Court Opinion

ID: 8198586
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:22:12.610815+00
Date Added: 2024-06-11T16:40:50.579832
License: Public Domain

Fowler, J.
{dissenting). I cannot agree to the decision of this case made by the court. The case seems to me to be the not uncommon one in these days of a mortgagee taking advantage of the necessities of his mortgagor and driving a hard and oppressive bargain. In the first place, we have the creditor getting land admittedly worth twice the mortgage debt for a mere cancellation of the debt. This is indicative of fraud. In the instant case there was no fraudulent representation, except the one found by the circuit judge that it was verbally agreed that the mortgagor defendants should have the same rights of redemption that they had under the mortgage, which operates as a fraud under the decision of the court. The opinion of the court states that the mortgagors are insisting that the mortgage debt is satisfied, and still asking that the land be restored to them. I do not so understand their position. While in terms they ask that the deed be declared a mortgage, they are in effect asking that the deed be set aside, from which it would follow that the mortgage and the mortgage debt would be restored.
The rule governing the setting aside of deeds from mortgagor to mortgagee and reinstating the mortgagor-mortgagee relation was recently stated in Paul v. Smith, 215 Wis. 613, 255 N. W. 919, as follows:
“In order to sustain such a conveyance as valid, it must be established by clear and satisfactory proof, upon closely scrutinizing the transaction, that the conveyance was voluntary on the part of the mortgagor; based on an adequate consideration; untainted by fraud; made without advantage being taken of the debtor’s necessity to drive a hard bargain; *346and that there was discharge of the mortgage indebtedness or at least a binding agreement to consider that indebtedness paid and discharged.”
I understand this to be the settled law of this state, and that not only some of the conditions above named must exist in order that the transaction may stand, but that all of them must.
In the instant case, while some of the conditions mentioned existed, others did not, as the trial court found upon sufficient evidence. The conveyance was voluntary, if we consider an act voluntary that is not induced by actual duress. But it was not based on an adequate consideration, for the debt was only half the value of the land; and it was not made without advantage being taken of the debtor’s necessities to drive a hard bargain. These vices in the transaction and others hereinafter stated seem to me to require setting aside the transaction, and restoring the relation of mortgagor and mortgagee between the parties.
The opinion of the court goes mostly on the proposition that, as it was agreed that the mortgage debt should be satisfied, and the mortgagors testified that they considered that it was satisfied, this alone should cut the mortgagors off from any relief. What the mortgagor said as to his considering the debt paid is immaterial. Such an understanding or conclusion would be mere nonsense. If the deed stands, the debt is satisfied, but, if the deed falls, the obligation is by that fact restored.
The opinion states that the mortgagors have not repaid the $50 first paid or the overcharge of one-half the taxes computed as due from the mortgagors which was afterwards paid to the mortgagors. No money whatever was paid to the mortgagors, and there is no need or occasion for them to pay these amounts or either of them to the mortgagee. The amounts were merely credited upon another mortgage debt owed by the mortgagors to the plaintiff. That credit will be *347canceled when the deed is canceled. There is no difficulty whatever in restoring the parties to the precise status that existed prior to the execution of the deed without the mortgagors doing or tendering anything as condition of the restoration.
The opinion ignores the bearing upon the rights of the mortgagors of the finding of the trial judge that the plaintiff assured the mortgagors and the mortgagors understood that the mortgagors “would have the same rights under the said deed as they would have under the mortgage.” This on its face is inconsistent with the other oral agreement that, if the mortgagee sold the land within a year, the mortgagors should receive the excess of the sale price over the mortgage debt. But these two oral agreements and all others should be considered and construed together, and, so construing them, the meaning is that, if the land was not sold within a year, and it was not, the rights of the parties should be those of mortgagor and mortgagee; if it was sold within a year, the debt should stand satisfied.
The opinion states that the mortgagors do not offer to redeem from the mortgage, or ask for rescission,' but seek to retain the benefit of the transaction without having the debt reinstated. The latter statement is incorrect. The mortgagors are not asking to be relieved of the mortgage debt. That debt must as matter of law be restored if the deed is canceled. As to offering to redeem, the mortgagors under the terms of the agreement as found by the court, and properly found as I view the evidence, are not bound to redeem presently or as condition of relief. They are entitled to cancellation of the deed, and that effects restoration of the mortgagor-mortgagee relation.
The opinion of the court ignores elements of the transaction which approach, if they do not constitute, actual fraud. The plaintiff, under the evidence of the mortgagor Stone, stated that the purpose of procuring the deed was to enable *348him to effect a sale of the premises more readily, and that the mortgagors would have the same rights under the deed as they had under the mortgage. The transaction was proposed by the plaintiff; the deed was drawn at the direction of the plaintiff; the mortgagors went to sign the deed at the request of the plaintiff to the office of the scrivener selected by the plaintiff to prepare the deed for signature. These representations and this pressure by the plaintiff were proper for the court to consider, as was the fact that the value of the land was twice the mortgage debt, and these altogether justified the conclusion of the court that the plaintiff overreached the mortgagors, took advantage of their necessities to drive a hard bargain, and schemed to accomplish what would be in effect a fraud upon them.
The case has been tried by the trial court and facts found upon sufficient evidence that show the relations of the parties and the precise relief to which each party is entitled under those relations. That neither party in his pleading asked the precise relief to which he is entitled under the facts found, and those relations did not deprive the trial court from entering judgment determining the controversy and granting to each his proper relief. Under the facts found, the deed and mortgage satisfaction should have been canceled, the mortgage debt restored, the credit on defendants’ other mortgage debt to plaintiff canceled, the amount found due on the restored mortgage debt determined, judgment of foreclosure entered, and the complaint dismissed as to the defendants other than the mortgagors. This, in my opinion, would have done equity and exact justice between the mortgagors and mortgagee, and that is what a court of equity should always do, as nearly as may be done, in actions before it. All a mortgagee is entitled to is a sale of the mortgaged premises in the manner provided by law, and application of the proceeds towards satisfaction of the mortgage debt, if before the time fixed for sale it is not paid by those personally liable for its *349payment. Judgment as stated would have given to the plaintiff his full rights and given to the mortgagors opportunity to complete the loan applied for referred to in the opinion of the court, if so might be, or otherwise secured to them opportunity to save their $6,000 equity, if possible. It is true that the plaintiff would have been delayed a year in his foreclosure proceedings by entry of a judgment as above suggested. But the delay would have been on his own proposal and of his own making, and the result of his inability, or more likely his want of effort, to effect a sale of the premises within a year, as was contemplated by the mortgagors, whether intended by the mortgagee or not. A mortgagee is not likely to overexert himself to effect a sale under an agreement such as found by the court, when by effecting it he will only get payment of his debt, while, by not effecting it, he will, if his scheme succeeds, secure land of value equal to twice the debt.
. A motion for a rehearing was denied, with $25 costs, on June 4, 1935.