Case Name: Karlen, Appellant, vs. Trickel and others, Respondents
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1926-02-09
Citations: 189 Wis. 148
Docket Number: 
Parties: Karlen, Appellant, vs. Trickel and others, Respondents.
Judges: 
Reporter: Wisconsin Reports
Volume: 189
Pages: 148–156

Head Matter:
Karlen, Appellant, vs. Trickel and others, Respondents.
January 12
February 9, 1926.
For the appellant there was a brief by W. H. McGrath of Monroe, attorney, and Jeffris, Mouat, Oestreich, Avery & Wood of Janesville, of counsel, and oral argument by Mr. Otto A. Oestreich and Mr. McGrath.
J. M. Becker of Monroe, attorney, and Carl N. Hill of Madison, of counsel, for the respondents.

Opinion:
Rosenberry, J.
At the outset, in justice to the trial court it should be said that the proposition which we find controlling m this case was not urged upon the attention of the court below. It is the contention of the plaintiff here that by the sale of the premises on February 28, 1921, and the execution and delivery of a deed to the defendant HMi-litan, wherein and whereby the defendant Haldimcm agreed and promised to pay the mortgage in question as a part of the purchase price of the premises, that the defendants Trickel confirmed and ratified the mortgage of $16,000 given April 30, 1920, and that they are now estopped from denying the validity of that instrument.
It is claimed on behalf of the respondents Trickel that the claim of estoppel was not set up in the pleadings and therefore cannot be urged here inasmuch as there are no specific findings upon the matter of waiver or estoppel, and, it being a matter of intention, that it cannot now be considered. An inspection of the pleadings shows that all of the facts out of which the estoppel arose were duly set out in the complaint and appeared without objection upon the trial. Where the necessary facts appear it is not incumbent upon the pleader specially to plead estoppel. Bank of Antigo v. Ryan, 105 Wis. 37, 80 N. W. 440; Lawton v. Racine, 137 Wis. 593, 119 N. W. 331. While it is true that ratification is a matter of intention, it is also true that one necessarily intends the natural and legal consequences of his own unequivocal act done and performed with full knowledge of1 all the surrounding facts and circumstances. If the $16,000 mortgage was in fact fraudulent and the payee named therein had not good title and the plaintiff was not an innocent purchaser for value without notice, the Trickels had full and complete knowledge on February 28, 1921, of every fact and circumstance tending to show that the mortgage was fraudulent and that the plaintiff was not a holder in due course for value without notice. Having such knowledge, they deliberately entered into a solemn agreement with Haldimcm by which Haldiman was to become primarily liable as between him and the Trickels for the payment of the amount of $16,000 with interest to the plaintiff. Thereafter the plaintiff purchased the first mortgage, paid Haldi-man $250 for surrendering possession of the premises, and proceeded upon the assumption that he was the lawful owner and holder of the mortgage and had good title thereto.
By a long line of cases it has been held that a subsequent purchaser who expressly assumes and agrees to pay a prior and existing mortgage upon property which he buys as part of the purchase price is estopped to defend against such mortgage either upon the ground of usury or on the ground of failure or want of consideration or upon any other ground. See note, Annotated Cases, 1914A, beginning on page 185. See, also, White v. Schader, 185 Cal. 606, 198 Pac. 19, 21 A. L. R. 499; Thomas v. Mitchell, 27 Wis. 414.
After the execution and delivery of the deed by the Trickels to Haldiman, the Trick els stood, as between themselves and Haldiman, in the relation of guarantors for the performance of Haldimm's contract, Haldiman being the primary debtor. While of course this transaction did not make Haldiman the primary debtor as to the plaintiff, it is certain that Trickel, having parted with his interest in the mortgaged property, could, so far as the foreclosure of the mortgage is concerned, make no further or other defense than the owner of the property could make. It is equally well settled that under the facts of this case the defendants Trickel were not entitled to a rescission of the transaction with Goode. Nearly a year after, they entered into an arrangement that confirmed, and ratified it after full knowledge of all the facts and after a trip to Texas to make investigation. The testimony of Trickel indicates, so far as it indicates anything, that there was a mistake rather than a fraud, but he made no subsequent claim to either until the commencement of this action, continued to pay the interest, and his grantee continued to pay the interest.
While the defendants Trickel are estopped to assert any invalidity in the title of the plaintiff so far as the fore closure of the mortgage is concerned, it may be otherwise as respects the personal liability of the Trickels. While they are not entitled to a rescission or cancellation of the mortgage if the plaintiff is not a purchaser in good faith for value without notice of infirmity, they might counterclaim and offset any claim they may have for damages against their personal liability upon the note. It becomes necessary, therefore, for us to determine whether or not the plaintiff was a purchaser in good faith without notice. We have already set out the material facts which tend to support the findings of the court. The trial court was inclined to the view that Trickel's recollection of the conversation had on the highway near his home was more likely to be correct than that of the plaintiff. On the other hand, all the collateral circumstances, most of which are entirely undisputed, tend to corroborate the plaintiff's version. No argument can be based upon the amount of the discount as charging plaintiff with notice, because he was upon inquiry and went to the only man from whom he could obtain information as to the validity of the mortgage. He went to the Trickel farm for the purpose of finding out whether or not there was any such infirmity. Immediately after his conversation with Trickel he paid $12,400 in cash for these securities, a thing that a cautious and prudent man would scarcely do if he had been informed of any defect in the title; he immediately sent notice to Trickel by registered letter of his purchase. Trickel expressed no dissatisfaction after his investigation, and at least down to the time he filed his pleadings in the case reported in 183 Wis. 1, 197 N. W. 329, he was well satisfied with the transaction, in the course of which he had given the mortgage in exchange for Texas lands. The conduct of the Trickels at the time of the sale of the premises, by which they required the purchaser of the farm to enter into an agreement to pay the mortgage, is highly inconsistent with the claim on their part that the mortgage was fraudulent.
Upon the whole case we are of the opinion that the finding that plaintiff was not a purchaser in good faith for value without notice is against the preponderance of the evidence and that it should be held that he was such purchaser and had good title to the $16,000 mortgage.
By the Court. — That part of the judgment appealed from is reversed, with directions to enter judgment in favor of the plaintiff in accordance with this opinion directing a foreclosure of the mortgage in the usual form.