De Keyser v. O'Hern

• Decision Date: 11 October 1927
• Parties: DE KEYSER ET AL. v. O'HERN ET AL.
• Court: Wisconsin Supreme Court

194 Wis. 61

215 N.W. 444

DE KEYSER ET AL.

v.O'HERN ET AL.

Supreme Court of Wisconsin.

Oct. 11, 1927.

Appeal from part of an order of the Circuit Court for Door County; Henry Graass, Circuit Judge. Affirmed.

Mortgage foreclosure action by John De Keyser and another against Edward O'Hern, the State Bank of Maplewood, and others. From so much of an order as denied plaintiffs relief against first mortgage, plaintiffs appeal.--[By Editorial Staff.]

Foreclosure commenced as to defendant O'Hern on January 28th and as to the other defendants on March 17, 1924, of two mortgages, each of June 26, 1920, and one of July 16, 1921, of $3,000, $2,500 and $1,000, respectively, given by the defendant Edward O'Hern to the plaintiffs, brothers, John and Frank De Keyser. No question is presented of priority between such three mortgages.

At the time of the giving of such mortgages the defendant Edward O'Hern owned 180 acres of land in said county, referred to hereinafter for convenience by letters, as follows: A, 80 acres in section 19; B, 40 acres in section 24; C, 40 acres, and D, 20 acres, in section 13.

The three mortgages of plaintiffs covered the 120 acres, A and B. There was outstanding a prior recorded mortgage on A, B, C, and D, by defendant Edward O'Hern of March 28, 1918, for $3,600, given to the defendant Bank of Algoma.

September 27, 1921, a $600 mortgage was given on A and B to the defendant Merchants' Exchange Bank, but no question concerning it is here involved.

November 16, 1923, Edward O'Hern gives to the defendant State Bank of Maplewood a mortgage on A, B, C, and D for $3,345.

March 3, 1924, the Bank of Algoma assigned to said Bank of Maplewood the mortgage of $3,600, the assignment recorded March 6th and prior to the commencement of this foreclosure as against the two banks, the lis pendens herein being recorded on April 8, 1924.

The complaint, among other things, alleged in effect that prior to the execution of plaintiffs' mortgages the defendant Edward O'Hern falsely and fraudulently represented that the lands covered by the said mortgages, to wit, A and B, were free and clear of prior liens and incumbrances, and that such would be first liens upon said 120 acres.

It was further alleged in the complaint, verified by both plaintiffs, that, as a matter of fact, at the time of the aforesaid misrepresentations there was an outstanding, existing, mortgage lien against said property by reason of the $3,600 mortgage to the Bank of Algoma aforesaid, and that there was still unpaid thereon the said sum at the time of the commencement of this action.

It was further alleged that the defendants Merchants' Exchange Bank, State Bank of Maplewood, and Bank of Algoma have or claim to have some interest or lien upon the said premises, or some part thereof, subsequent to the lien of the three mortgages to plaintiffs, and that such lien of the Bank of Algoma is by reason of a judgment in its favor of May, 1923. The complaint contains the usual prayers for relief and for the sale of the property unless redeemed.

The action was referred to have determined the amounts due and as to whether the property could be sold in parcels, etc. The referee reported thereon May 19, 1924, after testimony from the two plaintiffs and another had been received.

Judgment was entered in the usual form on May 26, 1924.

January 15, 1925, the following transactions were had:

The Bank of Maplewood for the alleged consideration of $1,800 released from its mortgage of November, 1923, aforesaid, the last in point of time, the 60 acres included in C and D; it also released, in consideration of the recited sum of $849.49 (being the accrued interest), C and D from the first mortgage to the Bank of Algoma, of which it held the assignment, supra.

Edward O'Hern, grantor in all of the aforesaid mortgages, gave a warranty deed of the 60 acres (C and D), for the recited consideration of $3,600, to the defendants, his brother Joseph O'Hern, and the latter's wife, Frances.

Joseph O'Hern and wife gave a $2,500 mortgage to the Bank of Maplewood and to Edward O'Hern a subsequent mortgage for $1,100, all on the same 60 acres, C and D.

Edward O'Hern assigned the aforesaid $1,100 mortgage to the Bank of Maplewood. The $3,600 consideration for the sale to the defendants Joseph and his wife being represented by the two mortgages of $2,500 and $1,100, the $849.49 was applied in payment of the interest then due on the first mortgage; the Bank of Maplewood applied the above-mentioned $1,800 on its mortgage of November, 1923, for $3,345, supra, and then held the $1,100 assigned note and mortgage aforesaid, so pledged, to secure $585 of other obligations owed by Edward O'Hern to the Maplewood Bank, any surplus, plus interest, from the $1,100 mortgage was to be applied, if and when paid, on the $3,600 mortgage. There was no cash consideration paid on these transactions, all of which took place at the Bank of Maplewood.

The said deed, mortgages, and releases of January 15th were recorded January 16 and 17, 1925.

July 11, 1925, after due proceedings, the 120 acres, A and B, so covered by the three mortgages of pl...