Case Title: Bank Mutual v. S.J. Boyer Construction, Inc.

Citation: 2010 WI 74

Docket Number: 2008AP000912

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2010-07-09T00:00:00Z

Document:
2010 WI 74 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2008AP912 
COMPLETE TITLE: 
 
 
Bank Mutual f/k/a First Northern Savings Bank, 
          Plaintiff-Respondent-Petitioner, 
     v. 
S.J. Boyer Construction, Inc., Steven J. Boyer 
and Marcy A. Boyer, 
          Defendants-Appellants, 
Pioneer Credit Union, 
          Defendant. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2009 WI App 14 
Reported at: 316 Wis. 2d 266, 762 N.W.2d 826 
(Ct. App. 2009-Published) 
 
 
OPINION FILED: 
July 9, 2010   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 20, 2009   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Brown   
 
JUDGE: 
Timothy A. Hinkfuss   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
ABRAHAMSON, C.J., dissents (opinion filed). 
BRADLEY, J., joins dissent.   
 
NOT PARTICIPATING: ZIEGLER, J., did not participate.   
 
 
 
ATTORNEYS: 
 
For the plaintiff-respondent-petitioner there were briefs 
by Roy L. Prange, Jr. and Quarles & Brady LLP, Madison, and oral 
argument by Roy L. Prange, Jr. 
 
For the defendants-appellants there was a brief by Philip 
J. Danen and Roels, Keidatz, Fronsee & Danen, LLP, DePere, and 
oral argument by Philip J. Danen. 
 
An amicus curiae brief was filed by John E. Knight, James 
E. Bartzen, Kirsten E. Spira, and Boardman, Suhr, Curry & Field 
LLP, Madison, on behalf of the Wisconsin Bankers Association. 
 
 
 
 
2010 WI 74
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2008AP912   
(L.C. No. 
2007CV232) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Bank Mutual f/k/a First Northern Savings Bank, 
 
          Plaintiff-Respondent-Petitioner, 
 
     v. 
 
S.J. Boyer Construction, Inc., Steven J. Boyer 
and Marcy A. Boyer, 
 
          Defendants-Appellants, 
 
Pioneer Credit Union, 
 
          Defendant. 
 
 
 
FILED 
 
JUL 9, 2010 
 
A. John Voelker 
Acting Clerk of Supreme 
Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed.   
 
¶1 
DAVID T. PROSSER, J.   This is a review of a published 
decision of the court of appeals, Bank Mutual v. S.J. Boyer 
Construction, Inc., 2009 WI App 14, 316 Wis. 2d 266, 762 
N.W.2d 826, which reversed an order of the Brown County Circuit 
Court, Timothy A. Hinkfuss, Judge.  The order denied Steven and 
Marcy Boyer (the Boyers) relief from judgments for the amount 
No.  2008AP912 
2 
 
due on several notes.  The Boyers had guaranteed payment on the 
notes. 
¶2 
The case presents two issues.  The first is whether a 
mortgagee, by electing to foreclose on a mortgage under the 
shortened redemption period provided by Wis. Stat. § 846.103(2) 
(2007-08),1 forfeits the right to obtain a judgment against a 
guarantor of payment of the underlying debt.  The second is 
whether, if Wis. Stat. § 846.103(2) requires a mortgagee 
foreclosing under the shortened redemption period to waive or 
forfeit its right to obtain a judgment against a guarantor of 
payment, the guarantor may nonetheless waive by contract the 
right to be free from such a judgment. 
¶3 
We conclude that a mortgagee who forecloses under the 
shortened redemption period of Wis. Stat. § 846.103(2) does not 
forfeit the right to obtain a judgment against a guarantor of 
payment even though it must waive its right to collect any 
deficiency from the debtor.  We conclude that guarantors of 
payment are not members of the class of persons against whom a 
mortgagee 
must 
waive 
judgment 
when 
invoking 
Wis. 
Stat. 
§ 846.103(2) because guarantors are not "personally liable for 
the debt secured by the mortgage."  This statutory phrase is 
used to distinguish the liability of a borrower on a debt, which 
is a personal obligation, from the liability of a mortgagor, 
which is an obligation limited to the property the mortgagor has 
                                                 
1 All subsequent references to the Wisconsin Statutes are to 
the 2007-08 version unless otherwise indicated. 
No.  2008AP912 
3 
 
put up as security for the debt.  The statutory phrase does not 
contemplate guarantors whose liability arises not from the debt 
but from a separate contract.  We also conclude that the 
textually and contextually manifest purpose of the statute is 
not furthered by requiring a mortgagee to waive the right to 
judgment against a guarantor when proceeding under Wis. Stat. 
§ 846.103(2).  Because we reach this conclusion, we decline to 
address whether a guarantor may waive the right to be free from 
deficiency judgment under Wis. Stat. § 846.103(2). 
¶4 
Because a 
mortgagee proceeding under Wis. Stat. 
§ 846.103(2) need not waive and does not forfeit judgment 
against a guarantor of payment, the circuit court properly 
denied 
the 
Boyers' 
motions 
for 
relief 
from 
judgment.  
Consequently, we reverse the decision of the court of appeals. 
I. FACTS AND PROCEDURAL HISTORY 
¶5 
The facts are undisputed.  On February 1, 2000, the 
Boyers entered into a Continuing Guaranty (Unlimited) with First 
Northern Savings Bank, now doing business as Bank Mutual.  This 
Guaranty read, in relevant part: 
GUARANTY.  For value received, and to induce 
First Northern Savings Bank, S.A. of Green Bay, 
Wisconsin ("Lender"), to extend credit or to grant or 
continue other credit accommodations to S.J. Boyer 
Construction, Inc. ("Debtor"), the undersigned jointly 
and severally guarantee payment of the Obligations 
defined below when due . . . .  "Obligations" means 
all loans, drafts, overdrafts, checks, notes, and all 
other debts, obligations and liabilities of every kind 
and description, whether of the same or a different 
nature, arising out of credit previously granted, 
credit contemporaneously granted or credit granted in 
the future by Lender to any Debtor, to any Debtor and 
No.  2008AP912 
4 
 
another, or to another guaranteed or endorsed by any 
Debtor. . . .  This guaranty is also secured (to the 
extent not prohibited by law) by all existing and 
future security agreements between Lender and any of 
the undersigned and by any mortgage stating it secures 
guaranties of any of the undersigned.  This Guaranty 
is valid and enforceable against the undersigned even 
though any Obligation is invalid or unenforceable 
against any Debtor. 
The Guaranty also contained a waiver provision: 
WAIVER.  To the extent not prohibited by law the 
undersigned expressly waive notice of the acceptance 
of this Guaranty, the creation of any present or 
future 
Obligation, 
default 
under 
any 
Obligation, 
proceedings to collect from any Debtor or anyone else, 
all diligence of collection and presentment, demand, 
notice and protest and any right to disclosures from 
Lender regarding the financial condition of any Debtor 
or guarantor of the Obligations or the enforceability 
of the Obligations.  No claim, including a claim for 
reimbursement, 
subrogation, 
contribution 
or 
indemnification which any of the undersigned may, as a 
guarantor of the Obligations, have against a co-
guarantor or any of the Obligations or against any 
Debtor shall be enforced nor any payment accepted 
until the Obligations are paid in full and no payments 
to or collections by Lender are subject to any right 
of recovery. 
¶6 
Between 
February 
2003 
and 
October 
2005, 
Boyer 
Construction executed five business notes to Bank Mutual, 
totaling nearly $1,400,000.2  The notes were made in conjunction 
with loans made by Bank Mutual to Boyer Construction.  The loans 
were secured by seven mortgages on five properties owned by 
Boyer Construction. 
                                                 
2 The five notes were executed on February 28, 2003 
($235,000), March 14, 2003 ($336,909.03), April 30, 2003 
($380,000), April 19, 2004 ($155,400.59), and October 3, 2005 
($267,604.37).  The original cumulative value of the notes was 
$1,374,913.99. 
No.  2008AP912 
5 
 
¶7 
In time, Boyer Construction defaulted on the notes, 
and Bank Mutual initiated this action against Boyer Construction 
and the Boyers individually on February 1, 2007.  Bank Mutual's 
complaint included five counts of foreclosure——one count for 
each of the properties covered by the seven mortgages——and a 
separate claim directly against the Boyers for the amounts due 
under the defaulted notes.  For each foreclosure claim, Bank 
Mutual stated that it waived any deficiency against Boyer 
Construction. 
¶8 
Boyer Construction and Steven Boyer answered on March 
13, 2007, admitting most of the allegations but denying that 
Steven was liable on the guaranty.  Marcy Boyer did not answer.3 
¶9 
Bank Mutual moved for summary judgment against Steven 
and Boyer Construction and default judgment against Marcy.  
Neither Boyer Construction nor Steven opposed the motion for 
summary judgment.  The court granted both motions.  On May 31, 
2007, the court entered judgments against Steven and Marcy in 
the amount of $1,436,457.85.  The court also entered a 
foreclosure judgment on the five mortgaged properties owned by 
Boyer Construction, ordering that all five be sold.  The court 
also filed Findings of Fact and Conclusions of Law in which it 
                                                 
3 Marcy was divorced from Steven by the time of the 
complaint, and she could not be reached at her last known 
address.  Marcy was eventually served by publication, but there 
was an issue as to whether Bank Mutual exercised reasonable 
diligence in attempting to serve her personally.  Consequently, 
the parties later stipulated that Marcy's failure to answer was 
due to excusable neglect under Wis. Stat. § 806.07(1)(a). 
No.  2008AP912 
6 
 
noted "[t]hat the Plaintiff [Bank Mutual] waived a deficiency 
claim against the principal defendant Boyer Construction." 
¶10 Following entry of the foreclosure judgment, the 
mortgaged properties were sold at a sheriff's sale.  The circuit 
court authorized the sale three months after entry of the 
foreclosure judgment because Bank Mutual had waived its right to 
a deficiency judgment against Boyer Construction pursuant to 
§ 846.103(2), which provides for a shortened redemption period 
if the mortgagee waives a deficiency judgment against "every 
party who is personally liable for the debt secured by the 
mortgage."  Bank Mutual was the only bidder and purchased the 
properties for $1,180,000. 
¶11 Bank 
Mutual 
moved 
for 
an 
order 
confirming 
the 
sheriff's sale.  Boyer Construction and Steven objected to 
confirmation on grounds that the sale violated Wis. Stat. 
§ 846.103 because Bank Mutual elected the shortened redemption 
period but did not expressly waive a deficiency judgment against 
the Boyers.  On January 11, 2008, the circuit court heard oral 
argument on this objection.  At this hearing, Steven also raised 
a motion for relief from the judgment under Wis. Stat. § 806.07.4 
¶12 The court overruled the objection and denied Steven's 
motion for relief.  The court based its conclusion on two 
                                                 
4 Specifically, Steven sought relief under Wis. Stat. 
§§ 806.07(1)(d) and (e), which provide: "On motion and upon such 
terms as are just, the court . . . may relieve a party or legal 
representative from a judgment, order or stipulation for the 
following reasons: . . . (d) The judgment is void; (e) The 
judgment has been satisfied, released, or discharged." 
No.  2008AP912 
7 
 
grounds.  First, it concluded that Steven should have challenged 
the Findings of Fact and Conclusions of Law, rather than waiting 
until after the sale to raise his objection.  Second, it 
concluded that the Guaranty, as a contract separate from the 
business notes, provided an independent basis for the Boyers to 
be liable to Bank Mutual, in spite of the language of 
§ 846.103(2) requiring the waiver of deficiency against parties 
"personally liable" for the debts.5 
¶13 On February 8, 2008, Marcy filed a motion to re-open 
the default judgment pursuant to Wis. Stat. § 806.07.  The court 
also denied Marcy's motion for relief.6  The court entered an 
order denying Boyer Construction and the Boyers' motions, on 
February 26, 2008.  Boyer Construction and the Boyers appealed. 
¶14 The court of appeals reversed the circuit court in a 
unanimous, published opinion.  Bank Mutual, 316 Wis. 2d 266.  
The court began its analysis by looking at the text of Wis. 
Stat. 
§ 846.103(2) 
and 
noting 
that 
nothing 
in 
the 
text 
explicitly excluded guarantors from those "personally liable for 
the debt secured by the mortgage."   Id., ¶12.  The court then 
                                                 
5 Recognizing that there was no case law directly on point, 
Judge Hinkfuss noted presciently that whether a guarantor is 
personally liable for the debt would likely be an issue on 
appeal. 
6 As noted above, the parties stipulated that Marcy's 
default resulted from excusable neglect.  Nevertheless, because 
her arguments for relief were the same as Steven's, the court 
concluded that she had no meritorious defense in the action, a 
requirement for relief from a default judgment.  See J.L. 
Phillips & Assocs. v. E&H Plastic Corp. 217 Wis. 2d 348, 358, 
577 N.W.2d 13 (1998). 
No.  2008AP912 
8 
 
turned to the question of whether the guaranty rendered the 
Boyers 
personally 
liable 
for 
the 
notes 
issued 
by 
Boyer 
Construction.  Id. 
¶15 In determining whether a guaranty makes a party 
personally liable for a debt, the court distinguished between an 
absolute guaranty and a conditional guaranty.  Id., ¶13 (citing 
38 Am. Jur. 2d Guaranty § 70 (1999)).  The court held that in 
the case of an absolute guaranty, the mortgagee may proceed 
directly against the guarantor without first proceeding against 
the mortgagor or its property "because the guarantors are 
'liable as principals.'"  Id. (quoting First Wis. Nat'l Bank of 
Oshkosh v. Kramer, 74 Wis. 2d 207, 212, 246 N.W.2d 536 (1976)).  
When dealing with a conditional guaranty, however, the mortgagee 
must exhaust all remedies against the principal debtor prior to 
proceeding against the guarantor.  Id. (citing Cottrell v. New 
London Furniture Co., 94 Wis. 176, 178, 68 N.W. 874 (1896)). 
¶16 The court held that the guaranty executed by the 
Boyers was "an unconditional guaranty of payment, not a 
conditional guaranty of collection."  Id., ¶14.  Consequently, 
it held, Bank Mutual's decision to expedite the redemption 
period precluded it from seeking a deficiency judgment against 
the Boyers.  Id., ¶15. 
¶17 The court rejected Bank Mutual's arguments that the 
Boyers were personally liable only on the guaranty, not the 
underlying debt.  Id., ¶17.  The court also rejected Bank 
Mutual's argument that restricting its right to a deficiency 
No.  2008AP912 
9 
 
judgment 
was 
incorrect 
because 
it 
could 
have 
proceeded 
separately under the guaranty without foreclosure.  Id. 
¶18 Finally, 
the 
court 
analogized 
nineteenth 
century 
Wisconsin Supreme Court precedent in support of its holding.  
Id., ¶¶19-20.  It relied on Halbach v. Trester, 102 Wis. 530, 78 
N.W. 759 (1899), in which mortgagees who "transferred a note and 
mortgage by assignment and indorsement," with the effect of 
guaranteeing payment of the note, were personally liable for the 
debt.  Bank Mutual, 316 Wis. 2d 266, ¶20. 
¶19 Bank Mutual petitioned this court for review, which we 
granted on April 14, 2009. 
II. STANDARD OF REVIEW 
¶20 The Boyers moved for relief from judgment pursuant to 
Wis. Stat. § 806.07(1).  The circuit court denied relief.  A 
circuit court's order denying a motion for relief under § 806.07 
is a discretionary decision, and it will not be reversed on 
appeal absent an erroneous exercise of discretion.  Sukala v. 
Heritage Mut. Ins. Co., 2005 WI 83, ¶8, 282 Wis. 2d 46, 698 
N.W.2d 610; State ex rel. M.L.B. v. D.G.H., 122 Wis. 2d 536, 
541, 363 N.W.2d 419 (1985).  A circuit court acts within its 
discretion when it examines the relevant facts, applies a proper 
standard of law, and, using a demonstrated rational process, 
reaches a conclusion that a reasonable judge could reach.  
Johnson v. Allis Chalmers Corp., 162 Wis. 2d 261, 273, 470 
N.W.2d 859 (1991). 
¶21 The court of appeals reversed the circuit court on the 
grounds that Bank Mutual, by proceeding under the shortened 
No.  2008AP912 
10 
 
redemption period in Wis. Stat. § 846.103(2), gave up (waived) 
its right to judgment against the Boyers on the guaranty of 
payment. 
 
This 
ruling 
presents 
a 
question 
of 
statutory 
interpretation.  Interpreting a statute and applying a statute 
to undisputed facts are questions of law that we review de novo.  
See Hamilton v. Hamilton, 2003 WI 50, ¶14, 261 Wis. 2d 458, 661 
N.W.2d 832 (applying de novo review to the application of a 
statute to undisputed facts).  We decide these questions 
independently of the circuit court and the court of appeals, but 
benefit from their analyses.  Id. 
III. DISCUSSION 
¶22 This 
case 
requires 
us 
to 
interpret 
Wis. 
Stat. 
§ 846.103(2).  In doing so, we begin by examining our relevant 
rules of statutory construction.  We then place § 846.103(2) in 
its proper context by looking at the entirety of Wis. Stat. 
ch. 846, which sets out the rules in foreclosure proceedings.  
We then examine the phrase "personally liable for the debt 
secured by the mortgage" to give it its proper meaning.  
Finally, we examine the textually and contextually manifest 
purpose of Wis. Stat. § 846.103(2). 
A. 
Rules of Statutory Interpretation 
¶23 When interpreting a statute, we begin with the 
language of the statute.  State ex rel. Kalal v. Circuit Court 
for Dane County, 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 
N.W.2d 110.  We give words their common and ordinary meaning 
unless those words are technical or specifically defined.  Id.  
In this case, "we give legal terms of art their accepted legal 
No.  2008AP912 
11 
 
meaning."  Estate of Matteson v. Matteson, 2008 WI 48, ¶22, 309 
Wis. 2d 311, 749 N.W.2d 557.   
¶24 We do not read the text of a statute in isolation, but 
look at the overall context in which it is used.  Kalal, 271 
Wis. 2d 633, ¶46.  When looking at the context, we read the text 
"as part of a whole; in relation to the language of surrounding 
or closely-related statutes; and reasonably, to avoid absurd or 
unreasonable results."  Id.  Thus, the scope, context, and 
purpose 
of 
a 
statute 
are 
relevant 
to 
a 
plain-meaning 
interpretation "as long as the scope, context, and purpose are 
ascertainable from the text and structure of the statute 
itself."  Id., ¶48.  If the language is clear and unambiguous, 
we apply the plain words of the statute and ordinarily proceed 
no further.  Id., ¶46. 
¶25 The inquiry does not stop if a statute is ambiguous, 
meaning that "it is capable of being understood by reasonably 
well-informed persons in two or more senses."  Id., ¶47.  If a 
statute is ambiguous, we may turn to extrinsic sources.  Id., 
¶51.  Extrinsic sources are sources outside the statute itself, 
including the legislative history of the statute.  Id.  We 
sometimes use legislative history to confirm the plain meaning 
of an unambiguous statute, but we will not use legislative 
history to create ambiguity where none exists.  Id. 
B. 
Context and Scope of Wis. Stat. § 846.103(2) 
¶26 Wisconsin Stat. ch. 846 sets up a comprehensive scheme 
of 
foreclosure, 
including 
the 
procedural 
and 
substantive 
requirements for obtaining a deficiency judgment for the unpaid 
No.  2008AP912 
12 
 
balance on the debt remaining after a foreclosure sale.  
Therefore, to interpret Wis. Stat. § 846.103(2), we read it in 
the context of ch. 846 as a whole.  Kalal, 271 Wis. 2d 633, ¶46. 
1. 
Statutory Language 
¶27 Chapter 846 
sets 
out 
a 
two-step 
procedure 
for 
foreclosure of a mortgage.  Shuput v. Lauer, 109 Wis. 2d 164, 
171, 325 N.W.2d 321 (1982).  The first step entails the judgment 
of foreclosure and the sale of the property.  Id.  During this 
first step, the court determines the parties' legal rights in 
the underlying mortgage and obligation, including the right to a 
deficiency judgment.  Id.  The second step carries into effect 
and enforces the judgment of foreclosure and sale.  Id.   During 
this second step, the court orders confirmation of the sale, 
computes the amount of any deficiency, and enters a judgment for 
the deficiency.  Id. 
¶28 Wisconsin Stat. § 846.01(1) requires the court to 
render 
judgment 
of 
foreclosure 
and 
sale 
in 
successful 
foreclosure actions.  Wisconsin Stat. § 846.04(1) permits a 
plaintiff seeking foreclosure to obtain a deficiency judgment 
and sets out the procedure for doing so: 
The plaintiff may, in the complaint, demand 
judgment for any deficiency that may remain due the 
plaintiff after sale of the mortgaged premises against 
every party who is personally liable for the debt 
secured by the mortgage. Judgment may be rendered for 
any deficiency remaining after applying the proceeds 
of sale to the amount due. The judgment for deficiency 
shall 
be 
ordered 
in 
the 
original 
judgment 
and 
separately rendered against the party liable on or 
after the confirmation of sale. The judgment for 
deficiency shall be entered in the judgment and lien 
No.  2008AP912 
13 
 
docket and, except as provided in subs. (2) and (3), 
enforced as in other cases. 
Id. (emphasis added). 
¶29 Chapter 846 also sets out two redemption periods, 
depending on the type of property being foreclosed.  For a one-
to four-family owner-occupied residence, a farm, a church, or a 
tax-exempt nonprofit charitable organization, a foreclosure sale 
may not be held until 12 months after the foreclosure judgment.  
Wis. Stat. § 846.10(2).  For all other properties, a foreclosure 
sale may not be held until 6 months after the foreclosure 
judgment.  Wis. Stat. § 846.103(1).  Before a sale is held, 
"[t]he 
mortgagor, 
the 
mortgagor's 
heirs, 
personal 
representatives or assigns may redeem the mortgaged premises" by 
paying the amount of the judgment.  Wis. Stat. § 846.13. 
¶30 There are two exceptions in the law that permit a 
mortgagee to shorten a redemption period.  One exception, 
enacted in 1960, provides for a six-month, rather than twelve-
month, period of redemption for one- to four-family owner-
occupied residences, farms, churches, and tax-exempt charitable 
organizations, if the mortgagee waives a deficiency judgment 
against "every party who is personally liable for the debt 
secured by the mortgage."  Wis. Stat. § 846.101.  The second 
exception is the statute at issue in this case.  Passed in 1978, 
it provides an exception to all properties not covered in 
§ 846.101: 
If the mortgagor of real property other than a 
one− to 4−family residence that is owner−occupied at 
the commencement of the foreclosure action, a farm, a 
church 
or 
a 
tax−exempt 
nonprofit 
charitable 
No.  2008AP912 
14 
 
organization has agreed in writing at the time of the 
execution of the mortgage to the provisions of this 
section, the plaintiff in a foreclosure action of a 
mortgage, which mortgage is recorded subsequent to May 
12, 1978, may elect by express allegation in the 
complaint to waive judgment for any deficiency which 
may remain due to the plaintiff after sale of the 
mortgaged 
premises 
against 
every 
party 
who 
is 
personally 
liable 
for 
the 
debt 
secured 
by 
the 
mortgage, and to consent that the mortgagor, unless he 
or she abandons the property, may remain in possession 
of the mortgaged property and be entitled to all 
rents, issues and profits therefrom to the date of 
confirmation of the sale by the court. When the 
plaintiff so elects, judgment shall be entered as 
provided in this chapter, except that no judgment for 
deficiency may be ordered nor separately rendered 
against any party who is personally liable for the 
debt secured by the mortgage and the sale of the 
mortgaged premises shall be made upon the expiration 
of 3 months from the date when such judgment is 
entered. 
Wis. Stat. § 846.103(2) (emphasis added). 
¶31 Three statutes——Wis. Stat. §§ 846.04, 846.101, and 
846.103(2)——use the exact same phrase: "every party who is 
personally liable for the debt secured by the mortgage."  Both 
Wis. Stat. § 846.101 and § 846.103(2), which permit shortened 
redemption periods in exchange for waivers of certain deficiency 
judgments, were created decades after the legislature included 
the phrase "personally liable for the debt secured by the 
mortgage" in what is now Wis. Stat. § 846.04.  We infer that the 
legislature 
intended 
the 
class 
of 
persons 
against 
whom 
deficiency judgments must be waived under Wis. Stat. §§ 846.101 
and 846.103(2) to be the same class of persons against whom a 
deficiency judgment may be obtained under Wis. Stat. § 846.04.  
See Heritage Farms, Inc. v. Markel Ins. Co., 2009 WI 27, ¶40, 
No.  2008AP912 
15 
 
316 Wis. 2d 47, 762 N.W.2d 652 ("We generally presume that when 
the legislature enacts a statute, it is fully aware of the 
existing laws.").  When the same term is used throughout a 
chapter of the statutes, it is a reasonable deduction that the 
legislature intended that the term possess an identical meaning 
each time it appears.  See Coutts v. Wis. Ret. Bd., 209 
Wis. 2d 655, 668-69, 562 N.W.2d 917 (1997). 
2. 
History and Prior Interpretations of Wis. Stat. § 846.04 
¶32 Because we conclude that the phrase "personally liable 
for the debt secured by the mortgage" has the same meaning in 
both Wis. Stat. § 846.103(2) and § 846.04, we now examine the 
lengthy history of Wis. Stat. § 846.04 and our prior cases 
interpreting that statute. 
¶33 Deficiency judgments were not available at common law 
and are available only as provided by statute.  Stellmacher v. 
Union Mortgage Loan Company, 195 Wis. 635, 637, 219 N.W. 343 
(1928).  In 1862 the legislature passed a statute permitting 
deficiency judgments "against the defendant or defendants who 
executed the note, bond or other evidence of debt accompanying 
the mortgage."  §3, ch. 243, Laws of 1862.  This statute was 
later amended to authorize deficiency judgments against "every 
party who may be personally liable for the debt secured by the 
mortgage, whether the mortgagor or other persons, if upon the 
same contract which the mortgage is given to secure."  Wis. 
Stat. § 3156 (1878).  In 1935 the statute was changed to its 
present form, providing simply that the mortgagor may seek a 
deficiency judgment "against every party who is personally 
No.  2008AP912 
16 
 
liable for the debt secured by the mortgage."  § 364, ch. 541, 
Laws of 1935.7 
¶34 An important early Wisconsin case addressing whether a 
guarantor could be held liable for a deficiency judgment is 
Palmeter v. Carey, 63 Wis. 426, 21 N.W. 793 (1885).  In 
Palmeter, the mortgagor conveyed mortgaged property to another 
party, who then agreed to assume the debt through a clause in 
the conveyance.  Id. at 427.  Under the statutory language at 
that time, a deficiency judgment could be obtained against 
"every party who may be personally liable for the debt secured 
by the mortgage, whether the mortgagor or other persons, if upon 
the same contract which the mortgage is given to secure."  Id. 
                                                 
7 Although it is not clear why the legislature removed the 
provision, "whether the mortgagor or other persons, if upon the 
same contract which the mortgage is given to secure," the act 
removing this language was entitled: 
AN ACT to revise portions of TITLE XXV PROCEEDINGS IN 
CIVIL ACTIONS IN COURTS OF RECORD and TITLE XXVI 
ACTIONS RELATING TO REAL ESTATE for clarity and 
conciseness of language and simplifying and improving 
said proceedings and for harmonizing the substantive 
provisions with the procedural rules which are being 
revised by the Supreme Court. 
Ch. 541, Laws of 1935. 
This language suggests that, by removing the explanation 
that the deficiency judgment could be brought against "the 
mortgagor or other persons, if upon the same contract which the 
mortgage is given to secure," the legislature merely removed 
what was superfluous language, because the phrase "personally 
liable for the debt secured by the mortgage" includes, by its 
own terms, those who may not be the mortgagor but who are liable 
upon the contract that the mortgage was given to secure. 
No.  2008AP912 
17 
 
at 430.  This court interpreted that statutory language as 
follows: 
The statute does not require that the person held 
liable in the foreclosure action for a deficiency must 
be an original contractor of the mortgage debt. 
Doubtless one may become a party to it after the 
indebtedness has been incurred by the mortgagor;——as 
if he indorse or guaranty a note secured by mortgage 
after the execution of the mortgage. We think in such 
case it cannot be successfully maintained that such 
indorser or guarantor is not within the statute. 
Id. at 431. 
¶35 In Cottrell, this court clarified the rule set out in 
Palmeter.  The guarantor in Cottrell indorsed the back of two 
notes, agreeing to "guaranty the collection of the within note, 
with all costs thereof."  Cottrell, 94 Wis. at 177. This court 
held that "a guarantor of the collection of a note or debt does 
not become liable on his contract of guaranty until the 
guarantee has exhausted all the remedies which the law gives him 
for the collection of his debt from the principal debtor without 
avail."  Id. at 178.  It further held that "this statute 
authorizes a judgment for a deficiency against such persons only 
as are liable for the mortgage debt. The guarantors are liable 
only according to the terms of their contract."  Id. at 179.  
The court also opted to interpret the statute narrowly in light 
of the common-law rule regarding deficiency judgments: 
The statute makes no new rule of liability. It does 
not on its face purport to make any such change. In 
order that a statute shall change a common-law 
liability or create a new one, the intention to work 
such an effect must appear on the face of the statute 
itself with some reasonable degree of clearness. 
No.  2008AP912 
18 
 
Id.  Accordingly, because the mortgagee's remedies had not yet 
been exhausted, the guarantor was not liable "for the debt 
secured by the mortgage" and the mortgagee could not obtain a 
deficiency judgment against him.  Id. 
¶36 This court again addressed the issue of whether a 
guarantor could be held liable for a deficiency judgment in 
Halbach.  In Halbach, the mortgagees transferred their interest 
in a mortgage to Christine Webster, and signed their names on 
the back of the note under the words "Pay to the order of 
Christine Webster," by which they agreed that they would pay the 
debt in full to Webster or Webster's transferee.  Halbach, 102 
Wis. at 532.  The new mortgagee brought suit for foreclosure and 
sought a deficiency judgment against the defendants.  Id.  The 
court held that "when the defendants indorsed the note they 
became holden to pay the debt secured by the mortgage, upon the 
conditions stated."  Id. at 533.  The court distinguished 
Cottrell on the grounds that that Cottrell involved a guaranty 
of collection, not an absolute guaranty of payment.  Id. at 534.  
The court concluded, therefore, that the circuit court properly 
granted a deficiency judgment against the defendants.  Id.  
¶37 In Stellmacher, the Union Mortgage Company assigned a 
note and mortgage to a new mortgagee and entered into a written 
agreement guaranteeing the collection of the debt.  Stellmacher, 
195 Wis. at 635.  The new mortgagee brought a foreclosure action 
and sought a deficiency judgment against both the mortgagor and 
Union Mortgage Company, the former mortgagee.  Id. at 636.  This 
court held that the guaranty was not upon the same contract 
No.  2008AP912 
19 
 
which the mortgage was given to secure, and accordingly it 
reversed the deficiency judgment against Union Mortgage Company.  
Id. at 637. 
¶38 Although these early Wisconsin cases provide some 
guidance on the meaning of the phrase "personally liable for the 
debt secured by the mortgage," they do not resolve the issue in 
this case, for several reasons.  First, the cases generally 
focused on whether the guarantor's liability was "upon the same 
contract which the mortgage is given to secure," in accordance 
with the statutory language at the time.  Second, the cases 
appear to reach inconsistent results on similar facts.8  Finally, 
and most important, none of the cases addresses a factual 
situation in which the guarantor's liability arises from a 
completely independent contract of guaranty.9  For example, in 
                                                 
8 Commentators at the time discussing Stellmacher v. Union 
Mortgage Loan Co., 195 Wis. 635, 219 N.W. 343 (1928), observed 
that "[c]onfusion is apt to result from this ruling," but 
reasoned that the distinction between Stellmacher and cases 
reaching the opposite conclusion was that Stellmacher dealt with 
a guaranty of collection rather than a guaranty of payment.  
Kenneth E. Worthing & Donald A. Butchart, Mortgages-Liability 
for Deficiency Judgment, 5 Wis. L. Rev. 61 (1928).  However, so 
long as the guaranty is made on a completely separate contract, 
neither a guarantor of payment nor a guarantor of collection is 
personally liable for the debt secured by the mortgage. 
9 See Stellmacher, 195 Wis. at 635 (bank assigned note to 
plaintiff and guaranteed collection); Palmeter v. Carey, 63 
Wis. 426, 21 N.W. 793 (1885) (mortgagor conveyed mortgaged 
premise to defendant, in which conveyance the defendant assumed 
the debt); Cottrell v. New London Furniture Co., 94 Wis. 176, 68 
N.W. 874 (1896) (guarantor indorsed back of note, guaranteeing 
its collection); Halbach v. Trester, 102 Wis.  530, 78 N.W. 759 
(1899) (mortgagees assigned mortgage and signed guarantee on the 
back of the note). 
No.  2008AP912 
20 
 
Halbach, the previous mortgagee directly signed the back of the 
note, assuming liability on and under the terms of the note.  
This situation is distinguishable from the situation at hand, in 
which the guarantor's liability arises from a separate contract 
of guaranty.  Halbach, 102 Wis. at 532. 
C. 
"Personally liable for the debt secured by the mortgage" 
¶39 We now define the phrase "personally liable for the 
debt secured by the mortgage" used in Wis. Stat. § 846.103(2).  
We acknowledge that, read according to its common and ordinary 
meaning, the phrase does not clearly exclude guarantors.  Thus, 
reasonable people could read the language to cover the Boyers.  
Nonetheless, it is clear to us that the phrase "personally 
liable for the debt" is a term of art that must be given its 
legal meaning.  See Estate of Matteson, 309 Wis. 2d 311, ¶22.  
We conclude that, by using the phrase "personally liable for the 
debt," the legislature intended to use the phrase's specific 
legal meaning and did not intend it to encompass guarantors who 
guarantee a debt through a contract separate from the note 
creating the debt. 
¶40 We reach this conclusion for three reasons.  First, 
the phrase "personally liable" has traditionally been used to 
distinguish the borrower's liability, which is a personal 
obligation based upon the note, from the mortgagor's liability, 
which is an obligation limited to the property named in the 
mortgage that is provided as security for the note.  Second, a 
guarantor's liability has traditionally been treated as separate 
and distinct from the liability of the borrower, contingent on 
No.  2008AP912 
21 
 
the terms of the guaranty.  Third, other states with statutes 
insulating borrowers from deficiency judgments have generally 
refused to extend those protections to guarantors. 
1. 
Legal meaning of "personally liable for the debt" 
¶41 In 
the 
context 
of 
foreclosure 
law, 
the 
term 
"personally liable for the debt" has traditionally been used to 
distinguish 
liability 
on 
the 
note, 
which 
is 
a 
personal 
obligation, from liability on the mortgage, which is an 
obligation limited to the property given to secure the debt.  
Thus, the phrase explains that a deficiency judgment can be 
obtained against a mortgagor only if that mortgagor is also 
liable on the underlying debt. 
¶42 The use of the phrase "personally liable for the debt" 
to distinguish the borrower's liability on the note from the 
mortgagor's liability on the mortgage is illustrated by Farmers 
& Merchants Bank v. Matsen, 219 Wis. 401, 263 N.W. 192 (1935).  
In Matsen, the bank began an action to collect the amount due on 
a note, and the borrower raised the defense that a foreclosure 
action was already pending.  Id. at 401.  This court framed the 
issue as: 
Does the fact that an action is pending for the 
foreclosure of a mortgage and for a judgment for a 
deficiency constitute a defense to a subsequent action 
commenced by the same plaintiff, demanding judgment on 
the obligation secured by the mortgage against those 
personally liable thereon? 
Id. at 402. 
¶43 The court began by noting that deficiency judgments 
were not available at common law.  Id. at 403.  It added that 
No.  2008AP912 
22 
 
the Wisconsin foreclosure statutes permitted a plaintiff in a 
foreclosure action also to seek a deficiency judgment.  Id.  The 
court explained the relationship between this statutory scheme 
and the common-law rule: 
When a deficiency judgment is entered in a 
foreclosure action, it is a final adjudication of the 
defendant's common-law liability for the debt.  There 
is in reality but one judgment, the judgment of 
foreclosure.  The so-called deficiency judgment is 
merely a completion of the judgment upon the coming in 
and confirmation of the report of sale. 
Id.  The court further noted that the deficiency statute "merely 
permits a combination of two causes of action, one upon the 
note, 
and 
one 
for 
foreclosure, 
with 
certain 
restricting 
provisions."  Id.  Thus, it concluded, the lender was not 
required to seek a deficiency judgment, but once the lender "put 
the note in suit and asserted a personal liability against the 
defendants, he may not again assert that liability in a separate 
action at law."  Id. at 403-04 (emphasis added). 
¶44 Matsen clearly demonstrates the purpose of the phrase 
"personally liable for the debt secured by the mortgage" in Wis. 
Stat. § 846.04.  The statute unites an action in equity on the 
foreclosure with an action in law on the debt.   Thus, it erases 
the common-law distinction that separated a legal action on the 
mortgagor's personal liability from an equitable action on the 
No.  2008AP912 
23 
 
foreclosure itself.10  With the passage of Wisconsin's deficiency 
statute, what normally would have been pursued in a court of 
law——an action to hold the party "personally liable"——could now 
be pursued together with the foreclosure action.11 
¶45 In 
Glover 
v. 
Marine 
Bank 
of 
Beaver 
Dam, 
117 
Wis. 2d 684, 345 N.W.2d 449 (1984), this court again addressed 
the distinction between a mortgagor's obligation to provide 
security and a borrower's personal liability on the underlying 
debt.  In Glover, the mortgagee was given four mortgages on five 
properties to secure two notes.  Id. at 686.  The Glovers argued 
that because the bank foreclosed on only some of the mortgages, 
waiving its right to go after the Glovers personally for any 
deficiency, it actually extinguished the underlying debt.  Id. 
at 690.  The court rejected that argument, holding that "this 
theory confuses the historical distinction between the two 
separate elements of the real estate mortgage——the debt itself 
                                                 
10 Wisconsin Stat. ch. 846 follows the basic rule that a 
judgment on the unpaid balance "ordinarily may be obtained by a 
deficiency decree given by the equity court in the foreclosure 
action itself."  1 Grant S. Nelson & Dale A. Whitman, Real 
Estate Finance Law, § 8.1, at 933-34 (5th ed. 2007) [hereinafter 
Nelson & Whitman]. 
11 The distinction in Farmers & Merchants Bank v. Matsen, 
219 Wis. 401, 263 N.W. 192 (1935), was further explained in 
First Wis. Nat'l Bank of Oshkosh v. Kramer, 74 Wis. 2d 207, 246 
N.W.2d 536 (1976).  In that case, this court held that Matsen 
did not prohibit a bank from proceeding on a guaranty of payment 
while awaiting the resolution of the foreclosure.  Id. at 213. 
The court reached this conclusion, in part, on the grounds that 
the reasoning in Matsen, which pertained to an action on the 
note, did not apply to a separate guaranty of payment.  Id. at 
214-15. 
No.  2008AP912 
24 
 
and the mortgage acting as security for the debt."  Id. at 695.  
Although by statute these two causes of action could be brought 
together, the court concluded "that the historically separate 
treatment of the two elements controls in our interpretation of 
sec. [846.101]."  Id. 
¶46 The 
distinction 
explained 
in 
Glover 
is 
further 
explained by the approach to personal liability taken by the 
Restatement (Third) of Property:  "A mortgage is a conveyance or 
retention of an interest in real property as security for 
performance of an obligation.  A mortgage is enforceable whether 
or not any person is personally liable for that performance."  
Restatement (Third) of Property: Mortgages § 1.1.  Thus, the 
Restatement explains, parties may agree to "nonrecourse" or 
"limited recourse" mortgages, which preclude or limit personal 
liability.  Id., § 1.1 cmt.  It goes on to explain: 
If personal liability is entirely excluded by the 
parties' agreement, the effect is to restrict the 
mortgagee's remedy for nonperformance to foreclosure 
of the mortgage.  Such a restriction or exclusion of 
personal liability does not impair the enforceability 
of the mortgage by means of foreclosure, but it does 
limit or bar the mortgagee's access to both a personal 
judgment 
prior 
to 
foreclosure 
and 
a 
deficiency 
judgment following foreclosure. 
Id. 
¶47 This language suggests that the phrase "personally 
liable for the debt" pertains to those situations in which the 
borrower may be held personally liable for a debt beyond the 
foreclosure on any property that has been mortgaged as security 
for the debt.  It supports our conclusion that "personally 
No.  2008AP912 
25 
 
liable" is a term of art used to distinguish the borrower's 
liability, which is a personal obligation, from the mortgagor's 
liability, which is an obligation limited to the property used 
to secure the note (debt). 
¶48 Our Wisconsin analysis is supported by the approach 
Illinois courts have taken on the subject.  In City of Chicago 
v. Chatham Bank of Chicago, 203 N.E.2d 788 (Ill. App. 1964), the 
Illinois Appellate court interpreted a statute that permitted a 
deficiency judgment against "the persons indicated as being 
personally liable."  Id. at 793.  The court concluded that 
Illinois law clearly prohibited a deficiency judgment against 
the guarantor, and that a guarantor's liability could be 
enforced only through a separate action brought in a court of 
law rather than a court of equity.  Id. 
¶49 In reaching this conclusion, the court relied on the 
traditional rule regarding deficiency judgments: "There is a 
clear and marked distinction between the power of a court of 
equity to decree mortgage foreclosures and its power to enter 
personal deficiency judgments."  Id. at 792 (quoting Schnur v. 
Bernstein, 32 N.E.2d 675, 678 (Ill. App. 1941)).  It noted that 
a court in equity had jurisdiction over foreclosure by its 
equity powers, but had authority over deficiency judgments only 
by virtue of statute.  Id.  Thus, the appellate court concluded: 
"Had the legislature so intended they could very easily with apt 
words have expressed their intention to make guarantors liable 
for a deficiency judgment in a foreclosure action."  Id. at 793. 
No.  2008AP912 
26 
 
¶50 The 
approach 
taken 
in 
Chatham 
illustrates 
the 
traditional distinction between the equitable nature of the 
foreclosure and the legal nature of the deficiency.  See also 
Mortgage Syndicate, Inc. v. Do & Go Equipment, Inc., 286 
N.E.2d 520 (Ill. App. 1972). 
¶51 A similar distinction is encompassed by Wis. Stat. 
§ 846.04, which permits a deficiency judgment within the 
foreclosure action only against parties "personally liable for 
the debt secured by the mortgage."  Wis. Stat. § 846.04(1).  
Under 
§ 846.04(1), 
the 
court 
"shall" 
order 
judgment 
for 
deficiency in the original judgment and separately render it 
upon confirmation of sale.  Id.  In other words, upon 
confirmation of sale, a deficiency judgment against the borrower 
automatically 
follows 
a 
successful 
foreclosure 
action 
by 
operation of law, entirely from within the foreclosure action 
itself.  However, under § 846.04, a judgment against a guarantor 
does not automatically follow a foreclosure judgment.  It must 
be brought as a separate legal cause of action, as was done in 
the instant case.  Thus, while a mortgagee may bring a claim 
against a guarantor as part of the same legal proceeding, it 
must bring a separate cause of action and separately prove the 
guarantor's liability on the contract of guaranty.  
¶52 In sum, the phrase "personally liable for the debt" 
has traditionally been used in foreclosure law to distinguish 
the borrower's liability on the debt, which is a personal 
obligation, 
from 
the 
mortgagor's 
liability, 
which 
is 
an 
obligation limited to the property used to secure the debt.  
No.  2008AP912 
27 
 
Because Wis. Stat. §§ 846.04 and 846.103 use this term of art 
familiar to the law of mortgages, we decline to expand the 
statute's scope beyond the traditional legal meaning of the 
phrase. 
2. 
Nature of the guarantor's liability 
¶53 Our conclusion that the phrase "personally liable for 
the debt secured by the mortgage" does not include guarantors of 
payment is further supported by the principle that a guarantor's 
liability arises not from the debt itself, but from a separate 
guaranty contract.  Therefore, although guarantors of payment 
are personally liable for some amount according to the terms of 
their guaranty contract, they are not personally liable for the 
debt secured by the mortgage. 
¶54 Wisconsin law treats the liability of a guarantor as 
separate and distinct from the liability of the borrower, 
arising not from the debt itself but from the terms of the 
guaranty contract.  In Continental Bank & Trust v. Akwa, 58 
Wis. 2d 376, 206 N.W.2d 174 (1973), a guarantor raised certain 
affirmative 
defenses 
based 
on 
provisions 
of 
the 
Uniform 
Commercial Code (UCC).  This court, relying on a provision of 
the UCC stating that "[n]o person is liable on [a negotiable] 
instrument unless his signature appears thereon," Wis. Stat. 
§ 403.401, explained: 
[The plaintiff] is not proceeding on the Akwa-Downey 
notes 
but 
upon 
a 
breach 
of 
the 
contract 
of 
guaranty. . . .  [A]n action to enforce the liability 
of the guarantor must be in the form of an action for 
damages for a breach of the contract of guaranty, and 
not an action upon the underlying indebtedness.  While 
No.  2008AP912 
28 
 
the 
affirmative 
defenses . . . may 
be 
fatal 
to 
plaintiff's cause of action, if he were proceeding 
upon the instruments, they are not necessarily fatal 
to plaintiff's cause of action upon its separate and 
independent contract of guaranty with the defendants. 
Id. at 387. 
¶55 The reasoning in Akwa directly supports our conclusion 
that guarantors are not "personally liable for the debt secured 
by the mortgage" under Wis. Stat. § 846.103(2).  It articulates 
a clear rule that guarantors are liable only according to the 
terms of their contracts, and are not liable for the debt 
itself.12  This principle is codified in the phrase "personally 
liable for the debt secured by the mortgage."  We see no reason 
to 
believe 
that 
this 
language 
encompasses 
parties 
whose 
liability arises from an independent contract of guaranty. 
¶56 This conclusion is further supported by Kramer.  In 
Kramer, as in this case, a corporation executed a mortgage and 
two individuals guaranteed the amount of the underlying debt.  
Kramer, 74 Wis. 2d at 209.  The bank foreclosed and brought a 
separate action against the guarantors for the deficiency.  Id.  
                                                 
12 The principle articulated in Continental Bank & Trust v. 
Akwa, 
58 
Wis. 2d 376, 
206 
N.W.2d 174 
(1973), 
has 
been 
consistently applied in other cases.  See Cottrell, 94 Wis. at 
179 ("The guarantors are liable only according to the terms of 
their contract."); Klatte v. Franklin State Bank, 211 Wis. 613, 
623, 248 N.W. 158 (1933) ("A guarantor's contract is separate 
and distinct from that of his principal, and he is bound only by 
the terms of his own contract."); Zuehlke v. Engel, 229 
Wis. 386, 392, 282 N.W. 579 (1938) ("[T]he liability of the 
guarantor is upon a separate contract"); Crown Life Ins. Co. v. 
La Bonte, 111 Wis. 2d 26, 32, 330 N.W.2d 201 (1983) ("A 
guarantor's liability depends upon the particular terms of his 
or her engagement. . . .  [T]he important question is: What did 
the parties intend?"). 
No.  2008AP912 
29 
 
The defendants argued that the suit against them personally was 
not timely until an appeal of the foreclosure judgment was 
resolved.  Id.  This court held that "no efforts to collect from 
the . . . corporation or to foreclose under the mortgage were 
necessary as a prerequisite to enforcing the primary liability 
of these guarantors under their individual guaranties of 
payment."  Id. at 212.  We relied on the distinction between a 
guaranty of collection and a guaranty of payment to conclude 
that the bank was entitled to pursue the guarantors under a 
guaranty of payment regardless of what steps were currently 
being taken to foreclose.  Id. at 215. 
¶57 The 
Kramer 
case 
did 
not 
address 
whether 
the 
defendants, as guarantors, were parties "personally liable for 
the debt secured by the mortgage," and could have been included 
in 
the 
foreclosure 
action 
on 
the 
deficiency 
judgment.  
Nonetheless, 
the 
case 
stands 
for 
the 
proposition 
that 
guarantors' liability arises from the guaranty contract, not 
from the debt secured by the mortgage. 
¶58 In this case, the court of appeals reasoned, applying 
Kramer, that the Boyers were "personally liable for the debt 
secured by the mortgage" because they were primarily liable for 
the debt.  It concluded that "[b]ecause they were principal 
obligors and primarily liable for the debts secured by the 
mortgages, it follows that the Boyers were 'personally liable 
for the debts secured by the mortgages,' under Wis. Stat. 
§ 846.103(2)."  Bank Mutual, 316 Wis. 2d 266, ¶16. 
No.  2008AP912 
30 
 
¶59 We disagree.  The court of appeals' reasoning confused 
terms.  Boyer Construction was "personally liable for the debt 
secured by the [five] mortgage[s]."  It was also primarily 
liable for the debt as it was directly responsible for it.  See 
Black's Law Dictionary 933 (8th ed. 2004) ("primary liability" 
is "[l]iability for which one is directly responsible, as 
opposed to secondary liability.").  By contrast, Steven and 
Marcy Boyer were neither "personally liable" nor "primarily 
liable" on the debt because they did not sign the notes secured 
by the mortgages.  However, Steven and Marcy Boyer signed the 
guaranty, a separate contract.  They were "personally liable" on 
this contract of guaranty and primarily liable on it because 
they signed the guaranty.  The Boyers also were primarily liable 
on the guaranty in a temporal sense because Bank Mutual did not 
have to wait for a foreclosure on the mortgages to proceed 
personally against the Boyers.  See Kramer, 74 Wis. 2d at 212. 
¶60 The early Wisconsin cases discuss the distinction 
between a guarantor of collection and guarantor of payment.  As 
we see it, however, when a guarantor's liability arises from a 
completely separate contract of guaranty, the guarantor is not 
"personally liable for the debt secured by the mortgage" and, in 
such a case, neither a guaranty of payment nor a guaranty of 
No.  2008AP912 
31 
 
collection comes within the scope of the redemption statute.13  A 
mortgagee may proceed on a guaranty of payment upon a different 
timeline than it may proceed on a guaranty of collection.  In 
neither case, however, is the guarantor liable for the debt 
secured by the mortgage; rather, the guarantor is liable for 
what he or she agreed to in the guaranty.  
¶61 The Boyers also argue that the phrase "nor separately 
rendered" in Wis. Stat. § 846.103 expands the scope of that 
statute to include guarantors who are liable on a separate 
document.  This phrase, however, merely keeps the language of 
Wis. Stat. § 846.103(2) consistent with that of Wis. Stat. 
§ 846.04(1), which permits a deficiency judgment to be "ordered 
in the original judgment and separately rendered against the 
party liable."  A court may order a deficiency judgment in the 
original foreclosure judgment, but cannot actually render the 
                                                 
13 The court of appeals based its distinction on 38 Am. Jur. 
2d Guaranty § 70 (1999), which provides that "if the guaranty is 
absolute or unconditional, such as a guaranty of payment of a 
promissory note, the guarantor becomes a debtor to the party 
guaranteed (creditor or obligee) and primarily liable when the 
principal obligation has matured and is not performed."    This 
principle, however, still relates only to the timing that the 
mortgagee is required to follow in collecting on the guaranty.  
A lender may pursue a guarantor who is primarily liable before 
exhausting its remedies against the debtor, but it must still 
bring that action on the contract of guaranty, not on the debt 
itself.  This principle must also be considered along with the 
principle that "[b]ecause guaranties are separate contracts, 
collateral to and independent of any underlying agreement, a 
guarantor's rights and liability arises primarily from the 
guaranty agreement itself."  Id., § 2.  Thus, so long as the 
guaranty is made as a separate contract, neither a guarantor of 
payment nor a guarantor of collection is personally liable for 
the debt itself.   
No.  2008AP912 
32 
 
deficiency judgment until after the sale is confirmed.  Glover, 
117 Wis. 2d at 695.14  The phrase "separately rendered," in 
§ 846.103(2) underscores the fact that a deficiency judgment may 
not be rendered in the foreclosure following a shortened 
redemption period, "nor separately rendered" later.  It does not 
refer to a guarantor against whom action may be taken in a 
separate suit or claim on the guaranty.15 
                                                 
14 In Glover v. Marine Bank of Beaver Dam, 117 Wis. 2d 684, 
345 N.W.2d 449 (1984), this court adopted its earlier reasoning 
on this point from Welp v. Gunther, 48 Wis. 543, 4 N.W. 647 
(1880), which was decided when the statute specifically required 
the foreclosure judgment to contain an order directing that a 
deficiency judgment be rendered.  Although the statute had 
changed to its current language by the time Glover was decided, 
we held that the new language described the same procedure.  Id. 
at 696. 
15 The dissent characterizes the judgments in this case as 
the "separately rendered" judgment required under Wis. Stat. 
§ 846.04(1), and therefore treats them as, in fact, deficiency 
judgments.  Dissent, ¶¶111-13.  This argument merges two legally 
distinct conceptions of liability.  The distinction arises not 
from whether a guarantor is "personally liable," but what the 
guarantor is personally liable for.  A debtor is personally 
liable for the debt secured by the mortgage, but a guarantor is 
personally liable only according to the terms of the guaranty.  
See Akwa, 58 Wis. 2d at 387. 
No.  2008AP912 
33 
 
3. 
Interpretation of Anti-Deficiency Statutes in other States 
¶62 Our conclusion that a guarantor's liability under a 
guaranty of payment arises independent of the debt secured by 
the mortgage is supported by courts in other states interpreting 
their anti-deficiency statutes.  Anti-deficiency statutes are 
statutes "enacted to limit the rights of secured creditors to 
recover in excess of the security."  Black's Law Dictionary 918 
(8th ed. 2004).  Anti-deficiency statutes may prohibit the 
mortgagee from obtaining a deficiency in certain situations, 
such as when the sale is by power of foreclosure, the sale 
purchaser is the mortgagee, or the property is a purchase money 
mortgage.16 
                                                                                                                                                             
The dissent, while acknowledging that the guarantors "are 
made liable to the creditor under the terms of their agreement," 
dissent, ¶82 n.2 (emphasis added), proceeds to treat the 
distinction between personal liability on the note and personal 
liability on the guaranty as a matter of form over substance.  
Dissent, ¶112.  This distinction, however, goes directly to the 
substance of the action a mortgagee must bring to collect from a 
guarantor.  The mortgagee may obtain a judgment against the 
debtor upon proof that the debtor has defaulted on the note.  To 
obtain a judgment against a guarantor, however, the mortgagor 
must prove the existence of a guaranty contract and that the 
guarantor is liable under the terms of that contract.  See Akwa, 
58 Wis. 2d at 387.  This fact encapsulates the basic distinction 
between personal liability for the debt secured by the mortgage 
and personal liability under a separate contract of guaranty. 
16 James B. Hughes, Jr., Taking Personal Responsibility: A 
Different 
View 
of 
Mortgage Anti-Deficiency and Redemption 
Statutes, 39 Ariz. L. Rev. 117, 124 (1997).  Wisconsin Stat. 
§ 846.103 is, in a sense, a form of anti-deficiency legislation 
because it limits a mortgagee's right to deficiency in certain 
circumstances.  Wisconsin also has another anti-deficiency 
provision in Wis. Stat. § 846.165(2), which requires foreclosed 
property to be sold at its fair value. 
No.  2008AP912 
34 
 
¶63 Although states have a wide variety of anti-deficiency 
legislation with a wide variety of statutory language, courts 
have generally refused to extend to guarantors the protection of 
such statutes.17  This general pattern is illustrated by Bank of 
Kirkwood Plaza v. Mueller, 294 N.W.2d 640 (N.D. 1980), where the 
defendants unconditionally guaranteed any obligation on a loan 
from a bank to a corporation.  Id. at 641.  The bank foreclosed, 
did not seek a deficiency judgment, and brought a separate suit 
against the guarantors.  Id. at 642.  The North Dakota Supreme 
Court was asked to interpret a statute that permitted mortgagees 
to seek a deficiency judgment against "parties personally liable 
for that part of the debt."  Id. at 643.  The guarantors sought 
protection 
of 
the 
statute, 
which 
limited 
recovery 
in 
a 
deficiency judgment to the difference between the amount of the 
debt and the fair market value of the land.  Id. at 642. 
¶64 The court first distinguished an earlier case in which 
a party, who was not on the mortgage, had signed the note and 
was therefore "personally liable on the debt."  Id. at 643.  The 
court then noted that the liability in the current case was "not 
based on obligations imposed by the notes or the mortgages given 
                                                 
17 Nelson & Whitman, supra, § 8.3 at 951 ("There is some 
judicial predisposition to deny guarantors the protection of 
anti-deficiency legislation."); Restatement (Third) of Property: 
Mortgages, § 8.4 cmt. b at 605 ("There is a substantial body of 
case law that denies guarantors the protection of anti-
deficiency legislation."); CJS Guaranty § 115 ("Generally, the 
protections afforded to debtors under antideficiency legislation 
do not directly protect guarantors from liability for deficiency 
judgments after mortgage foreclosure."). 
No.  2008AP912 
35 
 
to secure the notes, but on a separate and distinct contract of 
guaranty."  Id.  The liability, "although it may result in 
requiring a guarantor to pay the note, is not predicated upon 
'the terms of the instrument,' but upon a contract entirely 
separate and distinct."  Id. (quoting Northern State Bank v. 
Bellamy, 125 N.W. 888, 890 (N.D. 1910)).  The court declined to 
"extend the scope of the anti-deficiency statutes beyond that 
which is clear from the statute."  Id. (citing Fetzer v. Minot 
Park District, 138 N.W.2d 601 (N.D. 1965)).  Finally, concluding 
that "the liability of the guarantors derives wholly from the 
guaranty agreement," the court proceeded to determine liability 
based on the terms of the agreement.  Id. at 643-44. 
¶65 The Mueller court's inquiry into who was "personally 
liable for that part of the debt" is similar to the underlying 
issue in this case.  Like the statute interpreted in Mueller, 
Wis. Stat. § 846.103(2) applies only to those parties personally 
liable for the debt.  Like the guarantors in Mueller, the Boyers 
were not liable according to the terms of the note, but rather 
were liable according to the terms of a wholly separate and 
distinct contract of guaranty. 
¶66 Although Mueller is relevant because of the similarity 
in language between the North Dakota statute in that case and 
the language of Wis. Stat. § 846.103(2), other courts have 
reached 
similar 
conclusions 
based 
on 
different 
statutory 
language. 
 
They 
have 
refused 
to 
extend 
anti-deficiency 
protections on the same grounds on which the court in Mueller 
based its decision: namely, that a guarantor's liability arises 
No.  2008AP912 
36 
 
not from the debt but from a separate guaranty contract.18  
Because this principle applies to § 846.103(2) as well, we find 
the interpretation of anti-deficiency statutes in other states 
persuasive in our interpretation of § 846.103(2). 
D. 
Purposes of the Statute 
¶67 We next turn to the textually and contextually 
manifest purposes of Wis. Stat. § 846.103(2).  See Kalal, 271 
Wis. 2d 633, ¶49.  Interpreting the phrase "personally liable 
for the debt secured by the mortgage" to exclude guarantors 
effectuates the purposes of § 846.103(2). 
                                                 
18 Accordingly, courts "typically reason that the liability 
of a guarantor is based on a separate and distinct contract of 
guaranty and not imposed by the note or the mortgage securing 
it." Nelson & Whitman, supra, § 8.3 at 951.  See Mariners Sav. & 
Loan Assn. v. Neil, 22 Cal. App. 3d 232 (Cal. Ct. App. 1971) 
(Defendant's "obligation on the contract of guarantee was 
separate and distinct from the primary obligation of his 
wife."); Valley Bank v. Larson, 663 P.2d 653, 655 (Id. 1983) 
(approving trial court's conclusion that guarantor could not 
receive 
protection 
of 
time 
limit 
for 
seeking 
deficiency 
judgments 
"because 
his 
obligation 
is 
independent 
of 
the 
principal debtor's."); Riverside Nat'l Bank v. Manolakis, 613 
P.2d 438, 
441 
(Okl. 
1980) 
("A 
guarantor's 
undertaking . . . creates a collateral obligation independent 
and 
separately 
enforceable 
from 
that 
of 
the 
principal 
debtor. . . .  The obligation of a guaranty is contractual, and 
the inquiry must, in each case, focus on the precise terms of 
the guarantor's undertaking——the dimension or breadth of the 
promise.").  In a similar context, the Supreme Judicial Court of 
Massachusetts refused to apply a statute requiring a foreclosing 
mortgagee to give notice to "the holder of a mortgage note or 
other obligation secured by mortgage of real estate" to 
guarantors, on the grounds that "the liability of a guarantor 
does not flow from an 'obligation secured by a mortgage of real 
estate' but is independent of that obligation."  SKW Real Estate 
Ltd. P'ship v. Gold, 702 N.E.2d 1178, 1181 (Mass. 1998). 
No.  2008AP912 
37 
 
¶68 In Glover, the court explained the purposes of Wis. 
Stat. § 846.101.19  Glover addressed the question of whether a 
mortgagee who elected the shortened redemption period under Wis. 
Stat. § 846.101 and waived the right to a deficiency judgment 
was then precluded from satisfying the remainder of the debt by 
foreclosing on other mortgages securing the same debt.  Glover, 
117 Wis. 2d at 687.  Concluding that the mortgagee could collect 
on the remaining mortgages, the court explained the purpose of 
§ 846.101: 
[The statute] obviously benefits the mortgagee, since 
the mortgagee may be able to reduce the losses 
normally attendant to the twelve-month redemption 
period.  However, the mortgagor is also protected, 
because at the end of this shortened period, the 
mortgagor is secure in the knowledge that he or she 
will not be responsible for any deficiency resulting 
from the sale. 
Id. at 694-95. 
¶69 The court confirmed its explanation of the purpose 
behind Wis. Stat. § 846.101 by examining legislative history: 
The language prefacing the enactment of [sec. 
846.101], evinces an attempt by the legislature to 
shorten the period of redemption in a complicated and 
costly time-consuming process.  Likewise, it evinces a 
concern for the protection of the mortgagor, who is 
not allowed the usual twelve-month period in which to 
redeem. This protection comes in the form of a waiver 
of personal deficiency by the mortgagee. 
Id. at 699. 
                                                 
19 Wisconsin Stat. § 846.101 is analogous to Wis. Stat. 
§ 846.103, because it contains some of the same language but 
applies to different classes of property with different periods 
of redemption. 
No.  2008AP912 
38 
 
¶70 Including guarantors within the class of parties 
"personally liable for the debt secured by the mortgage" would 
not further either of the two statutory purposes articulated in 
Glover.  First, it would both lengthen and complicate the 
redemption process.  More banks would opt for the standard 
redemption period to ensure that they would be able to collect 
against their guarantors.  Second, it would do little to protect 
mortgagors and could even harm them because banks might limit 
their lending to loans that could be provided without the extra 
assurance of a guarantor, or opt for the standard redemption 
period, leaving the mortgagor open to liability for a deficiency 
judgment.  Neither of these results is consistent with the 
statute's goal of expediting the foreclosure process while 
protecting the rights of the mortgagor. 
¶71 The 
approach 
taken 
by 
other 
jurisdictions 
also 
provides guidance on how best to further the intended purpose of 
Wis. Stat. § 846.103.  A number of courts have reasoned that the 
protections of anti-deficiency statutes should not be extended 
to guarantors because the statutes are intended to protect 
No.  2008AP912 
39 
 
borrowers.20  Their reasoning has generally followed this basic 
pattern: 
[The] 
denial 
of 
protection 
to 
guarantors 
often 
involves "purchase money" anti-deficiency legislation, 
"one-action" rules, and prohibitions of deficiency 
judgments after power of sale foreclosure.  [These] 
statutes 
are 
aimed 
primarily 
at 
protecting 
debtors. . . .  
[By 
contrast,] 
[f]air 
value 
legislation is primarily aimed at preventing the 
unjust enrichment of the mortgagee and the extension 
of "fair value" protection to guarantors clearly 
serves that purpose. 
Restatement (Third) of Property: Mortgages, § 8.4, cmt. b. at 
605. 
¶72 Like the anti-deficiency legislation in other states, 
the deficiency-waiver provision in Wis. Stat. § 846.103(2) is 
designed to protect borrowers.  We see no indication that the 
provision of § 846.103(2) seeks to prevent unjust enrichment of 
the mortgagee, as this purpose is already served by the fair 
value requirement of Wis. Stat. § 846.165(2).21  Thus, the 
                                                 
20 See Long v. Corbet, 888 P.2d 1340, 1345 (Ct. App. Ariz. 
1994) (describing the purpose of anti-deficiency statute as 
"protect[ing] certain homeowners from the financial disaster of 
losing their homes to foreclosure plus all their other nonexempt 
property on execution of a judgment for the balance of the 
purchase price"); Nat'l City Bank of Minneapolis v. Lundgren, 
435 N.W.2d 588, 592 (Minn. App. 1989) (refusing to apply a 
statute 
that 
was 
not 
expressly 
limited 
to 
mortgages 
to 
guarantors based on the legislative purpose of protecting "the 
people foreclosed"); Machock v. Fink, 137 P.3d 779, 784 (Utah 
2006) (refusing to apply a "one-action" rule to guarantors 
because it would not further the purpose of eliminating 
harassment of debtors or multiple litigation against debtors). 
21 Section 846.165(2) provides: 
In case the mortgaged premises sell for less than 
the amount due and to become due on the mortgage debt 
No.  2008AP912 
40 
 
decisions of other states not to extend the protections of anti-
deficiency statutes support our decision not to extend the 
protections of § 846.103(2) to guarantors in a fashion that 
would not further the statute's purposes. 
¶73 Bank Mutual argues that Wis. Stat. § 846.103(2) does 
not include guarantors because the purpose of the statute is to 
address redemption rights, an argument that was rejected by the 
court of appeals.22  Although § 846.103 connects the deficiency 
waiver and the shortened redemption period, it does not limit 
the waivers to those with a right to redeem.  The phrase 
"personally liable for the debt secured by the mortgage," by its 
very terms, contemplates the distinction between the borrower's 
personal obligation and the mortgagor's obligation to provide 
security for the debt.  A person has the right to redeem 
                                                                                                                                                             
and costs of sale, there shall be no presumption that 
such premises sold for their fair value and no sale 
shall 
be 
confirmed 
and 
judgment 
for 
deficiency 
rendered, until the court is satisfied that the fair 
value of the premises sold has been credited on the 
mortgage debt, interest and costs. 
22 The court of appeals reasoned that the difference in 
language between the class of persons against whom deficiency is 
waived (parties "personally liable for the debt secured by the 
mortgage") and the class of persons who can redeem ("the 
mortgagor, the mortgagor's heirs, personal representatives or 
assigns") indicated that the two classes were not coterminous.  
Bank Mutual, 316 Wis. 2d 266, ¶12 n.4. 
No.  2008AP912 
41 
 
property only if he has some kind of interest in the property.23  
The person may be personally liable for a debt secured by a 
mortgage, but may not have a right to redeem if the debt was 
secured by another person's property.  On the other hand, a 
mortgagor, who has a right to redeem, may not necessarily be 
personally liable for the underlying debt.24 
¶74 Although the deficiency-waiver provision of Wis. Stat. 
§ 846.103(2) is not limited to those who have redemption rights, 
guarantors 
possess 
neither redemption rights nor personal 
liability on the underlying debt.  That the statute does not 
limit its protections to those with a right to redeem does not 
support the conclusion that guarantors are parties personally 
liable for the debt.  Guarantors are in a significantly 
different position from both borrowers and persons with a right 
to 
redeem, and are therefore outside the scope of the 
protections contained in Wis. Stat. § 846.103(2). 
¶75 Finally, our interpretation of Wis. Stat. § 846.103(2) 
leads to a more reasonable and sensible result than an 
                                                 
23Under 
Wis. 
Stat. 
§ 846.13, 
"[t]he 
mortgagor, 
the 
mortgagor's heirs, personal representatives or assigns may 
redeem the mortgaged premises."  The common thread among these 
parties is that they all have an interest in the property, and 
therefore Wisconsin law accords with the general rule that "only 
those with an interest in the property that will be prejudiced 
by foreclosure can redeem."  Nelson & Whitman, supra, § 7.2 at 
773. 
24 This may occur if a purchaser takes title to property 
subject to a mortgage without assuming the underlying debt.  
See, e.g. Cassidy v. Bonitatibus, 473 A.2d 350, 351 (Conn. 
1984).  It may also occur in the case of a "non-recourse" 
mortgage.  Restatement (Third) of Property: Mortgages § 1.1 cmt. 
No.  2008AP912 
42 
 
interpretation that would require a mortgagee to waive judgment 
of deficiency against a guarantor.  In Glover, we relied on this 
principle when interpreting Wis. Stat. § 846.101: 
Not allowing the Bank to foreclose upon the 
remaining mortgages would in essence deprive the Bank 
from realizing upon the security on which it initially 
based its decision to extend the loan.  It would also 
provide a windfall to the mortgagors.  However, in 
order to protect the mortgagor in situations where the 
mortgagee 
does 
not foreclose upon all mortgages 
securing the debt in one proceeding, we hold that the 
mortgagee 
waives 
personal 
deficiencies 
upon 
the 
completed sale of all of the remaining properties. 
Glover, 117 Wis. 2d at 699. 
¶76 The 
reasoning 
espoused 
in 
Glover 
is 
directly 
applicable here.  If Wis. Stat. § 846.103(2) requires a waiver 
of deficiency against a guarantor, mortgagees would be deprived 
of some of the security they relied upon for their loan——not the 
security provided by the mortgage, but the security provided by 
the guaranty.  Such an interpretation would also result in a 
windfall to the guarantor, who would be relieved of liability 
under the guaranty without paying the obligation set out in the 
guaranty.  We conclude that the legislature did not intend such 
a result when it enacted Wis. Stat. § 846.103(2). 
IV. CONCLUSION 
¶77 We conclude that a mortgagee foreclosing under the 
shortened 
redemption 
period 
provided 
for 
by 
Wis. 
Stat. 
§ 846.103(2) does not forfeit the right to obtain a judgment 
against a guarantor of payment even though it must waive its 
right to collect any deficiency from the debtor.  We reach this 
No.  2008AP912 
43 
 
conclusion on the grounds that guarantors are not parties 
"personally liable for the debt secured by the mortgage."  This 
statutory 
phrase 
is 
used 
in 
Wis. 
Stat. 
§ 846.103(2) 
to 
distinguish a borrower's liability on the debt, which is a 
personal obligation, from the mortgagor's liability, which is an 
obligation limited to the property given as security for the 
note.  The statute does not contemplate guarantors whose 
liability arises not from the debt but from a separate contract.  
We also conclude that the manifest purpose of the statute is not 
furthered by requiring a mortgagee to forfeit judgment against a 
guarantor of payment when proceeding under the shortened 
redemption period of Wis. Stat. § 846.103(2).25 
¶78 Here, the Boyers signed a guaranty to pay any and all 
debts of Boyer Construction.  The guaranty was both broad and 
explicit.  It was not tied to a specific debt.  While it 
ultimately rendered the Boyers liable for the amount of the debt 
secured by the mortgage, it did not render them liable for the 
debt itself.  Accordingly, the Boyers were not "personally 
liable for the debt secured by the mortgage" within the meaning 
of Wis. Stat. § 846.103(2), and we conclude that Bank Mutual did 
                                                 
25 The dissent argues that if a guarantor has recourse 
against a debtor, our interpretation "risks defeating [the] very 
purpose of the statute" and "opens the door to more litigation."  
Dissent, ¶127.  The guarantors in this case (the Boyers) did not 
seek recourse against the debtor (S.J. Boyer).  Neither party 
briefed the issue of whether guarantors may seek recourse 
against a debtor because that issue simply has nothing to do 
with this case.  We decline to base our interpretation of the 
statute upon on speculation that this issue may arise in a 
future case.  
No.  2008AP912 
44 
 
not forfeit its right to obtain a judgment against the Boyers by 
proceeding under the shortened redemption period provided by 
that statute. 
¶79 For these reasons, we conclude that the court of 
appeals erred when it concluded that the circuit court applied 
an improper standard of law by denying the Boyers relief under 
Wis. Stat. § 806.07.  The circuit court appropriately exercised 
its discretion by refusing to relieve them of the judgment. 
¶80 Because we conclude that Wis. Stat. § 846.103(2) does 
not require a mortgagee to waive judgment against a guarantor of 
payment when it elects a shortened redemption period, we decline 
to address whether the Boyers waived any rights provided by the 
statute. 
By the Court.—The decision of the court of appeals is 
reversed. 
¶81 ANNETTE KINGSLAND ZIEGLER, J., did not participate. 
 
 
 
No.  2008AP912.ssa 
 
1 
 
 
¶82 SHIRLEY S. ABRAHAMSON, C.J.   (dissenting).  This case 
raises a question of statutory interpretation in the context of 
commercial lending.  It arises in the context of Wisconsin 
statutes governing mortgage proceedings, but the case is also 
enmeshed in the "hoary and distinctive body of law"1 that governs 
suretyship and guaranty relationships.2  
                                                 
1 Frank S.H. Bae & Marian E. McGrath, The Rights of a Surety 
(Or Secondary Obligor) Under the Restatement of the Law, Third, 
Suretyship and Guaranty, 122 Banking L. J. 783, 783 (2005) 
(quoting Donald J. Rapson, History and Background of the 
Restatement of Suretyship, 34 Wm. & Mary L. Rev. 989, app. B 
(1993). 
2 Various authorities use the terms "guaranty" and "surety" 
to describe similar kinds of relationships and obligations.  
Here the agreement in question is termed a guaranty and I follow 
that terminology.  The relevant rules of law do not depend on 
the label which is applied. 
"There is still considerable dispute about the distinction 
between a surety and a guaranty."  Bae & McGrath, supra note 1, 
at 786.  The Restatement (Third) of Suretyship and Guaranty 
sensibly resolves this confusion by taking a unified and 
functional approach, referring to "obligors" and "obligees."  In 
the Restatement, the principal obligor is the debtor.  Section 
1, cmt. c. of the Restatement notes that differences between 
sureties and guaranties "have been the subject of extended 
debate, not all of which is illuminating.  A 'surety' is 
typically jointly and severally liable with the principal 
obligor on an obligation to which they are both bound, while a 
'guarantor' typically contracts to fulfill an obligation upon 
the default of the principal obligor.  The provisions of a 
particular guaranty or suretyship contract, however, will often 
blur much of this distinction."  Black's Law Dictionary (8th ed. 
2004), in defining "surety," asserts, "A surety differs from a 
guarantor, who is liable to the creditor only if the debtor does 
not meet the duties owed to the creditor; the surety is directly 
liable."   
No.  2008AP912.ssa 
 
2 
 
¶83 The majority opinion resolves this case with a narrow 
focus, looking at a portion of the immediate statutory language 
at issue without an eye to the broader foreclosure scheme in 
which the case unfolds and without addressing the law governing 
the relationships and obligations among creditors, debtors, and 
guarantors. 
¶84 As one commentary notes, "[D]espite its long history, 
suretyship is an area of the law that has received scant 
attention in recent years . . . . [E]xcept for those who work in 
commercial lending or the issuing of contract bonds, most 
attorneys remain unaware of even the basics . . . ."3  This court 
has 
seldom 
been 
asked 
in 
recent 
years 
to 
unravel 
the 
complexities of the law involving guarantors.  Although the 
Restatement (Third) of Surety and Guaranty was published in 1996 
and offers a potentially invaluable tool to clarify and 
modernize the law, it appears that the Restatement (Third) has 
                                                                                                                                                             
Wisconsin case law, however, has drawn essentially this 
same 
functional 
distinction 
by 
distinguishing 
between 
a 
"guaranty of payment" and a "guaranty of collection."  See 
Schlesinger v. Schroeder, 210 Wis. 403, 406-07, 245 N.W. 666 
(1932) (under a guaranty of payment, "[t]here is no obligation 
on the part of the creditor to proceed against the principal 
debtor, and if the latter fails to pay, an action may generally 
be maintained against the guarantor, without a demand or legal 
proceedings against the principal.  Nor is a creditor, before 
proceeding against the guarantor, under any legal obligation to 
resort to securities given by the principal debtor."). 
Regardless of the choice of terms employed, as discussed 
below, see ¶6 & n.6, ¶9, the guarantors in this case are made 
liable to the creditor under the terms of their agreement 
without requiring prior collection or action against the 
principal debtor. 
3 Bae & McGrath, supra note 1, at 783. 
No.  2008AP912.ssa 
 
3 
 
never been referenced by this court and the majority does not 
address it in the present case.4   
¶85 In my view, this case can not be resolved properly 
without addressing the law governing guarantors.  Because the 
majority does not address this area of the law, it leaves 
important issues unresolved or resolves them without a view to 
the implications for future cases.  By failing to consider 
carefully 
the 
interrelationship between the law governing 
guarantors and the foreclosure statute it interprets, the 
majority has, in my view, reached the wrong result in this case. 
¶86 Wisconsin Stat. § 846.103(2), protects those who are 
"personally liable for the debt secured by the mortgage" against 
a "judgment for any deficiency which may remain due to the 
plaintiff" following a foreclosure sale.  The question in this 
                                                 
4 The court of appeals referenced the Restatement (Third) in 
Insurance Co. of North America v. DEC International, Inc., 220 
Wis. 2d 840, 849-51, 586 N.W.2d 691 (Ct. App. 1998).  An 
unpublished circuit court decision also referenced Section 48 of 
the Restatement (Third).  See M&I Marshall & Ilsley Corp. v. 
Hougard, unpublished slip op., No. 03-CV-1039, 2004 WL 3252086 
(Cir. Ct. Brown Co. May 13, 2004) ("[T]he Wisconsin Courts are 
in accord with the Restatement  3rd, Section 48").  These cases 
appear to be the only readily discoverable citations to the 
Restatement (Third) in the Wisconsin courts. 
The Reporter for the Restatement commented at the time the 
Restatement was being drafted that the most recent treatises on 
suretyship dated to 1950 and 1951.  Neil B. Cohen, Striking the 
Balance: The Evolving Nature of Suretyship Defenses, 34 Wm. & 
Mary L. Rev. 1025, 1025-26 & n.1 (1993) (citing Arthur A. 
Stearns, The Law of Suretyship (5th ed. 1951); Laurence P. 
Simpson, Handbook on the Law of Suretyship (1950)). 
For more recent texts on suretyship, see Peter A. Alces, 
The Law of Suretyship and Guaranty (1996); The Law of Suretyship 
(Edward G. Gallagher ed., 2d ed. 2000). 
No.  2008AP912.ssa 
 
4 
 
case is whether this provision protects the guarantors sued by 
the creditor, in addition to protecting the debtor.   
¶87 It is undisputed that guarantors are liable according 
to the terms of their guaranty contract, which in the present 
case is a guaranty of payment, not a guaranty of collection.5  
The majority opinion parlays this truth to mean that guarantors 
do not come within the statutory phrase "personally liable for 
the debt"6 and therefore, according to the majority opinion, are 
"not members of the class of persons against whom a mortgagee 
must waive judgment" when the mortgagee elects to proceed under 
the shortened redemption period allowed under Wis. Stat. 
                                                 
5 See supra note 2; First Wis. Nat'l Bank of Oshkosh v. 
Kramer, 74 Wis. 2d 207, 246 N.W.2d 536 (1976). 
6 The guaranty in the present case explicitly states that 
the guarantors remain liable to the Bank even though any 
obligation is invalid or unenforceable against any debtor.  The 
guaranty provides:  "This guaranty is valid and enforceable 
against the undersigned [guarantors] even though any Obligation 
is invalid or unenforceable against any Debtor."  This language 
appears to state that as between the guarantor and the creditor, 
the guarantor will not impose defenses the debtor may have 
against the creditor regarding the validity of the debtor's 
obligation.  In other words, the guarantor waives defenses.  In 
other provisions of the guaranty, the guarantor consents in 
advance to various acts the creditor and debtor may perform.  
The effect of these provisions is to render the guarantor liable 
even when the guarantor's risk is increased by the debtor and 
creditor.  
The question before the court is whether Wis. Stat. 
§ 846.103(2), which protects those who are "personally liable 
for the debt" against a deficiency judgment, trumps the waiver 
and consent language in the guaranty and protects guarantors 
against suit by the creditor on the guaranty.  The majority 
opinion in effect holds that the waiver and consent language of 
the guaranty trumps Wis. Stat. § 846.103(2). 
No.  2008AP912.ssa 
 
5 
 
§ 846.101.  See majority op., ¶3.  Here's where I part company 
with the majority. 
¶88 To honor the common and ordinary meaning of the 
statutory language and to effectuate the purpose and intent of 
the statute, I conclude that the guarantors under the guaranty 
in the present case are within "the class of persons against 
whom a mortgagee must waive judgment when invoking Wis. Stat. 
§ 846.103(2)."  The guarantors are, in my view, "personally 
liable for the debt secured by the mortgage" within the 
operation of Wis. Stat. § 846.103(2). 
I 
¶89 I agree with the court of appeals that as a matter of 
law the guarantors are personally liable for the debt.7   
¶90 As guarantors of payment, the guarantors in the 
present case are, under Wisconsin law, primarily liable for the 
payment of the debt secured by the mortgage.8  Majority op., ¶59.  
The Bank need not make any effort to collect the debt from the 
debtor or against the collateral before proceeding against the 
guarantor.  Rather, the Bank can seek payment from the guarantor 
first, directly and with or without any action against the 
debtor.9  There is only one source of debt underlying this case, 
                                                 
7 Bank Mut. v. S.J. Boyer Constr., Inc., 2009 WI App 14, 
¶15, 316 Wis. 2d 266, 762 N.W.2d 826 ("Given the effect of the 
guaranty of payment, we conclude the Boyers were personally 
liable for the debts secured by the mortgages.")  
8 Kramer, 
74 
Wis. 2d at 
212 
(the 
guarantors 
"are 
individually liable as principals"). 
9 Id. 
No.  2008AP912.ssa 
 
6 
 
the debt due on the five notes secured by the mortgages.  There 
is likewise no dispute that the money judgments entered against 
the guarantors correspond to the amount owing on this same debt, 
and there is no dispute that the guarantors are personally 
liable for payment of any unpaid portion of that debt. 
¶91 Nevertheless, the majority insists that the guarantors 
are not "personally liable" for this debt within the meaning of 
Wis. Stat. § 846.103(2).   
¶92 The majority opinion reaches this counterintuitive 
result by elevating form over substance, repeatedly asserting  
that the guarantors are liable on the guaranty, not for the 
underlying debt itself.  I agree with the majority opinion that 
the guarantors' liability for the debt of the debtor is based on 
the guaranty.  But the substantive effect of the guaranty is to 
render the guarantors personally obligated to pay the debt 
secured by the mortgage.   
¶93 I agree with the court of appeals that as a matter of 
law the guarantors are personally liable for the debt. 
II 
¶94 The common and ordinary definition of the statutory 
phrase "personally liable for the debt secured by the mortgage" 
includes guarantors.  The majority opinion, ¶39, effectively 
admits as much, conceding that the phrase "does not clearly 
exclude guarantors" and that "reasonable people could read the 
language to cover the Boyers."  The court of appeals similarly 
concluded that "nothing in the plain language of the phrase 
No.  2008AP912.ssa 
 
7 
 
categorically 
excludes 
guarantors 
of 
a 
debt 
from 
being 
personally liable."  
¶95 Unless there is a good reason to interpret a statute 
other than by using the ordinary meaning of words, a statute 
should be interpreted in the way that lawyers and non-lawyers 
who read the statute will understand it without examining 
multiple other authorities.   
¶96 Black's 
Law 
Dictionary 
(8th 
ed. 
2004) 
defines 
"personal liability" to mean "[l]iability for which one is 
personally accountable and for which a wronged party can seek 
satisfaction out of the wrongdoer's personal assets."  No one 
contests that the liability of the guarantors in the present 
case is "personal liability" in this sense.  Indeed, the whole 
point of requiring the personal guaranty of the principals or 
owners of a corporation is that those individuals will be 
personally liable to repay the debts of the corporation.10 
¶97 The majority departs from the dictionary approach (an 
approach 
favored 
by 
this 
court) 
and 
treats 
the 
phrase 
"personally liable for the debt secured by the mortgage" as "a 
legal term of art," susceptible of a special meaning "in the 
context of foreclosure law."11   
                                                 
10 The brief of the Wisconsin Bankers Association as amicus 
curiae states on page 1, "The situation presented in the Bank 
Mutual case is typical.  A lender makes a loan to a small or 
medium sized business, often a closely-held corporation or 
limited liability company, secured by a mortgage on real estate 
owned by the principal borrower.  Often the lender will also 
require the personal guaranties of the principals of the 
business to further support the loan and protect the lender." 
11 Majority op., ¶¶39, 41. 
No.  2008AP912.ssa 
 
8 
 
¶98 The majority therefore sets out to determine the 
"specific legal meaning" of the words "personally liable," an 
endeavor that involves reading Wisconsin and Illinois cases and 
numerous other legal authorities.  Majority op., ¶¶41-52.  I 
would 
take 
a 
shorter 
and 
simpler 
route 
of 
statutory 
interpretation in the instant case.   
¶99 Mortgages and guaranties are the everyday business of 
lenders and borrowers.  Some persons are represented by lawyers 
when signing mortgages and guaranties, many are not.  Lawyers 
and non-lawyers alike ought to be able to read and understand 
Wis. Stat. § 846.103(2) without going outside the statute books 
to determine whether words that have a common, ordinary meaning 
take on a "specific legal meaning" when interpreted by reference 
to other authorities.  The common and ordinary understanding of 
the statutory language is that guarantors are personally liable 
for the debt secured by the mortgage.  I would adopt that 
understanding. 
III 
¶100 The statutory phrase "personally liable for the debt 
secured by the mortgage" is used in three statutory provisions 
in chapter 846:  Wis. Stat. §§ 846.04, 846.101, and 846.103(2).  
Section 846.04 governs a complaint seeking foreclosure and any 
deficiency that may remain due the plaintiff "against every 
party who is personally liable for the debt secured by the 
mortgage."  Section 846.101 and § 846.103(2), the statute at 
issue here, are similar provisions applicable to different types 
No.  2008AP912.ssa 
 
9 
 
of property; each provides for foreclosure with a shortened 
redemption period but without deficiency.   
¶101 I agree with the majority opinion that the same 
statutory language in each of these statutes should be given a 
consistent meaning.  But I depart from the majority's analysis 
and conclusion on this point.  
¶102 The majority attempts to determine the meaning of the 
phrase "personally liable for the debt secured by the mortgage" 
in § 846.103(2) by examining the same phrase in Wis. Stat. 
§ 846.04 but comes up empty-handed.  Majority op., ¶¶32-38.  The 
majority's analysis of Wisconsin cases cannot determine what the 
phrase means in § 846.04 and concedes that the law reveals 
"inconsistent results."  Majority op., ¶38.  The majority's own 
review of the law therefore seems to conflict with its premise 
that the phrase "personally liable" as used in Wis. Stat. 
§§ 846.04 and 846.103(2) is a term of art embodying a single, 
pre-existing "specific legal meaning."  Majority op., ¶39. 
¶103 The majority therefore resolves the meaning of the 
phrase "personally liable for the debt secured by the mortgage" 
first by even further narrowing its focus to examine only the 
words "personally liable," eventually turning to Illinois law, 
relying on City of Chicago v. Chatham Bank of Chicago, 203 
N.E.2d 788 (Ill. App. 1964) to inform its definition of 
"personally liable" in the Wisconsin statutes.  Majority op., 
¶¶48-50.   
¶104 The majority's reliance on the Chatham case is 
misplaced.  The reasoning of the Chatham case rests on two 
No.  2008AP912.ssa 
 
10 
 
factors that do not bear on the resolution of the present case: 
(1) the language and interpretation of the Illinois statute, and 
(2) an outmoded jurisdictional distinction in Illinois between 
judgments entered in law and in equity. 
¶105  The Illinois foreclosure statutes allowed "a personal 
deficiency decree against the persons indicated as being 
personally liable therefor . . . ."  Chatham, 203 N.E.2d at 793.  
A long line of Illinois cases established that a guarantor could 
not be joined in the action of foreclosure and the equitable 
remedy of a deficiency decree could not be entered against the 
guarantor in a foreclosure action.  Rather, the liability of the 
guarantor "was a purely legal liability, enforceable only in a 
court of law."12  Therefore the established law of Illinois was 
that "the Circuit Court sitting in chancery" lacked jurisdiction 
to render a deficiency judgment against the guarantor.13  Chatham 
simply applied long-standing Illinois case law to hold that a 
guarantor cannot be sued "in a foreclosure action."14   
                                                 
12 City of Chicago v. Chatham Bank of Chicago, 203 
N.E.2d 788, 
792 
(Ill. 
App. 
1964) 
(relying 
on 
Schnur 
v. 
Bernstein, 32 N.E.2d 675 (Ill. App. 1941); Walsh v. Van Horn, 22 
Ill. App. 170 (1887). 
13 Chatham, 203 N.E.2d at 792 (quoting Schnur v. Bernstein, 
32 N.E.2d 675 (Ill. App. 1941). 
14 Since Chatham was decided, Illinois law appears to have 
abolished 
the 
distinction 
between 
law 
and 
equity 
while  
maintaining an administrative division between chancery and law 
courts: 
"[T]he Judicial Article embodied in the Illinois 
Constitution 
of 
1970 
has 
abolished 
the 
distinction between courts of law and equity so that 
our State's circuit courts have 'original jurisdiction 
of all justiciable matters.' . . . "  
No.  2008AP912.ssa 
 
11 
 
¶106 Wisconsin law governing foreclosure and deficiency is 
not the same as Illinois law.  Law and equity jurisdiction are 
merged in Wisconsin, and Wis. Stat. § 846.04 provides a more 
flexible foreclosure action than the Illinois law reviewed in 
Chatham.   
¶107 In Wisconsin, a plaintiff in a foreclosure action may 
"demand judgment for any deficiency that may remain due the 
plaintiff after sale of the mortgaged premises against every 
party who is personally liable for the debt secured by the 
mortgage."  Wis. Stat. § 846.04(1).  Indeed in the present case 
the Bank brought a single action seeking both foreclosure and a 
judgment against the guarantors.15  This procedure is consistent 
with the majority's reading of the deficiency statute, which the 
                                                                                                                                                             
 
. . . . 
Since jurisdiction over the cause of action was vested 
generally in the circuit courts, which are organized 
and 
divided 
for 
administrative 
convenience, 
the 
transfer of the equitable cause of action from the 
Chancery Division to the Law Division does not limit 
the remedy available to one at law.  Equitable relief 
is available even though the case is in the Law 
Division.  No error resulted from the transfer of the 
plaintiffs' claim. 
Kaplan v. Keith, 377 N.E.2d 279, 282 (Ill. App. 1978) 
(quoted source omitted). 
The majority does not address whether the law/equity 
distinction 
underlying 
the 
Chatham 
case 
still 
provides 
principled reasoning in Illinois.  No such jurisdictional 
distinction affects the resolution of the present case in 
Wisconsin courts.  
15 See also Bank of Sun Prairie v. Marshall Dev. Co., 2001 
WI App 64, ¶2, 242 Wis. 2d 355, 626 N.W.2d 319 (mortgagee sued 
guarantor (as well as debtor) in foreclosure/deficiency action). 
No.  2008AP912.ssa 
 
12 
 
majority acknowledges "permits a combination of two causes of 
actions" and "unites an action in equity on the foreclosure with 
an action in law on the debt."  Majority op., ¶¶43-44 (quoting 
and explaining Farmers & Merchants Bank v. Matsen, 219 Wis. 401, 
263 N.W. 192 (1935)).   
¶108 The majority conclusorily treats the operation of the 
deficiency provisions as extending to the debtor but not to the 
guarantor.  See majority op., ¶51.16  But in Wisconsin, in 
contrast to Illinois, a guarantor can be made a party in a 
foreclosure/deficiency action.17  The present case illustrates 
that the mortgagee may proceed under Wis. Stat. § 846.04, 
bringing interdependent claims both for foreclosure and for a 
money judgment against a guarantor for any amount still owing.  
Here, the claim against the guarantors, brought together with 
the foreclosure action, was for the "amounts alleged owing" on 
the notes secured by the mortgages.  Neither statutory procedure 
                                                 
16 The majority argues that Wis. Stat. § 846.04 "permits a 
deficiency judgment within the foreclosure action" only against 
the borrower.  Majority op., ¶51.  This argument simply applies 
the conclusion that the majority has already reached to 
§ 846.04. 
 
It 
does 
not 
provide 
any 
additional 
argument 
supporting the majority's unpersuasive conclusion that the 
guarantors are not among the parties "personally liable for the 
debt secured by the mortgage." 
17 "Thus, while a mortgagee may bring a claim against a 
guarantor as part of the same legal proceeding, it must bring a 
separate cause of action and separately prove the guarantor's 
liability on the contract of guaranty."  Majority op., ¶51.  
In Wisconsin, the mortgagee has a choice whether to seek 
payment from a guarantor in the foreclosure action or to bring a 
separate action.  See majority op., ¶56. 
No.  2008AP912.ssa 
 
13 
 
nor a distinction between law and equity jurisdiction requires 
these claims to be brought separately in Wisconsin. 
¶109 Under 
the 
Wisconsin statutes, the "judgment for 
deficiency" is to be both ordered as part of the "original 
[foreclosure] judgment" and also "separately rendered against 
the party liable."  Wis. Stat. § 846.04(1).   
¶110 And in fact separate judgments were rendered in the 
present case:  A foreclosure judgment was entered on the five 
mortgaged properties; a separate judgment for the total amount 
owing on the notes was entered against Steven Boyer as 
guarantor; and a similar default judgment was entered for the 
same amount against Marcy Boyer as guarantor.  See majority op., 
¶9.  No judgment for the amount due on the notes was separately 
rendered against Boyer Construction, the debtor.   
¶111 The present case, in contrast to the Illinois law 
relied upon by the majority, therefore illustrates that there is 
no procedural or jurisdictional bar in Wisconsin to seeking 
judgment for the amount owed by a guarantor in the same suit in 
which foreclosure is sought under Wis. Stat. § 864.04.   
¶112 Taking a realistic view of the situation, what is at 
stake in the single foreclosure suit brought by the plaintiff in 
the instant case is a deficiency judgment, whether the judgment 
is entered under the foreclosure causes of action or "separately 
rendered" under the interdependent cause of action brought 
against the guarantors.  To say that the judgment sought against 
the guarantors is not a deficiency judgment would only further 
elevate form over substance.   
No.  2008AP912.ssa 
 
14 
 
¶113 Thus I conclude that the guarantors in the present 
case are "part[ies] personally liable for the debt secured by 
the mortgage" under both Wis. Stat. § 846.04 and § 846.103(2).  
¶114 The 
majority 
focuses 
its 
analysis 
narrowly 
on 
interpreting the phrase "personally liable."  See majority op., 
¶¶41-47.  The circuit court in the instant case noted that "in a 
lot of ways that's what this case comes down to[,] . . . that 
the damages act as a deficiency.  I guess that's the question.  
Do they act as a deficiency."  The majority focuses on the 
question of whether the guarantor is "personally liable" for the 
debt in this case and does not take up the intertwined question 
of whether the judgment from which the defendants seek relief 
qualifies as a "judgment for any deficiency" under Wis. Stat. 
§§ 846.04(1) and 846.103(2).   
¶115 The majority does not take a realistic view of the 
situation in the present case and relies on foreign law that 
presupposes both a narrower statutory remedy than applies here 
and a delineation of law and equity jurisdiction which no longer 
has any force.   
¶116 By contrast, I conclude that the guarantors in the 
present case are "part[ies] personally liable for the debt 
secured by the mortgage" under both Wis. Stat. § 846.04 and 
§ 846.103(2).   
¶117 To proceed in this suit under the shortened redemption 
period allowed by Wis. Stat. § 846.103(2), the plaintiff must 
waive judgment for the amount of deficiency against "every party 
who is personally liable for the debt secured by the mortgage," 
No.  2008AP912.ssa 
 
15 
 
and 
"no 
judgment 
for 
deficiency 
may 
be . . . separately 
rendered" against such parties.  Reading Wis. Stat. § 846.103(2) 
together with Wis. Stat. § 846.04(1) and applying the statutes 
to the facts of the present case, I conclude that the Bank was 
required to waive the right to have a judgment for the amount of 
deficiency entered against the guarantors when it elected to 
proceed under Wis. Stat. § 846.04(1).   
IV 
¶118 The majority does not reckon with the body of law 
governing 
guarantors 
in 
Wisconsin. 
Critical 
questions 
implicating surety and guaranty law are raised but unanswered by 
the majority.  The questions the majority leaves open under 
guaranty 
law 
raise 
serious 
misgivings 
about 
whether 
the 
majority's 
opinion 
undermines 
the 
purpose 
of 
Wis. 
Stat. 
§ 846.103(2) to protect the debtor.   
A 
¶119 The majority does not discuss whether a plaintiff's 
(mortgagee's) election of waiver under Wis. Stat. § 846.103(2) 
functions as a discharge of the debt or only as the creditor's 
promise not to sue the debtor for the deficiency.  This question 
is part of a larger issue in guaranty law relating to actions 
that give rise to guarantors' defenses.18  The question is  
significant here because it may affect whether the guarantors 
                                                 
18 See Neil B. Cohen, Striking the Balance:  The Evolving 
Nature of Suretyship Defenses, 34 Wm. & Mary L. Rev. 1025, 1043-
44 (1993). 
No.  2008AP912.ssa 
 
16 
 
can or cannot ultimately recover from the debtor the amount they 
pay the creditor.19   
¶120 This issue was explored in Continental Bank & Trust 
Co. v. Akwa, 58 Wis. 2d 376, 206 N.W.2d 174 (1973).  In Akwa, 
the creditor settled with the debtor and released the debtor 
from personal liability, reserving its rights against the 
guarantor. The creditor then sued the guarantor. 
¶121 The Akwa court concluded that when the release of the 
debtor is an agreement not to sue the debtor for the deficiency, 
the creditor may still make a claim against the guarantor under 
a guaranty (or settlement agreement) and the guarantor's 
remedies against the debtor remain unaffected.  The reasoning is 
                                                 
19 The judgment entered against the guarantors was not for 
the amount of the deficiency but for the total amount of the 
debt owing on the notes ($1,436,457.85).  See majority op., ¶9.   
Thus the question immediately presented is not whether the 
a deficiency judgment may be entered against the guarantors.  
Rather, the present case comes before the court on motions 
objecting to confirmation of the foreclosure sale and seeking 
relief from judgment.  Wisconsin Stat. § 806.07(1)(e) provides 
that the court may relieve a party from a judgment when "[t]he 
judgment has been satisfied, released or discharged." 
If the operation of the Bank's waiver under Wis. Stat. 
§ 846.013(2) is to discharge the underlying debt, then under the 
principle of guaranty law recognized in Akwa, the guarantor's 
obligation will also be satisfied.  If, on the other hand, the 
operation of the waiver under § 846.013(2) is construed as 
merely a promise by the Bank not to sue the mortgagor (Boyer 
Construction) for the amount of the deficiency, then under Akwa 
it appears the guarantors would still be liable.  The majority's 
failure to address this issue amounts to a failure to resolve 
the bottom line dispute in the present case: whether the 
guarantors are entitled to relief from the judgment entered 
against them, in other words, whether the Boyers are personally 
liable to Bank Mutual for the amount of the deficiency. 
No.  2008AP912.ssa 
 
17 
 
that the release is in effect merely a promise by the creditor 
not to sue the debtor and does not discharge the underlying 
debt.  Accordingly, under these circumstances the guarantor is 
liable to the creditor for the underlying debt and the debtor 
remains liable to the guarantor.    Akwa, 58 Wis. 2d at 392-93.   
¶122 In contrast, according to Akwa, if the creditor's 
release of the debtor amounts to a discharge of the debt, then 
the underlying obligation is terminated and the guarantor is 
also released.  Obviously, if the guarantor is released the 
guarantor does not have a claim against the debtor.  Akwa, 58 
Wis. 2d at 392-93. 
¶123 If the court applies the Akwa case, it should analyze 
whether Wis. Stat. § 846.103(2) functions as a promise by the 
creditor not to sue the debtor for the deficiency or as a 
discharge of the debtor's debt.  This analysis not only affects 
the liability of the guarantor to the creditor but also affects 
the rights of the guarantor against the debtor.   
¶124 The majority opinion fails to address this issue. 
B 
¶125 This discussion leads us to another critical question 
not addressed in the majority opinion, namely whether the 
guarantors (Steven and Marcy Boyer, individually), after paying 
any sums they owe to the mortgagee, can in turn sue the debtor 
No.  2008AP912.ssa 
 
18 
 
(Boyer Construction) to recover for the amount the they have 
paid to cover the debt.20   
¶126 A guarantor who pays the debtor's obligation to the 
creditor ordinarily has recourse against the debtor to recover 
the amount the guarantor paid.21  If the guarantors have recourse 
                                                 
20 For a collection of cases on the issue of the rights of 
the guarantor against the debtor, see J.A. Bryant, Jr., 
Mortgages: Effect upon Obligation of Guarantor or Surety of 
Statute Forbidding or Restricting Deficiency Judgments, 49 
A.L.R.3d 554, § 2[a] (1973) ("It has been argued that if 
guarantors, sureties, and the like are construed not to have 
been afforded the protection of the statute, upon being 
recovered from, they will be able to assert rights over against 
the principal obligors, and that such action would defeat the 
purpose of the statutes, thus allowing to be accomplished in two 
steps what was forbidden in one.").  
21 The guaranty in the present case recognizes the rights of 
the guarantor against a debtor who defaults on the debt.  See 
guaranty at majority op., ¶5.  The Restatement (Third) of 
Suretyship and Guaranty § 22(1) (1996) provides that subject to 
certain exceptions, "when the principal obligor [the debtor] is 
charged with notice of the secondary obligation [that of the 
guarantor] it is the duty of the principal obligor to reimburse 
the secondary obligor to the extent that the secondary obligor: 
(a) performs the secondary obligation . . . ."  See also Hills 
Bank & Trust Co. v. Converse, 772 N.W.2d 764 (Iowa 2009) ("Where 
a 
guarantor, 
who 
has 
entered 
into 
contract 
of 
guaranty . . . pays or is compelled to pay his principal's debt, 
the law raises an implied promise . . . on the part of the 
principal to reimburse the guarantor . . . ." (quoting Halverson 
v. Lincoln Commodities, Inc., 297 N.W.2d 518, 522 (Iowa 1980))). 
In Charmley v. Charmley, 125 Wis. 297, 304, 103 N.W. 1106 
(1905), the wife sued the deceased husband's estate for the 
money she paid on the mortgage the deceased husband had assumed.  
The court concluded that when a "person paying off the 
[mortgage] lien is secondarily liable for the debt, there 
springs out of the transaction an implied promise by the one 
primarily liable to repay the money.  That does not rest on the 
law 
of 
subrogation. 
 
It 
is 
enforceable 
as 
a 
legal 
liability . . . ."  
No.  2008AP912.ssa 
 
19 
 
against the debtor in the present case to collect what the 
guarantor paid, then Wis. Stat. § 846.103(2), which is designed 
to protect the debtor against personal liability, will be 
defeated in this second stage of litigation.   
¶127 Thus the majority first recognizes that the statute is 
meant to protect the mortgagor but then adopts an interpretation 
of the statute that risks defeating that very purpose of the 
statute.  The majority opens the door to more litigation.  
¶128 A central reason why the guarantor may proceed against 
the debtor is that it is unfair for the creditor to use the 
statute totally to its advantage and harm the guarantor by 
changing the nature of the guarantor's obligations.  The 
mortgagee (the Bank) has elected under the statute to impose a 
different risk on the guarantor than the guarantors understood 
at the time they agreed to the guaranty.  A guarantor must 
expect to pay the debt but also can expect that the debtor 
remains under a compulsion to pay.  The Akwa court, 58 
Wis. 2d at 392-94, explained at length the unfairness of a rule 
that imposes continuing liability upon the guarantor when the 
debtor is released from liability and the burden.  It is unfair 
to guarantors to hold them liable after the debtor is released; 
the guarantor's risk is increased.  See Akwa, 58 Wis. 2d at 392-
92.   
¶129 Neither the text of Wis. Stat. § 846.103(2) nor the 
majority opinion provides an answer to the question of who wins 
in a guarantor's suit against the debtor when the mortgagee 
forecloses 
under 
§ 846.103(2) 
and 
recovers 
against 
the 
No.  2008AP912.ssa 
 
20 
 
guarantor.  The question of the rights of the guarantor against 
the debtor is for another day as a result of the majority 
opinion.   
¶130 I would resolve the interpretation of Wis. Stat. 
§ 846.103(2) in a manner that does not open the door to further 
litigation or leave unaddressed a legal determination that is 
necessary to effectuate the purpose of the statute.  I conclude 
that if the mortgagee proceeds under § 846.103(2), the guarantor 
for payment is released from liability as a party personally 
liable for the debt secured by the mortgage.  
¶131 I reason as follows:  The statute provides the 
plaintiff (usually the creditor) in a foreclosure action with a 
choice: the creditor may choose a longer six-month redemption 
period and preserve its right to collect any deficiency after 
the property is sold, or the creditor may choose to complete the 
foreclosure more quickly, electing the three-month redemption 
period under Wis. Stat. § 846.101(2).  To gain the advantage of 
the shorter redemption period, the creditor must give something 
up, specifically, its right to collect the amount of deficiency 
after sale.  
¶132 The basic outline of this legislative scheme is 
embodied in Wis. Stat. 846.103(1) and (2), and the majority 
acknowledges the obvious tradeoff this statutory scheme puts in 
place: 
"Both 
Wis. 
Stat. 
§ 846.101 
and 
846.103(2) 
permit 
No.  2008AP912.ssa 
 
21 
 
shortened redemption periods in exchange for waivers of certain 
deficiency judgments."  Majority op., ¶31.22    
¶133 But under the majority's interpretation, the basic 
principle of this "exchange" is vitiated.  The creditor may 
shorten 
the 
redemption 
period, 
limiting 
the 
mortgagor's 
opportunities to avoid foreclosure, but the creditor gives up 
little, if anything, in exchange, if there is a guarantor.  So 
long as there is a guarantor, the creditor, under the majority 
opinion, may still collect the deficiency.  Simply put, the 
majority displaces the choice the legislature created for 
mortgagees/lenders proceeding in foreclosure actions and now 
allows mortgagees to "have their cake and eat it too."  
¶134 The practical effect of the majority's thin-slicing of 
the 
statutory 
language 
is 
that 
property 
owners 
facing 
foreclosure around Wisconsin will now have three months in which 
to avoid foreclosure instead of the six months for which the 
legislature has generally provided.  Creditors who otherwise 
would have allowed the six-month redemption period to run in 
                                                 
22 This court recognized the balance of interests intended 
by the legislature interpreting it the parallel provisions of 
Wis. Stat. § 816.101(2) (1973) in Glover v. Marine Bank of 
Beaver Dam, 117 Wis. 2d 684, 694-95, 345 N.W.2d 449 (1984): 
[T]he legislature sought to . . . shorten[] the period 
of redemption in a complicated, costly, time-consuming 
procedure.  This obviously benefits the mortgagee, 
since the mortgagee may be able to reduce the losses 
normally attendant to the twelve-month redemption 
period. . . . However, 
the 
mortgagor 
is 
also 
protected, because at the end of this shortened 
period, the mortgagor is secure in the knowledge that 
he or she will not be responsible for any deficiency 
resulting from the sale. 
No.  2008AP912.ssa 
 
22 
 
order to preserve their right to collect any deficiency will now 
have incentive to elect the shortened redemption period and then 
also proceed against any guarantors for the amount of the 
deficiency.   
¶135 The majority reaches this result on the basis of a 
counterintuitive and narrow reading of the statutory language 
that ignores numerous critical questions.  I therefore do not 
join the majority's interpretation, which is contrary to the 
common meaning of the words themselves and substantially 
undermines the operation and purpose of the statute.   
¶136 For the foregoing reasons, I write separately in 
dissent.  
¶137 I am authorized to state that Justice ANN WALSH 
BRADLEY joins this opinion. 
 
 
No.  2008AP912.ssa 
 
 
 
1