Doyon & Rayne Lumber Co. v. Nichols

• Decision Date: 18 June 1928
• Citation: 220 N.W. 181,196 Wis. 387
• Parties: DOYON & RAYNE LUMBER CO. v. NICHOLS ET AL.
• Court: Wisconsin Supreme Court

196 Wis. 387

220 N.W. 181

DOYON & RAYNE LUMBER CO.

v.NICHOLS ET AL.

Supreme Court of Wisconsin.

June 18, 1928.

Appeal from a judgment of the Circuit Court for Dane County; A. G. Zimmerman, Circuit Judge. Affirmed.

This action is brought by the Doyon & Rayne Lumber Company against Harvey E. Nichols, owner, and various lien claimants to foreclose a mechanic's lien. During the trial a question arose between the defendants Conklin & Sons Company and W. E. Wiedner concerning the priority of respective mortgages held by Conklin & Sons Company and said W. E. Wiedner. From a judgment declaringthe Conklin & Sons mortgage prior to the Wiedner mortgage, the defendant W. E. Wiedner brings this appeal.

On and prior to the 12th day of November, 1924, the defendant H. E. Nichols was the owner of the following described lots, namely: Lots 1, 2, and the southwest half of lot 3, block 162, in the city of Madison. They constituted three distinct parcels of land. On and prior to said 12th day of November, 1924, said Nichols was constructing three apartment buildings upon said three parcels of land. During the process of construction various claims in the nature of mechanics' liens had accumulated against said premises. Nichols, being in financial difficulties and finding it necessary to raise some money, induced the lien claimants to waive their liens upon said land up to the amount of $125,000 to enable Nichols to mortgage the premises to the extent of $125,000, which mortgage or mortgages should take precedence of any lien rights such lien claimants might have had. This they did under date of November 12, 1924.

Nichols executed a first mortgage of $35,000 and a second mortgage of $15,000 against each parcel of land. He executed all of these mortgages, accompanied by notes for like amounts, to one Anton Metz. Anton Metz then indorsed the notes, and executed assignments of the mortgages in blank, and delivered said notes and assignments back to Nichols. He paid no consideration for the notes or the mortgages. The execution of the notes or the mortgages by Nichols to Metz and the assignment and the delivery of the notes and the assignments by Metz to Nichols, constituted a single transaction to permit Nichols to peddle the mortgages and thus raise money wherever he could. These mortgages were all dated October 27, 1924. One was recorded November 17, 1924, and the others on November 20 or 21, 1924.

The three $35,000 mortgages and one $15,000 mortgage, with which we are not concerned, were duly sold by Nichols, the assignments completed by filling in the name of the purchaser of the mortgage, and duly recorded. One mortgage of $15,000, covering the premises known as 333 Norris Court, was subsequently satisfied by Anton Metz. Thereafter, and on January 21, 1925, this same mortgage was re-recorded, and was then assigned to O. M. Nelson, Jr.; the assignment being recorded January 1, 1925. On the same date this mortgage was satisfied by O. M. Nelson, Jr., and on the same date Nichols and wife executed another mortgage to Conklin & Sons Company for $15,000 on the same premises, which was recorded on January 21, 1925. This mortgage will be referred to as the Conklin mortgage.

The second mortgage of $15,000 on the premises known as 336 Norris Court was held by Nichols until March 23, 1925. On this date he negotiated a loan from W. E. Wiedner, and, as a part of the collateral security, assigned said mortgage to W. E. Wiedner, which he accomplished by filling in the name of Wiedner in the blank assignment executed to...