Mueller v. Brigham

Cassoday, J. In actions to foreclose mortgages .courts aré expressly empowered, at any time after judgment and before sale, to grant leave to amend the summons, complaint, and all [176] the proceedings in the action, by making a defendant any person who is a proper or necessary party; and to allow- such party to answer and defend in like manner as if he had been originally made a party thereto; and to amend the original judgment so as to bar and foreclose him thereby, or to make any provisions in regard to his rights and interests, in like manner as he could have done had he been made originally a party. Section 3161, R. S. The application of the petitioners to be made parties defendant and allowed to defend was made in time under this statute; but the complaint was not in fact amended on such application, nor they made parties nor allowed to defend, until after the sale. In the absence of such a statute, or had no such application been made until after the sale, the court, probably, would have been authorized to remit the petitioners to their remedy by bill to redeem. Pratt v. Frear, 13 Wis., 462. But here the court, after the sale, upon the application made before the sale, granted the prayer of the petitioners, and, with the apparent acquiescence of all parties, the sale was allowed to be made, and then the controversy was transferred from the mortgaged premises to the proceeds of such sale which had been paid into court; and no objection is made, and apparently none has been made, to the regularity of the proceedings. It is conceded that the plaintiff had full knowledge of the existence of the Cary mortgage at the time he took his mortgage dated December 4, 1873. Section 2241, R. S., only protects subsequent purchasers in good faith for a valuable consideration, and not those who purchase with the knowledge of an outstanding unrecorded mortgage. In such case, to purchase in good faith is to purchase without knowledge of the outstanding incumbrance, or any information sufficient to put the purchaser upon inquiry. Mere suspicion or rumor of payment is not sufficient to do away with the effect of such knowledge. This, in effect, has often been held by this court, as appears from the authorities cited by counsel for the [177] appellants. See also Erwin v. Lewis, 32 Wis., 276; Gilbert v. Jess, 31 Wis., 110. Here the plaintiff asks protection against the Cary mortgage, on the ground that when he made the second loan to Lehfeldt he inquired of him as to the purchase money, and was informed that it was all right; that it was all fixed up; and that the Cary mortgage did not appear on the abstract. The answer of Lehfeldt was, to say the least, equivocal, and, in our judgment, the evidence fails to bring the plaintiff within the protection of the statute. The plaintiff apparently thought that an unrecorded mortgage was inoperative even against one having knowledge of its existence, and hence made no effort to ascertain the facts from Cary. He evidently knew of the Cary mortgage being unpaid before the foreclosure, and yet he did not make him a party. It is well settled that the court has no authority to relieve a party from a misconception of the law upon a given state of facts. With our view of the case and the evidence, we are clearly of the opinion that the appellants are entitled to so much of the money paid into court as is sufficient to satisfy the amount unpaid on the Cary notes and mortgage, together with their taxable costs and disbursements in the litigation. By the Court. — The judgment of the circuit court appealed from is reversed, and the causé is remanded with direction to enter judgment in favor of the appellants in accordance with this opinion.