Case Name: Worth vs. Hill and others
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1861-12-11
Citations: 14 Wis. 559
Docket Number: 
Parties: Worth vs. Hill and others.
Judges: 
Reporter: Wisconsin Reports
Volume: 14
Pages: 559–564

Head Matter:
Worth vs. Hill and others.
The rule that in foreclosure eases, where different portions of the mortgaged premises have been conveyed to different persons subsequently to the execution of the mortgage, they are subject to sale, for the payment of the mortgage debt, in the inverse order of their alienation, may be controlled by other equitable principles where the facts render them applicable.
Where one creditor has security upon two funds, and another upon one of them only, the latter may compel the former to resort first to that fund which the latter cannot reach.
Where a tract of land is mortgaged to A, and a part of it subsequently, with other lands, to B, and the remainder afterwards to C, and in a suit to foreclose A’s mortgage it appears that B’s claim is amply secured by the lands in his mortgage not included in that of A, equity requires that so much of the first named tract as is included in B’s mortgage shall be subject to sale prior to the remainder which is mortgaged to C.
Where the adequacy of the security which will remain to B, cannot be tested by an actual sale before the court is required to settle the conflicting claims of the parties, its adequacy may be determined upon the testimony of witnesses, but the court should in such a case act only upon clear proof of its entire adequacy.
APPEAL from tbe County Court of Dane County.
On tbe 11th of January, 1853, Hill gave a mortgage to one Whittlesey upon tbe N. E. qr. of tbe S. E. qr. of S. 32, T. 9, R 10, and tbe E. bf. of tbe N. E. qr. of S. 5, T. 8, in tbe same range. This mortgage was assigned to one Lute Mowrj, who obtained a decree for its foreclosure, in wbicb it was directed that tbe land in S. 32 should be first sold for its payment. The amount of the decree was $466, but no sale had been made under it. On the 1st of November, 1854, Hill gave a mortgage to one Roys, for $400, on the S. hf. of the N. E. qr. of said S. 32, T. 9, R. 10, and the S. W. qr. of the N. W. qr. of S. 4, T. 8, R. 10. This mortgage was assigned by Roys to Worth. On the 28th of October, 1856, Hill gave a mortgage to one Durkee, on the E. hf. of the N. E. qr. of S. 5, and the S. W. qr. of the N. W. qr. of S. 4, in T. 8, R. 10 ; and this mortgage was assigned to the defendant Buck. On the 11th of December, 1857, Hill gave a mortgage to Luke Mowry, on the S. hf. of the N. E. qr. and the N. E. qr of the S. E. qr. of S. 32, T. 9, R. 10. Upon this mortgage there had been a foreclosure and sale, and the mortgaged premises were bought by the defendant Jason Mowry. The mortgages were all recorded about the time of their respective dates.
The present action was brought by Worth to foreclose the mortgage assigned to him by Roys. Jason Mowry asked in his answer, that the court should decree that the S. W. qr. of N. W. qr. of S. 4, T. 8, should be sold first for the satisfaction of the plaintiff’s claim. The defendant Buck demanded in his answer that the S. hf. of the N. E. qr. of S, 32, T. 9, should be first sold for that purpose. On the trial a witness called by Jason Mowry testified that the E. hf. of the N. E. qr. of S. 5 (included in the mortgage held by Buck), was worth $2250, and that the amount due on that mortgage did not exceed $1400. The county court rendered a judgment of foreclosure of the plaintiff’s mortgage, but directed that the S. W. qr. of the N. W. qr. of S. 4, T. 8, R. 10, should be first sold for its payment, and from that part of the judgment Buck appealed.
Julius T. Clark, for appellant:
The invariable rule is, that where there are several subsequent purchasers or mortgagees of different portions of the land covered by the mortgage sought to be foreclosed, such portions will be ordered to be sold in the inverse order of tbeir alienation. Schryver vs. Teller, 9 Paige, 173 ; 1 Hilliard on Mort., 326; 2 id., 182 ; Grafts vs. Aspinwall, 2 Corns., 291. .
Carpenter & Sprague, for respondent':
1. The doctrine that if mortgaged premises have been alienated in parcels to different parties, they must be sold to satisfy the mortgage in the inverse order of alienation, is not sound. A different rule prevails in the English courts. Barnes vs. Backster, 1 Younge & Coll., New Bep., 401, and authorities there cited: Bugden vs. Bignold, 2 id., 377; Aldrich vs. Oooper, 8 Yesey, 391. See also Am. Law Mag. for April, 1844, Art. 5. The courts of Massachusetts hold a different doctrine. Taylor vs. Porter, 7 Mass., 355. So in some cases in New York. Oheesebrough vs. Millard, 1 Johns. Ch., 409 ; Stevens vs. Oooper, id., 425. 2. Since no part of the land claimed by Mowry is covered by the mortgage to Buck, no claim to priority can exist in favor of the latter. The fact- that Hill had mortgaged certain lands to Buck, could not prevent him from giving to Mowry a good title to other lands which he owned at the same time. 3. If the rule is as claimed by the appellant, it is only a rule established to do equity : and if great injustice is to be done by adhering to it in a given case, it will not be adhered to. No injustice can be done to Buck by affirming the judgment, while a reversal of it would in effect take from Mowry the property he has paid for, and give it to the mortgagor.
December 11.

Opinion:
By the Court,
PAINE, J.
This was an action to foreclose a mortgage, and the appeal presents a contest merely between two subsequent incumbrancers of different tracts covered by this mortgage, as to which was entitled, in equity, to have the tract of the other sold first. Perhaps the following general statement of the situation of the parties, will be sufficient to a proper understanding of the question decided.
The mortgage being foreclosed covered two different tracts in different towns. The defendant Buck, who is the appellant, held a mortgage next to this in point of time, covering one of the tracts contained in this mortgage, and other land not covered by this, in the same town. The defendant Mowry held a mortgage next to Buck's in point of time, but upon tbe land in the other town covered by this mortgage, and also upon another tract Thus it will be seen that the mortgage of Howry was not upon any part of the land mortgaged to Buch, but their interests conflict by reason of the mortgage which is being foreclosed, which is prior to both, and covers a part of the land incumbered by each of these defendants. It further appeared that there was a mortgage prior to all these, covering the tract in the Bucle mortgage and the one in the Mowry mortgage which are not contained in the mortgage now being foreclosed, and that such prior mortgage had been foreclosed, and that part which was covered by Howry's mortgage adjudged to be sold before the part covered by Buck's. It was further proved that the other tract covered by Buck's mortgage was ample security for the amount of the debt secured by that mortgage. It was even shown to be of greater value than the entire amount of the Buck mortgage and the first mortgage before referred to, prior to all, for the satisfaction of which the other tract covered by Howry's mortgage had been adjudged to be first sold. Upon this state of facts, the court below decreed that the portion covered by Buck's mortgage should be sold in this foreclosure before that covered by Hoiury's, and from that part of the decree Buck brought this appeal.
His counsel relies upon the established equitable rule, that in foreclosure cases, where the land has been subsequently conveyed by the mortgagor, it shall be sold in the inverse order of alienation. The justice of this rule has been some times questioned, but we regard it as not only well settled, but correct upon principle, and have repeatedly enforced it. But at the same time we think it may be controlled by other established equitable principles, where the facts render them applicable, and such we think was the case here. It is a familiar principle, that where one creditor has security upon two funds, and another has security upon one of them only, the latter may compel the former to resort first to that fund which he cannot reach. And although this is not a direct proceeding to accomplish that object, yet it is substantially that, inasmuch as Howry sets up these facts to rebut the equity Buck would otherwise have as against him. Eor tbe result, if tbe judgment bad been otherwise, would bave deprived Mowry of bis security entirely. Tbe one tract covered by bis .mortgage having already been adjudged to be sold first, for Buck's benefit, now if tbe other should be adjudged to be sold first, be would bave nothing left. Whereas it appears by tbe testimony, that upon tbe decree as rendered, Mowry is protected, and Buck left with ample security for bis debt.
Suppose A mortgages a tract to B, then gives a second mortgage on apart of it to C, which mortgage also covers other tracts, and then gives a mortgage on another part to D ? On a foreclosure of B's mortgage, tbe ordinary rule, based merely on tbe order of alienation, would be to sell B's part first. But suppose D could show that tbe other tracts covered by C's mortgage were an ample security for bis debt, would not that raise an equity sufficient to overcome tbe ordinary rule, and require, as between C and B, that C's part should be first sold ? I think so; and that is substantially tbe relation which these defendants bold to .each other in tbe present case. I can see no reason why tbe principle requiring tbe creditor having two funds to resort first to tbe one which tbe other creditor cannot reach, is not applicable to such a case. It is true that ordinarily tbe adequacy of tbe first fund might be tested by an actual sale, and tbe creditor who was compelled first to resort to that, might still be in a position to resort to tbe other, to supply any deficiency; and here Buck may not be left in such a position. I think that is good reason why such a decree as tbe one made in this case, should be made only upon clear proof of tbe entire inadequacy of tbe remaining security. But I am not prepared to say that courts should not act upon such proof, or that a party so situated has any absolute right to bave tbe adequacy of bis remaining security tested in all cases by an actual sale. It is obvious that such a test could not be bad in a case like this, and consequently, if that rule were adopted, it would lead to the injustice of cutting off tbe last mortgagee entirely, though it might not be at all necessary for tbe protection of the second. Courts are constantly adjudicating upon tbe most important rights of parties upon tbe theory that human testimony can establish facts with sufficient certainty to justify such adjudication, and I think the question of the ade-qnacy or inadequacy of a security should form no exception.
I think the judgment should be affirmed, with costs, against the appellant, in favor of the plaintiffs and of Mowry.
Judgment affirmed accordingly.