Winkler v. Magdeburg

• Decision Date: 20 September 1898
• Citation: 76 N.W. 332,100 Wis. 421
• Parties: WINKLER ET AL. v. MAGDEBURG.
• Court: Wisconsin Supreme Court

100 Wis. 421

76 N.W. 332

WINKLER ET AL.

v.MAGDEBURG.

Supreme Court of Wisconsin.

Sept. 20, 1898.

Appeals from superior court, Milwaukee county; George E. Sutherland, Judge.

Action by F. C. Winkler and others, executors of Rudolph Nunnemacher, deceased, against Frederick H. Magdeburg, assignee of Frederick Richter, and others. From the judgment, plaintiffs appeal; and, from an order, defendant Magdeburg appeals. Affirmed.

This was an action for the foreclosure of certain mortgages, and the complaint alleged: That the defendant Richter and wife, June 17, 1889, executed a mortgage of lots 6 and 7 in block 37 in the city of Milwaukee, to secure the note of said Richter for $6,000, of which $5,000 and interest remained due, which note and mortgage were held by the plaintiffs. Also, that they, on April 12, 1895, executed a mortgage of lots 5, 6, 7, and 14 in block 37 in the Second ward of the city of Milwaukee, and of the north half of lot 9 in block 63 in the Fourth ward of said city, to secure the notes of said Richter, amounting to $20,000, which, with accrued interest, remained wholly unpaid. That said notes and mortgages had been assigned to the plaintiffs prior to the 1st of January, 1896. That on the 9th of May, 1896, they being the owners and holders of said notes and mortgages and the indebtedness secured thereby, the defendant Richter, for value received, in addition to said notes and mortgages, made his promissory note in writing, dated May 9, 1896, whereby he promised to pay to the order of the estate of Rudolph Nunnemacher (the plaintiffs being then and there the legal representatives of said estate, and the executors of said Nunnemacher, deceased) the sum of $4,000, with interest at the rate of 6 per cent. per annum, payable semiannually, and delivered the same to the plaintiffs, and deposited with them, as collateral security for the payment of said note, 43 shares of the capital stock of the Concordia Fire Insurance Company. That the defendants, in and by the terms of said promissory note, gave to the legal holder thereof authority to sell the said 43 shares of stock, or any part thereof, on the maturity of said note, or at any time thereafter, without advertising the same, or demanding payment, or giving any notice, and to apply so much of the proceeds thereof to the payment of the said note as might be necessary to pay the same, with all interest due and all expenses attending the sale of the securities, including attorney's fees. That in and by said note it was specially agreed that at such sale the holder thereof might become the purchaser of the whole or any part of said collaterals; and that, “if recourse was had to said collaterals, any excess of collaterals upon said note should be applicable to any other note or claim held by said holder against the maker thereof.” The defendant Richter became insolvent prior to the maturity of the note, and on the 3d of May, 1897, made an assignment for the benefit of his creditors, pursuant to the statute in such case made and provided; and the defendant Magdeburg became and was his assignee, and entered upon his duties as such. Said $4,000 note was not paid at maturity, and the plaintiffs gave notice to the defendant Magdeburg, the assignee of the defendant Richter, of the terms of said note, and that they would cause said 43 shares of stock to be sold at their office, May 24, 1897, at 10 o'clock in the forenoon, and would apply the proceeds of said sale, first, to the payment of said note, and the excess, if any, to other obligations of said Frederick Richter held by said plaintiffs. That like notice was on or about the same day given to the defendant Richter. That, after the giving of such notice, the defendants Magdeburg and Richter requested said plaintiffs to postpone said sale, in order that a fair price might be realized for said collaterals; and, by agreement, the sale was postponed to the 2d of June, at 10 o'clock in the forenoon, at the same place. After said postponement had been agreed on, said Magdeburg tendered to the plaintiffs the amount due on said $4,000 promissory note, dated May 9, 1896, for principal and interest, and demanded the surrender of said collaterals. That it was then well known that there was an excess in said collaterals over and above the amount due upon the said note, whereupon the plaintiffs claimed that, by the terms of said note, they were entitled to the application of such excess to the said other notes so held by them as aforesaid. That the plaintiffs did not accept said moneys so tendered them, nor surrender said certificates of stock; and the plaintiffs alleged that said proposed payment of said note by said assignee was, in point of fact, an attempt to pay said note out of said collaterals, when the said assignee had in his possession, as such, no means for paying the same; nor had the same been proved as a claim against the estate represented by him, but he had procured the money to make said tender upon the faith and credit of said collaterals only, and expected to repay the same out of a sale thereof which he expected to be able to make in a very short time, and thus to turn said collaterals to the payment of the note, and secure to himself as assignee the surplus value thereof. The plaintiffs also claimed that by reason of recourse had to said collaterals for the purpose of paying the $4,000 note, aforesaid, they were entitled to the excess of said collaterals over and above the amount due on said note, to apply on the notes hereinbefore set forth, and then so held by them. It was alleged and shown that after the notice of sale and adjournment thereof, so agreed upon, the plaintiffs, June 2, 1897, caused said 43 shares of stock to be sold at public auction to the highest bidder, for the sum of $7,052; that the plaintiffs paid for expenses of sale, including attorney's fees, $100, alleged to be a just and reasonable sum, realizing from the sale of said collaterals the sum of $6,952; and that there was due upon said note of $4,000, dated May 9, 1896, with interest to May 29, 1897, the sum of $4,253.33, leaving a surplus to be disposed of in the hands of the plaintiff of $2,698.67, which they claimed to be entitled to hold, and to apply on...