Paul v. Smith

• Decision Date: 26 June 1934
• Parties: PAUL ET AL. v. SMITH.
• Court: Wisconsin Supreme Court

215 Wis. 613

255 N.W. 919

PAUL ET AL.

v.SMITH.

Supreme Court of Wisconsin.

June 26, 1934.

Appeal from a judgment of the Circuit Court for Fond du Lac County; Edward Voigt, Circuit Judge.

Action by John Paul and another against Charles A. Smith, executor of the estate of William Smith, deceased. From a judgment dismissing the complaint, plaintiffs appeal.--[By Editorial Staff.]

Affirmed.

Action by plaintiffs, John Paul and Anna Paul, to have a warranty deed, which was executed by them and delivered to the defendant, William Smith, declared to be a mortgage. Upon findings of fact and conclusions made by the court after a trial upon the merits, judgment was entered dismissing the complaint. Plaintiffs appealed from that judgment.

Lehner & Lehner, of Princeton, for appellants.

Allan L. Edgarton and T. L. Doyle, both of Fond du Lac, for respondent.

FRITZ, Justice.

[1] The question of the validity of a deed of the mortgaged premises, which was given by a mortgagor to the mortgagee in settlement and in discharge of the mortgage indebtedness, has been considered by this court in a number of cases. Smith v. Crosby, 47 Wis. 160, 2 N. W. 104;Rockwell v. Humphrey, 57 Wis. 410, 15 N. W. 394;Kunert v. Strong, 103 Wis. 70, 79 N. W. 32;Lynch v. Ryan, 132 Wis. 271, 111 N. W. 707, 708, 112 N. W. 427;Young v. Miner, 141 Wis. 501, 124 N. W. 660;Coates v. Marsden, 142 Wis. 106, 124 N. W. 1057;Gutschenritter v. Hosterman, 201 Wis. 558, 230 N. W. 610. It was settled in those cases that, in order to sustain such a conveyance as valid, it must be established by clear and satisfactory proof, upon closely scrutinizing the transaction, that the conveyance was voluntary on the part of the mortgagor; based on an adequate consideration; untainted by fraud; made without advantage being taken of the debtor's necessity to drive a hard bargain; and that there was a discharge of the mortgage indebtedness or at least a binding agreement to consider that indebtedness paid and discharged. As was said in Lynch v. Ryan, supra: “Such transactions will be closely scrutinized, and if the proof be clear and satisfactory that the requirements above named have been observed, the transaction will be sustained, otherwise not. In doubtful cases, the courts incline to hold that the mortgage relation still exists.”

The record discloses that those propositions were fully recognized and appreciated by the learned circuit judge, as well as by counsel for all parties in this case. With those rules manifestly well in mind, the court found that on October 17, 1931, plaintiffs, who were then mortgagors, conveyed by warranty deed all of their equity of redemption and interest in the farm in question to the defendant, WilliamSmith, who was the holder of the mortgage which had been given on the farm by plaintiffs to secure their note, upon which the sum of $15,650 was then due for principal and interest; that the value of that farm was between $14,000 and $15,000 in 1931, and between $12,000 and $14,000 in 1932 and 1933; that plaintiffs willingly and voluntarily executed and delivered the deed to the defendant; that at that time the defendant paid to plaintiffs $500 in cash, and,...