discretion of the court, and the facts disclosed show no abuse of that discretion. The defense disclosed by the answer is an inequitable and unconscionable one, and the terms imposed were no more than just. ' It is difficult to discover any distinction in principle between that defense and the defense of usury; and courts of equity have always required, as a condition of aiding a party against usury, that he should pay into court the amount actually due. See Dole v. Northrop, 19 Wis., 249; Jones v. Walker, 22 id., 220; Weber v. Zeimet, 27 id., 685.
   Cole, J.

It is practically conceded that the circuit court properly set aside the judgment on the ground that the defendant’s default was excused. The only question is, whether the terms imposed as a condition to allowing the defendant to come in and answer were just and reasonable. After an examination of the case, we have concluded that there should be. some modification of the order imposing terms. The defendant claims that he paid $50 in full for interest on the sum to become due on the contract, the day the papers were executed. We think he should not be required to deposit that sum with the clerk, as by the order he must do. Whether that sum was or was not paid as alleged or claimed, will be a proper question for determination on the evidence. It is certainly a controverted point'in the case, and may well await the final hearing. It is true, the order provides that this $50 is not to be paid by the clerk to the plaintiff until the further order of tbe court; and it is suggested on tbe part of tbe plaintiff that tbis relieves tbe condition from all objection, and fully preserves the rights of tbe defendant. But if that sum has once been paid on tbe contract, it seems to us unjust to require tbe defendant to again raise tbe amount to be deposited with tbe clerk to await tbe result of tbe litigation.

Tbe provision in tbe order requiring tbe defendant to pay tbe amount which be admits to be justly due and payable, is correct, except that we are inclined to think tbe court should allow him until July 1, 1876, to make tbe payment. Our reason for giving tbis time is tbis: If tbe defendant’s version of tbe transaction is correct, tbe deed and contract executed on tbe 6th day of January, 1871, probably constitute a mortgage to secure tbe payment of a sum loaned. On tbe foreclosure of a mortgage there is a sale of tbe property, and a year given to redeem. The defendant should have about that time to make payment, and tbis be secures by tbis modification of tbe order.

Counsel, however, insist that as tbe defendant satisfactorily excused bis default and showed that be bad a defense on tbe merits, be should have been allowed to answer without any conditions. "We cannot assent to tbis proposition. Tbe defense set up in tbe answer was, that tbe property conveyed was tbe defendant’s homestead; that be was a married man; and that tbe deed was void because not executed by bis wife. Tbis defense, if sustained, affects tbe validity of tbe instruments as securities. And tbe defendant asks a court of equity to exercise its discretion and enable him to make that defense. And tbe court merely requires him to pay tbe money confessedly due and payable as a condition to coming in to avoid and set aside the securities. It is quite analogous to permitting a party, after default, to come in and make tbe defense of usury, with tbis difference: here tbe plaintiff is guilty of no wrong; be may not even have been wanting in proper diligence in taking tbe conveyance without tbe signature of tbe wife; for it does not appear that tbe defendant’s wife lived witb bim — indeed, tbe inference from tbe answer is that sbe does not, — and tbe plaintiff consequently may not have known that be was a married man; while in tbe case of usury tbe lender is guilty of a violation of law, Still, as a condition of aiding a party against usury, this court has held that it was just and reasonable to require tbe borrower to pay tbe principal sum due and interest. Dole v. Northrop, 19 Wis., 249; Jones v. Walker, 22 id., 220; and Weber v. Zeimet, 27 id., 685. According to our view, it was a most reasonable exercise of discretion on tbe part of tbe court to require tbe defendant to pay tbe amount confessedly due and owing as a condition to allowing bim to come in witb his proposed defense. Nor do we think this view is in conflict witb tbe decision in Hanson v. Michelson, 19 Wis., 499. Tbe leading facts of tbe two cases are so unlike that they cannot be brought within tbe application of tbe same principle. Have tbe defendant admits that be justly owes the plaintiff $500, and tbe interest thereon from January 6,-1872; and every principle of law and all rules of honest dealing require bim to pay bis debt.

By the Oowrt. — Tbe order of tbe circuit court is reversed, and tbe cause is remanded for a modification of tbe terms imposed, as indicated in this opinion.