Macloon v. Smith
| Decision Date | 20 April 1880 |
| Citation | 5 N.W. 336,49 Wis. 200 |
| Parties | MACLOON v. SMITH, imp |
| Court | Wisconsin Supreme Court |
Argued April 1, 1880
APPEAL from the Circuit Court for Rock County.
Action to foreclose a mortgage given by J. Maurice Smith and wife to William Macloon.
I. July 31, 1876, J. Maurice Smith entered into an agreement with the plaintiff, which recited that the said Smith and one Ford were joint owners, each owning an undivided one-half of certain premises; that they had made a contract with the United States to erect a building on such premises, and to rent a portion of the same to the United States, and a similar contract to rent a portion of said building to the city of Janesville, and that a judgment of $ 750 had been recovered and was then in full force against said J. M Smith, in the circuit court of the United States for the western district of Wisconsin. It then provided that said J M. Smith should without delay convey his interest in the premises to the plaintiff; that plaintiff and Ford should erect the building for the use of the United States; that plaintiff should keep an account of all moneys necessarily paid out by him in the erection and furnishing of said building; that upon the completion of the building the plaintiff and Ford should execute leases to the United States and the city of Janesville; that the plaintiff should then reconvey to J. M. Smith the undivided one-half of the premises, and at the same time make and present to said J. M Smith a statement of moneys paid out and to be paid out by him in the construction and furnishing of the building, with interest on sums paid out at the rate of ten per cent. per annum from the date of payment; that said J. M. Smith at that time should execute and deliver to plaintiff his promissory note for the amount shown by said statement, payable in five years with interest at ten per cent. per annum, payable quarter-yearly, and also a mortgage, to secure said note upon said undivided one-half of the premises described; that as further security for the amount mentioned in said note, the plaintiff should hold an undivided one-half interest in the leases executed by himself and Ford to the United States and the city of Janesville, and should collect one-half the rents, and out of such rents pay the amount due for interest on said note and mortgage and for taxes, assessments and insurance, paying the residue of said rents to J. M. Smith; that in case Smith should be unable to procure the above mentioned judgment of $ 750 to be vacated or discharged, and plaintiff should be of the opinion that it was necessary for the purpose of procuring and making said leases, he might have said judgment discharged of record, and the amount paid by him for that purpose should be included in the statement above mentioned, and in said note and mortgage, in the same manner as though such sum had been paid out in the construction of said building.
II. In pursuance of such agreement, J. M. Smith and his wife and one Mary C. Smith executed and delivered to plaintiff a warranty deed of an undivided one-half of the premises, dated July 31, 1876; plaintiff and Ford erected and completed the building, and leased a portion thereof to the United States; plaintiff then presented to J. M. Smith a statement of the moneys paid out by him on account of said building, to the amount of $ 6,663.23, and reconveyed the premises to J. M. Smith by warranty deed dated February 1, 1878; J. M. Smith accepted this deed, and, on the same day, executed and delivered to plaintiff his note for $ 6,663.23, payable in five years, with interest at ten per cent., payable quarter-yearly on the first days of January, April, July, and October; and, to secure this note, J. M. Smith and his wife, on the same day, executed and delivered to plaintiff the mortgage in suit, of the undivided half of the premises. The mortgage contains the following provision: "In case of the nonpayment of any sum of money (either of principal, interest, insurance or taxes) at the time or times when the same shall become due agreeably to the conditions of these presents or of the aforesaid note, or any part thereof, or within ten days thereafter, the whole amount of said principal sum shall, at the option of said mortgagee, be deemed to have become due," etc.
July 12 and 13, 1878, the plaintiff served upon the mortgagors notice in writing that there was due and unpaid on said note and mortgage, July 1, 1878, the sum of $ 87.16, and that, the same not having been paid within ten days thereafter, the plaintiff elected and declared the whole amount secured by said note and mortgage to be due.
III. This action was commenced August 3, 1878. The complaint is in the usual form. The parties defendant were J. Maurice Smith and wife, the mortgagors, Mary B. Smith, a subsequent mortgagee, and Franklin Whitaker, a judgment creditor. The defendant J. Maurice Smith alone answered. The answer consists of, 1. A counterclaim and defense; and 2. A further and separate defense.
(1.) The former admits the making of the note and mortgage of February 1, 1878, but denies that the defendant was at that time indebted to the plaintiff in any greater sum than $ 4,861. It further alleges that such indebtedness arose upon the agreement of July 31, 1876 (which is set forth in full); that by such agreement the defendant "had agreed to convey or cause to be conveyed the lands described in the complaint, to the plaintiff, upon certain trusts and as security for moneys advanced or to be advanced; and that the plaintiff, so holding the title to said lands, refused to convey as he had agreed to do, unless defendant would include in said note and mortgage the unjust and fraudulent claims for money unjustly and fraudulently expended or claimed to be, and so, by duress of estate and not of his own free will, defendant was forced to include in said note and mortgage the sum of $ 1,802.25, or thereabouts, in excess of the amount actually owing by the said defendant on the said agreement; that said note and mortgage were made to extricate the title from the unjust grasp of the plaintiff, and as the only means of so doing except by litigation;" that a part of the said $ 1,802.25 was the sum of $ 1,002.25 paid to satisfy the judgment against defendant mentioned in the agreement; that such judgment was void, and the payment thereof by the plaintiff unjust and fraudulent; but that, under duress and compulsion, the defendant included the sum so paid in the note and mortgage; that, "under like duress and compulsion," he included therein the unnecessary expense of a marble floor in said building, and other sums wasted in finishing the same, amounting in the aggregate, including said sum of $ 1,002.25, to $ 1,802.25. It further alleges that, in pursuance of the agreement of July 31, 1876, the plaintiff had collected rents more than sufficient to pay all insurance, taxes and assessments on said premises, and interest on said note and mortgage; that he had neglected and refused to render any account of the rents and profits so received or of the moneys paid out by him for insurance, taxes, etc. It further alleges that the agreement and deed of July 31, 1876, together constituted a mortgage; that the deed of February 1, 1878, from plaintiff to defendant, was in effect only an assignment of such mortgage, and vested no estate in lands in defendant beyond a mere mortgage lien; and that the mortgage of February 1, 1878, was and is in law a mortgage on said prior mortgage, to secure the purchase money on the sale and conveyance of said prior mortgage lien. It further alleges that the interest on the note and mortgage of February 1, 1878, payable, by the terms thereof, July 1, 1878, being entitled to grace, was not due until July 4, 1878; and that the election of plaintiff to have the whole sum become due, having been made within ten days after July 4, was premature and of no effect.
(2.) The second and separate defense alleges that at the time of the agreement and deed of July 31, 1876, Mary C. Smith was the owner of the premises in question; that on the 17th day of March, 1877, the defendant and his wife executed and delivered a warranty deed of said premises to Mary C. Smith, which was recorded on the same day; that the deed of February 1, 1878, from plaintiff to defendant, was made in violation of the right and against the remonstrance of Mary C. Smith; that said Mary C. Smith was, at the time of the commencement of this action, and still is, the owner of said premises; and that, she not being a party to the action, "the court has not jurisdiction of the subject matter of the action to render a judgment of foreclosure and sale."
IV. Upon the trial, the court excluded all testimony tending to prove the counterclaim, and all testimony upon the question whether or not Mary C. Smith should be a party to the suit.
The court found the facts substantially as stated in paragraphs I and II, above, and further, that there was due on the note for interest, July 1, 1878, the sum of $ 136.50, after deducting all payments of rent to that date, and that, by reason of the service of the notice by plaintiff on the mortgagors, July 12 and 13, 1878, the whole sum became due and payable. From a judgment of foreclosure and sale in favor of the plaintiff, J. Maurice Smith appealed.
Judgment affirmed.
A. Hyatt Smith, for appellant:
For the purposes of this appeal the answer will be held conclusive upon all facts with regard to which testimony was excluded. Sheridan v. R. R. Co., 36 N. Y., 39; People v. Roe, 1 Hill, 470; Kelly v. Dutch Church, 2 id., 105.
1. The court erred in ruling out the testimony offered in support of the counterclaim and defense. It is alleged therein that the note and mortgage were made under...
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