Levy v. Martin

Decision Date07 January 1880
Citation4 N.W. 35,48 Wis. 198
PartiesLEVY v. MARTIN, imp
CourtWisconsin Supreme Court

Argued October 14, 1879

APPEAL from the Circuit Court for Milwaukee County.

I. In October, 1869, Charles Eul and his wife, Mary Ann Eul executed a mortgage of land to Matthew Martin, to secure a note of even date given by said Charles to Martin, for $ 600 payable in three years, with interest at ten per cent. The mortgage contained a provision for paying a solicitor's fee of $ 50 in case of a foreclosure; and it was immediately recorded. Charles Eul was the owner in fee of the mortgaged premises from the date of the mortgage until his death November 30, 1870. He left surviving him his said wife, and several infant children; and by his will (duly admitted to probate) the mortgaged land was devised in equal undivided parts to his children, subject to the life estate of his widow; and he left no other property. At the time of his death he was indebted to Martin in the full sum secured by the mortgage.

II. In April, 1873, said Mary Ann Eul, widow of Charles Eul, having intermarried with one Richter, she and Richter mortgaged the same real estate to Martin to secure a loan to them of $ 400 and in April, 1874, they executed another like mortgage of the same property to Martin for another loan of the same amount. In his answer herein Martin alleges that these sums were borrowed and used for the purpose of making necessary and permanent improvements and repairs on the premises, with the assent and approval of the executors and of all persons interested in the estate; but the court found that the moneys were not so used.

III. In December, 1876, the executors of the will presented a petition to the county court, stating that the principal sum secured by the $ 600 Martin mortgage, with interest from April 1, 1876, was due and unpaid, and that Martin was pressing the payment, and was about to commence foreclosure; and praying for license to make a new loan, secured by mortgage of the same land, of a sum sufficient to pay the amount due on said $ 600 Martin mortgage, together with the taxes theretofore assessed against said premises, and the expenses of administration. In January, 1877, the county court made an order directing the executors to mortgage the land to secure a loan not exceeding $ 800, with interest at ten per cent., for the purposes above named. On the 31st of the same month, the executors applied to the plaintiff, Levy, for a loan of $ 800, stating that they were duly authorized to borrow that sum and to execute a mortgage therefor which would be a first lien on said real estate, and agreeing with him that if he would loan the money they would, in addition to giving him such new mortgage, procure and deliver to him said $ 600 Martin mortgage, with an assignment by Martin. For the purposes and upon the representations above stated, plaintiff lent them $ 800, which was applied for said purposes; and the executors in both their representative and individual characters, executed to him a note for the amount, payable in two years, with interest at ten per cent., secured by mortgage on said real estate, with a clause for the payment of $ 75 as solicitor's fee in case of a foreclosure; and this mortgage was duly recorded. The execution of such mortgage was reported to the county court by the executors, and an order of confirmation there made. All the proceedings in the county court were regular, except that no guardian was appointed to represent the infants therein. The executors did not procure an assignment to plaintiff of the Martin $ 600 note and mortgage, but delivered to him the note and mortgage with a release thereof, which was recorded. No payment has been made on the executors' mortgage except the interest for one year. The executors, in their individual character, are insolvent.

This action was brought to foreclose the $ 800 mortgage given by the executors; and the plaintiff, after alleging the facts set forth in paragraphs I and III, supra, further prays that the money advanced by him may be declared a lien upon the real estate in question; that he may be subrogated to all the rights of Martin under said $ 600 mortgage; that the satisfaction of said mortgage may be cancelled, and the mortgage declared a continuing lien upon the premises; that all the defendants may be barred and foreclosed, etc.; that the premises may be sold, unless redeemed as provided by law, to make the amount of plaintiff's said advances, with interest, costs and $ 75 solicitor's fees, etc.

The executors did not answer. Martin answered, setting up the facts stated in paragraph II, supra. His answer also denies that the executors ever promised to obtain from him an assignment to plaintiff of the $ 600 note and mortgage, or that plaintiff, in making his loan to them, relied upon any such promise or understanding, and avers that the money obtained from plaintiff was paid to him (Martin) for the sole purpose of satisfying and extinguishing said $ 600 note and mortgage, as was well understood by the plaintiff, and that plaintiff never claimed that those securities should have been assigned to him until after the commencement of this action.

The infant children of the testator, Charles Eul, appeared by guardian ad litem, and answered, setting up the want of notice to them of the application of the executors for a license to give the $ 800 mortgage, and also claiming that plaintiff ought not to be subrogated to the former rights of Martin under the $ 600 mortgage, because the payment of that sum by him was voluntary.

When the cause was at issue, Martin moved for a change in the place of trial for prejudice of the circuit judge; but the motion was denied.

The facts found by the court are stated substantially in paragraphs I to III, supra. Upon those facts the court held that the plaintiff was entitled to a judgment, against all the defendants, of foreclosure and sale of the real estate in question, to make the amount of his $ 800 mortgage, with interest and costs, and $ 50 as solicitor's fee. From a judgment in pursuance of this determination, Martin appealed.

Reversed and cause remanded.

For the appellant, there was a brief by Markhams & Smith, and oral argument by E. P. Smith. Among other things, they contended, 1. That the defendant Martin, upon filing his affidavit, had an unconditional right to a change of venue; the objections taken in Wolcott v. Wolcott, 32 Wis. 63, and Taylor v. Lucas, 43 Wis. 158, having no application to a case in equity against a party in default, or one answering severally, or one having a common interest but appearing by a separate attorney. R. S., § 2525; 1 Van Santv. Eq. Pr., 258, and cases cited; Vorhees' Code, 9th ed., 147; Brittan v. Peabody, 4 Hill 62, note; Job v. Butterfield, 5 Exch., 827. 2. That the circuit court had, upon the case made, no jurisdiction in equity to grant the relief sought. It did not appear but that the statutory remedy was ample, by application to the probate court for leave to mortgage or to sell the equity of redemption. R. S., § 3878; Batchelder v. Batchelder, 20 Wis. 452; Brown's Appeal, 66 Pa. 155; Bresee v. Stiles, 22 Wis. 120; O'Dell v. Rogers, 44 Wis. 173. 3. That there was no ground for declaring an equitable lien, or for the application of the doctrine of subrogation. In general, one creditor has no priority over another on the ground that he advanced the money out of which the debtor's property was made. Morton v. Naylor, 1 Hill 583; Hoyt v. Story, 3 Barb., 262; Burn v. Carvalho, 4 Mylne & C., 690; Watson v. Wellington, 1 Russ. & M., 602; Miller v. Price, 20 Wis. 117. The case was that of an ordinary loan to pay a debt, except that it was necessarily made under a judicial license; but the lender, as in other cases, had it in his power to assure himself that the security was ample. He cannot now claim to be subrogated to the rights of the creditor. Downer v. Miller, 15 Wis. 627; Miller v. Price, 20 Wis. 117; Pelton v. Knapp, 21 Wis. 63; Watson v. Wilcox, 39 Wis. 643; Sanford v. McLean, 3 Paige, 117; Banta v. Garmo, 1 Sandf. Ch., 383. Nor could the executors, by paying taxes, create a lien in favor of the person who loaned the money so used, superior to all other private liens. Horton v. Ingersoll, 13 Mich., 409; Wilcox v. Bates, 45 Wis. 145; 2 Washb. R. P., 229, 230. But whatever might be thought of the question of equitable lien were there no intervening rights, it is clear that where such rights exist, the lien cannot be declared except as subject to them. Pelton v. Knapp, 21 Wis. 69; Patterson v. Pope, 5 Dana, 241; Jenkins v. Continental Ins. Co., 12 How. Pr., 68; Jones on Mort., § 1081. The relief sought would compel the appellant, against his will, to transfer to a third party a mortgage wholly paid for with his own funds, and held as a protection to his subsequent liens, and thereby render it incumbent upon him to redeem from the same security, no matter at what disadvantage or cost. He may well decline to again assume the relation of creditor to the mortgagor under such circumstances. There might be some reason in plaintiff's demand had he been obliged to pay this mortgage in order to protect other interests; but he was a mere volunteer. It is not claimed that he would have the right of subrogation were the executor's mortgage valid; then why when it is invalid? The mortgage sought to be revived was paid, intentionally and absolutely. It would seem that by such payment it had become effectually blotted out. Story's Eq. Jur., §§ 499, note 1, and 1227; Guy v. Du Uprey, 16 Cal., 195; Palmer v. Yager, 20 Wis. 91.

For the respondent, there was a brief by Leander Wyman, with Frank B Van Valkenburgh' of counsel, and oral argument by Mr. Van Valkenburgh. As to the propriety of the order...

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