Buchner v. Trust

• Decision Date: 13 October 1942
• Citation: 5 N.W.2d 806,241 Wis. 148
• Parties: BUCHNER et al. v. GETHER TRUST.
• Court: Wisconsin Supreme Court

241 Wis. 148

5 N.W.2d 806

BUCHNER et al.

v.GETHER TRUST.

Supreme Court of Wisconsin.

Oct. 13, 1942.

Appeal from a judgment of the Circuit Court for Milwaukee County; Aug. E. Braun, Judge.

Reversed.

The action was commenced on January 17, 1939, by Frank Buchner and Anna Buchner, his wife, and the State Building and Loan Association, a corporation, plaintiffs, against Gether Trust, defendant. Plaintiffs sought the discharge of record of a certain judgment in favor of Gether Trust entered against John Aschik and docketed in the Civil Court, Milwaukee County, on February 10, 1932, in the sum of $236.21, in so far as the judgment may be a lien upon certain real estate owned by plaintiffs, Frank and Anna Buchner. The action was tried to a court without a jury and findings of fact and conclusions of law duly made and entered. On October 27, 1941, judgment was entered adjudicating:

(1) That the judgment lien of Gether Trust was in no way affected by a subsequent foreclosure of a certain mortgage on the premises involved;

(2) That the judgment of foreclosure and sale entered in the foreclosure action referred to in the complaint and findings was released and satisfied;

(3) That plaintiffs are entitled to no relief in the action.

Plaintiffs appeal.

Walter B. Celichowski, of Milwaukee, for appellant.

Hammersley, Torke & Kelley, of Milwaukee, for respondent.

WICKHEM, Justice.

The facts in this case are not in dispute. On June 20, 1930, Pearl Przybyla mortgaged the property in question to the State Building and Loan Association. On October 27, 1931, the mortgagor sold the premises to John Aschik and Anastasia Aschik, his wife. On February 10, 1932, a judgment was entered in the Civil Court of Milwaukee County in favor of Gether Trust against John Aschik in the sum of $236.21. State Building and Loan Association commenced foreclosure on June 28, 1934 making Gether Trust a party but failing to get service upon Gether Trust. Judgment of foreclosure and sale was entered on August 6, 1934, and on February 24, 1936 a sale was had and premises bid in by the mortgagee. The sale was later confirmed and a deficiency judgment of about $3,000 entered. On January 20, 1937, the property was conveyed to plaintiffs by warranty deed.

In brief, it is plaintiffs' position that failure to get proper service upon Gether Trust simply left Gether Trust with the same rights that it would have had had it been properly served, namely, the right to redeem the premises from all liens superior to its lien. The view of defendants, and that sustained by the trial court was (1) that the foreclosure proceedings had no effect in cutting off defendant's lien; (2) that the foreclosure sale resulted in payment of the judgment and complete destruction of the mortgage as a lien, thereby promoting defendant's lien to a first lien and leaving title to the property in plaintiffs, subject to this lien of defendants. The following statement in the case of Winter v. Knaak, 236 Wis. 367, 294 N.W. 488, 489, was the basis of the trial court's conclusion:

“* * * A proper foreclosure proceeding, when confirmed, satisfies the debt and extinguishes the mortgage. [Citing cases.] This affected rights of others, that is, the liens of White and O'Neill, because of the satisfaction of the mortgage debt, came to a position of advantage and one of more value.”

To the contention that defendant's sole right was to redeem, defendants reply that section 278.09, Wis.Stats. supplies the substitute for the bill to redeem which has been abolished. This section provides in substance that at any time after judgment and before sale plaintiff may ask and be granted leave to amend the summons, complaint and proceedings by including as added parties any person proper or necessary thereto.

While the quotation from the Winter case affords considerable color for the argument of defendant, we are persuaded from a review of the authorities and a consideration of the principles involved that appellants' contentions must be sustained. The quotation relied upon was not necessary to the determination of the Winter case. There the question was whether after foreclosure, sale, and full satisfaction of the mortgage, the mortgagee could revive an earlier foreclosure action in order to make certain judgment creditors parties and properly foreclose them. It was held that the mortgagee, having been fully paid and the mortgage fully discharged, had no standing to revive the earlier proceedings. The question as to the rights of the judgment creditors in view of the defective foreclosure was not before the Court. That question is before the Court upon this assignment in the case of Winter v. O'Neill, Wis., 5 N.W.2d 809. The only cases bearing upon the point in this state, and all of the authorities outside of the state so far as we can discover, hold that where a senior mortgage has been foreclosed without making the claimant of a subordinate lien a party, the proceedings are not null and void but leave the holder of the subordinate lien with the same rights that he would have had had he been made party to the foreclosure proceedings. This implies that his rights are not improved, or the rank of his judgment lien advanced. The rights of the subordinate lien claimant duly served with process in the foreclosure of a senior mortgage are to pay the mortgage or to redeem the property. These rights are unimpaired and unchanged by the defective foreclosure. See Pratt v. Frear, 13 Wis. 462;Allen v. Case, 13 Wis. 621;Murphy v. Farwell, 9...