Court Opinion

ID: 8186524
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:09:03.277051+00
Date Added: 2024-06-11T16:40:26.174149
License: Public Domain

Cassoday, C. J.
This action was commenced June 24, 1897, to foreclose a note and mortgage for $500 and interest, *438brought against the mortgagors and the defendant Ornta/o Struck, as the holder of a subsequent mortgage for $300, and against another defendant having a subsequentfinterest or lien upon the premises. The Us pendens was filed therein June 25,1897, and after the complaint had been filed therein. All the defendants made default, except Struck, who answered by way of admissions, denials, and counter allegations to the effect that the lien of his mortgage was not subordinate to the lien of the plaintiff’s mortgage, but that both notes and mortgages were made, executed, and delivered at the same time, and that both mortgages were recorded at the same time, and that the lien of neither mortgage was prior to that of the other, but that both stood upon an equality.
At the close of the trial it appeared, either from the undisputed evidence or the findings of the court, in effect, that the mortgagors applied to one Ozerwinski to procure a loan for them of $800; that Ozerwinski, having induced the plaintiff to loan $500, and one Charles ITahn to loan $300, met the mortgagors October 22,1894; that both notes and mortgages were made, executed, and delivered by the mortgagors to Ozerwinski on that day, and at the same time, — the $500 note and.mortgage running to the plaintiff, and the $300 note and mortgage running to Charles Hahn; that neither the plaintiff nor Charles Hahn was present at the time; that Ozerwinski had then received $500 from the plaintiff to make his loan, and three days afterwards he received from Charles Hahn a check for $300 to make his loan; that, at the time of the execution and delivery of the notes and mortgages to Ozer-winski, he had informed the mortgagors, and it was understood between them, that the note and mortgage to the plaintiff for $500 was to be the first mortgage, and that the note and mortgage to Hahn for $300 was to be the second mortgage; that Ozerwinski continued to hold both mortgages until November 13,1894, when he recorded both mort*439gages at 1:45 p. m.,— the plaintiff’s mortgage in Yolume 335 of Mortgages, ón page 50, and Hahn’s mortgage in the same volume, on page 51; that Czerwinski only paid to the mortgagors a small part of the money at the time of the delivery to him of the notes and mortgages, but, according to an understanding between them at the time, retained most of the money until after the mortgagors had completed a building on the mortgaged premises, about to be constructed or then in process of construction, and when completed the same was paid over to them; that both notes and mortgages were payable'three years after date; that the interest o'n the plaintiff’s mortgage was at seven per cent, per annum, and was payable semi-annually, and that by reason of the default in the payment thereof the plaintiff notified the mortgagors June 17, 1897, that he had elected to declare the whole amount due, under the usual clause of the mortgage authorizing the same; that December 3, 1894, Charles Hahn, for value received, duly sold, assigned, and delivered the note and mortgage so payable to him to the defendant Struck, and that such assignment was duly recorded December 14, 1896; that the interest on the Hahn note and mortgage was at seven per cent, per annum, and was payable annually; and that, by reason of default in the payment thereof, Struck notified the mortgagors August 4, 1897, that he had elected to declare the whole amount due and payable. Hpon such facts the trial court found that the plaintiff’s mortgage was the first mortgage, and the prior lien upon the premises, and that Struck’s mortgage was the second mortgage, and subject and subordinate to the plaintiff’s mortgage, and ordered the usual judgment of foreclosure and sale accordingly. From the judgment so entered the defendant Struck brings this appeal.
The mortgagors negotiated with no one in respect to either of the loans or mortgages, except Czerwinski. Neither of the mortgagees was present at the time of the execution or *440delivery of the notes and mortgages, or either of them. No one represented or appeared in behalf of either of such mortgagees during such negotiation, nor at any time during the execution or delivery of such notes and mortgages, or either of them, except Czerwinski. Czerwinski must be regarded as the agent of such mortgagees, respectively, in negotiating such loans and receiving such notes and mortgages. Czerwinski’s agreement, with full knowledge of the facts, that the plaintiff’s mortgage should be the first mortgage,, and a prior lien upon the premises to the Hahn mortgage, was in legal effect the agreement of Hahn, with full knowledge of the facts, and hence binding upon him. Thus, it was held in New York at an early day that “ although two mortgages upon the same premises, given to different persons, bear the same date and are acknowledged at the same time, if it appears that it was the agreement and intention of all parties that one of the mortgages should have a preference over the other, so as to be a prior lien upon the premises, the law, for the purpose of carrying into effect that intention, presumes that the mortgage which was intended to be preferred was delivered first.” Jones v. Phelps, 2 Barb. Ch. 440. To the same effect, Freeman v. Schroeder, 43 Barb. 618; Gilman v. Moody, 43 N. H. 239; Mut. L. Ins. Co. v. Sturges, 33 N. J. Eq. 328. This has been held to be so even where the mortgage so postponed was first recorded. Rigler v. Light, 90 Pa. St. 235. So it was held in New York that “ where two mortgages upon the premises are recorded at the same time, and each mortgagee is cognizant of the giving of the other mortgage at the time that he takes' his own,, the recording acts have no application to the case, in respect to the question of priority.” Jones v. Phelps, 2 Barb. Ch. 440. This is in harmony with the rulings of this court. Butler v. Bank of Mazeppa, 94 Wis. 351. There is nothing in the record to indicate that the plaintiff’s mortgage was-not to be the prior lien upon the premises. In one of the *441New York cases cited it was held that the assignee of suck second mortgage bad no greater right than his assignor possessed to disturb the lien of the prior mortgage. Freeman v. Schroeder, 43 Barb. 618. But, assuming that there might be circumstances which would give the assignee of a second mortgage a prior lien upon the premises, yet there is nothing in the record to indicate that Struck was a "bona fide purchaser for value, -without notice of the agreement that the plaintiff’s mortgage should be first and the Hahn mortgage second. Butler v. Bank of Mazeppa, 94 Wis. 351, and cases, there cited. We must hold that the plaintiff’s mortgage was the prior lien upon the premises.
By the Gourt.— The judgment of the circuit court is affirmed.