Court Opinion

ID: 6603964
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:10:25.862685+00
Date Added: 2024-06-11T15:58:07.246133
License: Public Domain

Taylob, J.
There are some things which were settled by the two former appeals in this case. On the first appeal it was settled that the undivided half of the Scott mortgage was not merged into the title in fee which the Whortons, or one of them, obtained from the mortgagors of Scott and Webster, and it follows, as a logical conclusion, that their possession was the possession of the owner of the title in fee, and not the possession of a mortgagee. It is evident that the purchase of the undivided half of the Scott mortgage did not give the Whortons any right to. the possession or use of the mortgaged premises. This they understood perfectly; and, in order to procure the right of aétual possession and use of the property, pending proceedings to foreclose the Scott mortgage, they purchased the title of the mortgagors, and *367the right of possession, and the possession of the Whortons should therefore be referred to that title, which conveyed the right of possession and use, rather than to the conveyance of the mortgage interest, which did not and could not give any right of possession as against the right of the mortgagors. This was the view this court took of the case on the first appeal.
On the second appeal this court held a like view of the situation of the parties. It is true, the learned counsel for the present respondent made a point in his argument on that appeal that the Whortons should be treated as mortgagees in possession, after the judgment was entered, so far as Webster was concerned; but the main ground of his argument was that, as the judgment restrained all the defendants, including the Whortons, from committing any waste on the land or doing any other act that might impair the value of the said mortgaged premises at any time between the date of the judgment and the date of the sale, such restraining clause was as much for the benefit of Webster's mortgage interest as for the interest of the owners of the Scott mortgage, and that to the extent the Whortons had'wasted the land and lessened the value of it as security for the Webster mortgage, the claim of the Whortons under the Scott mortgage should be abated so as to increase the surplus money on the sale applicable to the payment of their mortgage. To this extent, and to this extent only, this court upon such appeal held the claim of Webster good as against the Whortons’ interest in the Scott mortgage. This is evident from what was said by Justice ObtoN in the closing sentence of his opinion. We are also of the opinion that Webster limited himself to that relief by .his appeal from the order made by the circuit court. The circuit court, in refusing Webster'’s motion, limits the claim made by Webster to an account for the value of the timber cut by the Whortons since -the judgment, and makes no mention of any claim made for the rents and profits of *368the mortgaged premises in addition to the value of such timber. And the appeal of Webster was from “ so much of the order as directs a sale of the mortgaged premises for the whole amount of the judgment, without requiring the Whortons to account for the timber cut by them from the mortgaged premises since the entry of judgment, and refuses to require said Whortons to account for the timber so out.” If Webster had desired to review the question of his right to have the Whortons account for the rents and profits of the mortgaged premises as well as for the value of the timber cut, he should have appealed from the order for refusing him that relief also.
The stipulation afterwards and pending the appeal made by Webster with the Whortons, allowing the sale to be made and confirmed, and waiving all irregularities, if any, in the proceedings had for the sale of said mortgaged premises herein, including the resale of the same, etc., saving to himself only “ all the rights that he may have involved in a certain appeal now pending in the supreme court of "Wisconsin by said Webster from an order of the circuit court refusing to compel plaintiffs in this action to account, be in no manner affected by this stipulation, but all controversies in any manner involved in this action affecting the mortgaged premises, except those involved in said appeal, are hereby settled and ended,” clearly limits Webster to the claim made on such appeal. There is no pretense but this stipulation was fairly entered into by Webster with a full understanding of its effect. It seems to us very clear that this stipulation leaves nothing unsettled between Webster and the Whortons in regard to this foreclosure judgment and sale, except such rights and such alone as were involved in the second appeal to this court; and, as said above, that appeal only presented to this court for review, the single question whether the Whortons should “ account to Webster for the timber cut by them from the mortgaged premises since the *369entry of judgment.” Upon that appeal this court determined that the Whortom must account for the timber so cut, and have the value of such timber deducted from the amount due on their undivided half of the Scott mortgage.
We think the former decisions in this case, and the stipulation of Webster, have limited the right of Webster to a single question, viz., the value of timber out from the mortgaged premises between the date of the judgment and the date of the sale of the mortgaged premises. Fortunately, this view of the case renders it unnecessary to determine the question whether in any case a mortgagee can, as against a grantee of the mortgagor in possession of the mortgaged premises, who has not covenanted to pay the mortgage debt, require such grantee to account for the rents and profits of the mortgaged premises, or to have a receiver appointed to receive such rents and profits, and have them applied in payment of the mortgage debt. The learned counsel for the appellant has made a very able argument against the right of the mortgagee. This argument was not answered by the learned counsel for the respondent, for the reason that the point was not made or argued in the printed brief of the appellant served on him. We therefore express no opinion on the subject.
The circuit court was in error in opening the question so wide as to include rents and profits and other acts of waste, and in treating the Whortons as though they were mortgagees in possession, and requiring them to account to Webster as if he had brought an action to redeem the mortgaged premises. The accounting should have been strictly confined to determining how much the premises had been lessened in value by the removal of the timber therefrom between the date of the judgment and the date of sale, and this can, perhaps, be approximated to as well by getting at the value of the timber standing on the land before the same was cut and removed by the Whortons, or what in lumbermen’s language is called “ stumpage,” as in any other way. *370Webster is clearly not entitled to any other value of tbe timber. He is only to be protected in his mortgage interest by awarding to him compensation for that which diminishes his security. He cannot, in this proceeding, appropriate the labor and skill of the Whartons to the payment of his mortgage.
It is said by the learned counsel for the respondent that the evidence now before the court will enable us to determine the value of such stumpage. We are unable to agree with the learned counsel on this point. The case was not tried on any such theory, and the evidence, especially on the part of Webster, was not directed to the point in issue, and there is no finding of the circuit judge on that question. As the case is now presented to this court, we should be unable to make any fair estimate as to the value of the stumpage taken by the Whartons. As we confine Webster strictly to the lessened value of the mortgaged premises by reason of the waste committed by the Whartons, we are of the opinion that they cannot offset against such waste the value of any improvements made on the land by them which may have increased the value thereof. And, on the other hand, Webster, in fixing the value of the timber cut and removed, cannot have the value as it has been enhanced by any improvements made by the Whartons, but he must be content with such value as the timber would have independent of such improvements. Webster is not entitled to claim the value of the timber as enhanced by the improvements made on the mortgaged premises by the' Whartons, without allowing them for such improvements as a setoff; and as we think they cannot set off the improvements against the waste, they ought not to have their liability for waste increased by such acts as are a benefit to the estate and so an advantage to Webster.
The liability of the Whartons to Webster for cutting and removing the timber, is based solely on the ground that such cutting and removal was a wrong wilfully done by the Whor-*371tons to the prejudice of Webster; and when a wrong of that kind is committed the courts are not inclined to permit a .mitigation of the damages by taking into account other lawful acts of the wrong-doer, which may be a benefit to the party'claiming damages for such wilful and wrongful acts. The acts for which compensation is sought by Webster were prohibited by the judgment of the court in an action in which the Whortons were parties; and as this court has held, on the second appeal, such prohibition was for the benefit of • Webster, it cannot now be claimed that the cutting and removal was done in good faith. It is said that if Webster comes into a court of equity to ask relief, he must do equity. This claim of Webster to be compensated for the damage done to his mortgage interest by the wrongful acts of the Whortons is a purely legal claim, and could undoubtedly be enforced in what would formerly have been denominated an action on the case. He made his claim in the present proceeding as being an appropriate means of obtaining compensation for the wrong done him, and his right to obtain relief in this action has been determined by this court on the second appeal. "We think he has the same right in this proceeding that he would have in a direct action to recover his damages for the waste committed by the Whortons. Frankland v. Moulton, 5 Wis., 1; Jones v. Costigan, 12 Wis., 677; Van Pelt v. McGraw, 4 N. Y., 111; Gardner v. Heartt, 3 Denio, 232; Yates v. Joyce, 11 Johns., 136; Lcrne v. Hitchcock, 14 Johns., 213; Smith v. Moore, 11 N. H., 55; Stark v. Redfield, 52 Wis., 349; Fairbank v. Cudworth, 33 Vis., 358.
The foreclosure of the Scott mortgage, and a sale under such foreclosure, rendered it unnecessary for Webster to proceed to foreclose and sell under his mortgage in order to place himself in a condition to maintain an action for the damage done to his mortgage interest. The foreclosure of the Scott mortgage bars Webster of all claim to the mortgaged premises, and for the purpose of maintaining an action *372against a wrong-doer to recover damages for an injury to Ms mortgage interest, be should be treated the same as though his mortgage had been foreclosed, and he had obtained title to the mortgaged premises. The Whortons cannot offset taxes paid by them on the mortgaged premises. They being in possession, and using the mortgaged premises, were under a legal duty to pay all taxes assessed thereon. The taxes must be deemed to have been paid and the permanent improvements made for the purpose of protecting and making more profitable the use of the premises to the Whor-tons, who, as between themselves and Webst&r, must be treated as grantees of the mortgagors remaining in possession of the mortgaged premises, and entitled to the use of the same. The mortgage of Webster was a continuing security, and covered all permanent improvements made by the Whortons as soon as made, and was as much a lien on them when they came into existence, as it was upon the lands at the time the mortgage was executed. That lien of the Webster mortgage cannot be removed for the benefit of the Whortons, and to mitigate the claim of Webster to be compensated for the damage done to his security by the wilful waste committed by them on the mortgaged premises. As we hold Webster bound and limited in his claim for damages by his stipulation made in the action; to his claim for damages occasioned solely by the cutting and removing of timber by the Whortons, we are also inclined to hold that by the terms of that stipulation the Whortons have waived any claim to compensation for improvements made on the mortgaged premises as a setoff to Webster’s claim for waste. The provision in the stipulation is that “ all controversies in any manner involved in this action, affecting the mortgaged premises herein, except those involved in said appeal, are hereby settled and ended.” This, we think, leaves nothing open for controversy except the question whether Webster should be allowed to deduct from the Whortons’ interest in *373the Scott mortgage the value of the timber cut and removed by the Whortons between the date of the judgment and sale. This court held on the second appeal that Webster was entitled to have such value so deducted; and when that value is properly ascertained and deducted, the controversy must be ended.
There is no reason for vacating the sale under the Scott mortgage. The Whortons, being the purchasers under that sale, take the premises subject to the claim of Webster for the timber cut. By the .decision of this court Webster is entitled to have the value of the timber cut deducted from the amount due on Whorton’s half of the Scott mortgage, and upon the mortgage sale so much only of the proceeds of that sale shall be applied to their share of the Scott mortgage as is left after deducting the value of such timber. 'Whatever of the proceeds of the sale remain after so applying the value of such timber belong to Webster, as the owner of the second mortgage, and if it be not paid into court by the Whor-tons, who were the purchasers, such sum would, as between the Whortons and Webster, be a first lien upon the lands in the hands of the Whortons, and the court can, in case the money be not paid within a time to be fixed in its order, direct a sale of the mortgaged premises to pay the same, without in any way interfering with the original mortgage sale.
By the Gourt.- — The order of the circuit court referring the matter to a referee, and the final .order of said court from which this appeal is taken, are reversed, and the cause is remanded with directions to said court to ascertain the value of said timber cut and removed from the mortgaged premises by the Whortons, or either of them, between the date of the judgment and the date of the sale of the mortgaged premises; such value to be ascertained as in this opinion indicated, with interest on such value from the time the same was cut to the date of the order; and, when so ascer*374tained, that an order be entered requiring the Wliortons to pay the amount to the said Webster, with taxable costs, not exceeding the amount then due on Webster's mortgage, less the surplus paid into court on the Scott mortgage sale, within a time to be fixed in said order; and that, in default of such payment, the said mortgaged premises be sold for the payment of such sum, with interest and costs of sale.