#### Ogden, Respondent, vs. Bradshaw, Appellant.

*December 11, 1914*

May *18, 1915.*

*Mortgages: Foreclosure: Judgment: Form: Deficiency: Limitation of actions: Covenant to pay in mortgage: Taxes paid: Interest: Maximum rate recoverable.*

1. Where a mortgage securing a note contains a covenant to pay the amount named in the note, specifying it, the circuit court has jurisdiction, upon a complaint asking such relief, to render a personal judgment for damages upon such covenant and a judgment for foreclosure of the mortgage without provision for a deficiency judgment; and, in the absence of any objection at the trial or any request for an ordinary foreclosure judgment, defendant cannot afterwards complain that the judgment so rendered does not conform strictly to the foreclosure statute.

2. Where a mortgage under seal contains a covenant to pay the debt secured thereby, neither the right to foreclose nor the right to a personal judgment for deficiency is barred until the expiration of twenty years from the time of default.

3. Where the mortgage contains also a covenant by the mortgagor to pay taxes, damages for breach of such covenant may be vadded to the amount found due.

4. The covenant in this case being to pay the sum specified in the note “with interest accruing thereon at the times and in the manner stated in said note,” the note, though barred, may he taken to fix the terms of interest on,the amount secured by the lien.

5. Even though a note expressly provides for the compounding of interest, the maximum recovery for interest thereon must not, under sec. 1689, Stats., exceed ten per cent, per annum simple interest.

*50Appeal from a judgment of tbe circuit court for Douglas-county: FbaNK A. Ross, Circuit Judge.

*Affirmed.*

Tbe judgment provides, among other things, that plaintiff recover upon the first cause of action stated in the complaint the sum of $6,546.36 damages and $46.31 costs and disbursements, in all the sum of $6,592.67, and that plaintiff have execution therefor and all other remedies usual upon personal judgments; that there is due plaintiff upon the note and secured by the fnortgage for principal, interest, and taxes paid, the sum of $6,546.36 principal, the further sum of $78.81 costs, and the further sum of $50 attorneys’ fees, in all the sum of $6,675.17, which sum is a lien upon the mortgaged premises; that the mortgaged premises be sold at any time after one year from the date of the judgment, unless redeemed previous to such sale by payment of the amount so ád-judged to be due with interest at six per cent, per annum and subsequent costs; that any sum or sums collected upon the judgment entered against the defendant personally upon the first cause of action shall be applied toward the payment and discharge of this judgment of foreclosure and sale.

For the appellant there was a brief by Grace, *Hudnall &*Fridley, and oral argument by *George B. Hudnall.*

They contended, *inter alia,*that plaintiff was not entitled to “interest at ten per cent, per annum on said principal and on all payments of interest after they severally mature until paid,” as called for in the note. Defendant did not, in the mortgage, covenant to pay the note according to its terms; in fact he did not agree to pay the note at all. He simply agreed to pay “the sum of money above specified with interest accruing thereon.” The sum of money above specified with interest accruing thereon was $1,650, with interest at eight per cent. These sums he agreed to pay “at the times and in the manner stated in said note.” The time stated in the note is five years after the date of the note. The manner stated in the note is “gold coin payable at the State Bank, Madison, Wis.” The *51statute of limitations liaving run on tbe note, tbe note is as effectually out of tbe case “as if paid or otherwise discharged.” *Eingartner v. III. 8. Go.*103 Wis. 373, 376, 79 N. W. 433. Not baying paid tbe agreed stuns at tbe time agreed — October 9, 19.00,- — defendant thereby breached tbe covenant in tbe mortgage, and for such breach, tbe amount being liquidated, plaintiff was entitled to six per cent, interest from tbe time of tbe breach. -

Eor tbe respondent there was a brief by *Luse, Powell & Luse,*and oral argument by *L. K. Luse.*

They argued, among other things, that tbe judgment was not rendered for a larger amount than was due upon a proper computation of interest. Tbe promise in tbe mortgage, by referring to tbe note, is just as complete as if tbe note was incorporated bodily in and as a part of tbe covenant. *Elmore v. Higgins,*20 Iowa, 250; *Lake View v. MacBitchie,*134 Ill. 203, 25 N. E. 663; 9 Cyc. 582; *Miller v. Edgerton,*38 Kan. 36, 15 Pac. 894; *Short v. Van Dyke,*50 Minn. 286, 52 N. W. 643; 1 Jones, Mortg. (6th ed.) § 71; *Norton v. Kearney,*10 Wis. 443; *Wright v. G. 8. Graves L. Go.*100 Wis. 269, 75 N. W. 100.

Tbe following opinion was filed January 12, 1915:

Timlin, J.

Tbe plaintiff in bis complaint set forth two separate causes of action, tbe first at law for damages on a note and on a covenant of payment thereof found in tbe mortgage and on a breach of tbe covenant to pay taxes contained in tbe mortgage; tbe second cause of action was tbe ordinary complaint for foreclosure of a mortgage and sale of tbe mortgaged premises, not, however, seeking judgment for deficiency. No objection was made to tbe form of tbe complaint by demurrer, motion, or otherwise, but tbe defendant made answer to tbe merits and went to trial on such pleadings. There was not even a request made to tbe circuit court that tbe ordinary judgment of foreclosure and sale should be rendered. No exception to tbe form of tbe judgment was taken, *52and exceptions to tbe findings of fact and conclusions of law were not made until thirty days after judgment and do not cover tbis point. Tbe appellant now seeks to raise for tbe first time in tbis court tbe question wbetber tbe ordinary judgment of foreclosure and sale should not have been given. Tbis cannot be done. Tbe judgment given follows tbe pleading. Tbe jurisdiction of tbe court to render a judgment for damages or its jurisdiction to foreclose a mortgage without making provision for a deficiency judgment are unimpaired. Each pertains to tbe general common-law and equity jurisdiction derived by tbe circuit court from tbe constitution. If it be said tbat all foreclosure actions must proceed under tbis statute, tbe answer is tbat tacit consent, by failure to take any exception to tbe proceeding or make any request for such judgment, waives all objection except tbat tbe court lacked jurisdiction or tbat tbe complaint states no cause of action. Sec. 2654, Stats. 1913. Neither of tbe two latter objections is made or can be made in tbe instant case. Tbe plaintiff could have brought separate actions to achieve wbat be has here done in one action, and it is no serious invasion of defendant’s rights tbat tbe result was accomplished in one action instead of two. Perhaps tbis is why tbe defendant did not ask for any other judgment. Eor tbe law where objection is taken, see *Jesup v. City Bank,*14 Wis. 331; *Endress v.*Shove, 110 Wis. 133, 85 N. W. 653;

Tbe appellant contends tbat tbe judgment for damages is unwarranted because an action on tbe note was barred by tbe six years’ statute of limitations. Tbis is true, but tbe mortgage, which is under seal, contains tbe following covenant:'

> “And the said party of tbe first part, for himself and bis heirs, executors, administrators and assigns, hereby covenants and agrees to and with tbe said party of the second part, bis heirs, executors, administrators and assigns, as follows, to wit: tbat be will pay to tbe said party of tbe second part, bis. heirs, executors, administrators and assigns, tbe sum of money above specified with interest accruing thereon at tbe *53times and in tbe manner stated in said note, together with all costs and expenses, if any there be.”

The sum of $1,650 was previously specified in the mortgage. There is no legal necessity that a bond or note exist as collateral to the mortgage. The covenant to pay a specified sum may he contained in such collateral instrument or in the mortgage itself. There may be two promises, one in the note and another in the mortgage; one on simple contract and the other a covenant under seal. 1 Jones, Mortg. (6th ed.) § 72; 2 id. § 1225.

It has been held that judgments for damages against the mortgagor may be had upon his covenant contained in the mortgage to pay the taxes on the mortgaged property. *Endress v.*Shove, 110 Wis. 133, 85 N. W. 653. It has also' been ruled in numerous cases in this state that after the statute of limitations has run against the simple contract debt evidenced by promissory note to which the mortgage is collateral, the mortgage, being an instrument under seal, may be foreclosed within twenty years after default on the note; but no judgment for deficiency can be given against the mortgagor in such case. *Wiswell v.*Baxter, 20 Wis. 680; *Knox v.*Galligan, 21 Wis. 470; *Whipple v.*Barnes, 21 Wis. 327; *Duecker v.*Goeres, 104 Wis. 29, 80 N. W. 91; *Wells v. Scanlan,*124 Wis. 229, 102 N. W. 571. It would seem to follow that where the covenant to pay is found in the mortgage and the mortgage is a sealed instrument, not only the right to-foreclose but the right to a personal judgment for deficiency would run twenty years from the time of default.

We conclude that, the covenant to pay being under seal,, the right to a judgment for deficiency was not barred, and on the authority of *Endress v.*Shove, supra, that there was properly added to the amount due on the note the amount which the mortgagee was obliged to pay for taxes delinquent by default of the mortgagor, there being an express covenant on the part, of the latter to pay these taxes. The agreement covered by *54tbe note and mortgage was to pay $1,650 five years after October 9, 1895, witb interest until paid at tbe rate of eight per cent, per annum payable semi-annually, and witb interest at ten per cent, per annum on tbe principal and on all payments of interest after they severally mature until paid. Tbe court by its judgment allowed tbe plaintiff for principal and interest due on tbe note and mortgage up to tbe time of judgment $4,358.26. Tbis meant an allowance of $2,708.26 for interest. Tbis appears to be in line witb tbe contract of tbe parties and does not exceed tbe maximum of ten per cent, per annum simple interest permitted by sec. 1689, Stats. 1913.

*By the Gourt.*— Tbe judgment of tbe circuit court is affirmed.

A motion by tbe appellant for a rebearing was denied May 18, 1915, and tbe following opinion was filed:

Per Curiam.

In tbe motion of appellant for a rebearing our attention is called to an error of fact in tbe opinion relative to tbe amount allowed for interest in tbe judgment appealed from. That amount was stated to be $2,708.26, but tbis took no account of several interest payments which bad been made and which amounted to $485.74, consequently tbe true amount was $182.75 in excess of $3,611.25, tbe latter sum being ten per cent, per annum simple interest on tbe principal for eighteen years and three months.

Tbe appellant makes two points upon rehearing: First, that tbe judgment should be modified by reducing tbe interest to eight per cent, simple interest for tbe whole time, because notwithstanding tbe provisions of tbe note calling for a computation of interest upon interest instalments in arrears tbis covenant was not repeated in tbe mortgage and suit on tbe note was barred by tbe statute of limitations. -This point is overruled because tbe note, although barred, yet may be taken *55to fix tbe terms of interest on tbe amount secured by tbe lien. *Potter v. Stransky,*48 Wis. 235, 4 N. W. 95, and cases cited. *Second,*tbat tbe judgment should be modified by reducing as of tbe date of tbe judgment tbe amount of interest awarded by $182.75. Tbis point is sustained. Sec. 1689, Stats. 1913.

Quite similar statutes bave received this construction in *Mathews v. Toogood,*25 Neb. 99, 41 N. W. 130; *Brown v. Crow*(Tex.) 29 S. W. 653; *Kimbrough v. Lukins,*70 Ind. 373; *Smith v. Parsons,*55 Minn. 520, 57 N. W. 311; *Columbia Co. Commrs v. King,*13 Fla. 451.

Tbe motion for rehearing is granted to tbe extent of modifying tbe former judgment, as indicated in tbe opinion, with $25 costs of tbe motion to be taxed in favor of tbe appellant. In all other respects tbe motion for rehearing is denied. Tbe mandate in tbe case is amended so as to read as follows *i*Judgment modified by deducting therefrom, as of its date, tbe sum of $182.75, and as so modified affirmed, with costs, in favor of tbe respondent.