Bur v. Bong

• Decision Date: 12 January 1915
• Citation: 159 Wis. 498,150 N.W. 431
• Parties: BUR v. BONG ET AL.
• Court: Wisconsin Supreme Court

159 Wis. 498

150 N.W. 431

BUR

v.BONG ET AL.

Supreme Court of Wisconsin.

Jan. 12, 1915.

Appeal from Circuit Court, Winnebago County; Geo. W. Burnell, Judge.

Action by Nic Bur, Jr., against Gerhard Bong and Bertha M. Holland. From a judgment for plaintiff, defendants appeal. Reversed as to the last-named defendant, with directions, and affirmed as to defendant Bong.

Winslow, C. J., and Vinje, J., dissenting.

Plaintiff brings this action to foreclose a mortgage and for the sale of the property mortgaged. In 1890 the defendant Bong was the owner of lot 14 and an undivided three-ninths of lots 15 and 16 in block 42 in the city of Green Bay. In 1891 he mortgaged his interest in this real estate to one Vroman. The remaining six-ninths of lots 15 and 16 were owned by the children of Bong. In 1892 Bong became possessed of the title to another one-ninth of lots 15 and 16, and on July 18, 1893, he executed a mortgage to the plaintiff on lot 14 and on the undivided four-ninths of lots 15 and 16. This mortgage was recorded. The notes given to evidence the original indebtedness, the last one due October 5, 1894, have long since become barred by the six-year statute of limitation. The court found that $750 of the principal, secured by the mortgage, remained unpaid, that no interest has ever been paid on the principal, and that there is now due $926.73 as interest. The court awarded judgment for the recovery of these sums and of foreclosure of the mortgage and sale of the premises embraced in the mortgage. In 1894 Vroman foreclosed his mortgage on the three-ninths of lots 15 and 16 and received a deed therefor. In 1897 he conveyed his three-ninths in lot 15 to one Schauer by quitclaim deed, and Bong conveyed to Schauer his undivided one-ninth, and the five children conveyed to Schauer one-ninth each. By these conveyances he became owner of the entire nine-ninths of lot 15, but the one-ninth conveyed by Bong was subject to this mortgage of the plaintiff. None of these quitclaim deeds made any mention of the mortgage. In October, 1898, Schauer conveyed by warranty deed lot 15 to Bertha M. Holland, which deed was recorded the same day. She built a house on this lot, and has remained in possession thereof ever since. The plaintiff's mortgage was executed and recorded in July, 1893. The defendant, Bertha M. Holland, has held possession of the premises since October, 1898, until the commencement of this action in January, 1913, and has paid the taxes. She had no actual knowledge of the existence of plaintiff's mortgage, and has been in exclusive possession of the premises as owner of the land. The defendant Bong has been and now is the owner of the one-ninth of lot 16, mortgaged by him to the plaintiff, and has since acquired a larger interest therein. Upon these facts, which were undisputed, the court held that the plaintiff was entitled to judgment of foreclosure and sale of the undivided interest in lots 15 and 16. From such judgment this appeal is taken.

J. H. M. Wigman, of Green Bay, for appellants.

Greene, Fairchild, North, Parker & McGillan, of Green Bay, for respondent.

SIEBECKER, J. (after stating the facts as above).

[1] The plaintiff's right to foreclose his mortgage, although the note secured by the mortgage is barred by the statute of limitation, has been well established by the decisions of this court. Wiswell v. Baxter, 20 Wis. 680;Knox v. Galligan, 21 Wis. 470;Phelan v. Fitzpatrick, 84 Wis. 240, 54 N. W. 614;Duecker v. Goeres, 104 Wis. 29, 80 N. W. 91. The mortgagee, under such circumstances, is also entitled to recover interest on the principal sum if the note and mortgage provide for the payment of interest. Wiswell v. Baxter, supra.

[2][3] The defendants contend that the plaintiff has lost his interest and rights to their property by reason of their adverse possession of the premises as against him and all others claiming any interest therein. There is no dispute but what plaintiff obtained a valid mortgage covering an undivided one-ninth interest in lots 15 and 16 on July 18, 1893, which mortgage was duly recorded and remains unsatisfied of record to the present time. The mortgagor, Bong, defaulted in the payment of the sum of $750 of the original indebtedness and of the interest which accrued on the entire principal after the same became due, which the court found now amounts to $926.73. The circuit court found that there is due the plaintiff from the defendant Bong these sums, amounting to $1,676.63, and that plaintiff's rights under these mortgages have not been cut off by adverse possession of the premises on the part of Bong or Bertha M. Holland. The general rule is that possession of the premises by the mortgagor is presumed to be in subordination to the rights and interests of the mortgagee or purchaser under foreclosure sale, until it is shown that such possession was in fact adverse to the rights and interests of the mortgagee, in the premises. Avery v. Judd, 21 Wis. 262;Wright v. Sperry, 25 Wis. 617;Seeley v. Manning, 37 Wis. 574.

The mortgage being duly recorded when Bong deeded his interest in lot 15 to Schauer and he to defendant Holland, it requires some distinct act of denial on their part, of being in possession in subordination to plaintiff's rights, to terminate the acknowledged relation existing between the plaintiff as mortgagee and the mortgagor Bong and those holding under him to set adverse possession running. The record of the mortgage is constructive notice to all subsequent purchasers of the mortgagee's rights in the premises. Under such circumstances the mortgagor and those holding under him continue to hold in subordination to the mortgagee's rights, unless it be shown that their possession was in fact inconsistent with and adverse to the rights of the mortgagee. Maxwell v. Hartmann, 50 Wis. 660, 8 N. W. 103;Neilson v. Grignon, 85 Wis. 550, 55 N. W. 890;Erwin v. Lewis, 32 Wis. 276. The evidence fails to show any facts, aside from plaintiff's long delay of enforcing his claim, which tend to show that the defendant had entered into the possession of the premises and occupied them inconsistent with and adverse to the rights of the plaintiff as mortgagee under his recorded mortgage. Their possession could not, under the circumstances, become adverse except by positive and direct acts on their part sufficient to convey and bring to plaintiff's notice their hostile possession as to him. This, as the court found, is not established by the evidence, and therefore the claim that plaintiff lost his rights under the mortgage upon this ground must fail.

[4] It is contended that the plaintiff by his laches is precluded from enforcing the mortgage. In the case of Rogers v. Van Nortwick, 87 Wis. 414, 58 N. W. 757, this court declared that:

“A court of equity applies the rule of laches according to its own ideas of right and justice, and the courts have never prescribed any specific period applicable to every case, like the statute of limitations; and what constitutes a reasonable time within which the suit must be brought depends upon the facts and circumstances of each particular case.”

The court also there quotes approvingly the following:

“No rule of law is better settled than that a court of equity will not aid a party whose application is destitute of conscience, good faith, and reasonable diligence, and will discourage stale demands, for the peace of society, by refusing to interfere where there have been gross laches in prosecuting rights, or where long acquiescence in the assertion of adverse rights has occurred.”

In the recent case of Likens v. Likens, 136 Wis. 321, 117 N. W. 799, this court, referring to the nature and application of this defense, stated:

“The defense...