Miller-Piehl Co. v. Mullen

The following opinion was filed November 4, 1919: Eschweiler, J. It appears without dispute that at the time of the execution of the mortgage of March 18, 1916, foreclosed in this action, the plaintiff’s assignor had actual kfiowledge of the fact that the Mullens were in possession of the house and premises included in such mortgage, and in the lien filed in June, 1915, and in the renewal thereof in the following November the defendants Mullen, as well as the defendants McCormick, were named as being the owners of said premises. There is some confusion and uncertainty as to just what was the consideration for the conveyance from the McCor-micks of the four acres and as to whether or not the one acre or the four acres had been paid for in full and for a fair consideration at the time the Mullens entered into pos [382] session and at the time of the execution of the mortgage in question. The court was specifically requested by appropriate motion, after the findings had been signed, to make a finding to the effect that full and complete consideration had been paid by the Mullens to the McCormicks at the time of taking possession in March, 1915, and refused to make such finding. The findings do determine, however, that negotiations were had for the purchase of the premises by warranty deed and that possession was taken pursuant thereto by the Mullens. It further appears without contradiction that Mullen cultivated the entire four acres from the time of taking possession of the house. There, is no finding and no testimony to the effect that at the time of the negotiations and agreement between the Mullens and the McCormicks for the conveyance of the four acres in question the Mullens were to assume or undertake to pay either the claim for the materials furnished in the building of the house or the mortgage in question. The mortgage, therefore, by Mrs. McCormick, then not the real owner and having only the record title and out of possession, conveyed no interest in the real estate to the mortgagee, who stood charged with knowledge of the rights of the Mullens as the real owners and in actual visible possession. It is urged here as it was in the court below that by the Mullens accépting with full knowledge and subsequently recording the warranty deed to them containing the clause “subject to a mortgage of $1,130,” they thereby so recognized the obligation of such apparent lien upon the premises as to now be a bar to their asserting its invalidity as against their own title. We think this point, however, is controlled by the decision of this court in the case of Bennett v. Keehn, 67 Wis. 154, 162, 29 N. W. 207, 30 N. W. 112, where the words used were “except a mortgage,” instead of the phrase, as here, “subject to a mortgage;” the language there used [383] being held not enough to prevent a grantee of the land from making a defense to such mortgage in the absence of a showing that there was an agreement on the part of the grantee that the mortgage should be paid as a part of the purchase price, and holding further that such an exception in a deed in the covenant against incumbrances is mere notice to the grantee of the existence of such mortgage, and therefore not the basis for any action for breach of the covenant against incumbrances, and no more. As to the effect of suchtclause as notice, the same rule has been held in Reichert v. Neuser, 93 Wis. 513, 517, 67 N. W. 939; Perkins v. Best, 94 Wis. 168, 175, 68 N. W. 762. The effect of such a clause, the payment of such mortgage being no part of the consideration between vendor and vendee, does not lessen the estate passing by the other terms of the deed. Welbon v. Welbon, 109 Mich. 356, 67 N. W. 338; L. R. A. 1917C, note p. 833. The fee passed by the deed, and not a mere equity of redemption. The case of Bennett v. Keehn, supra, on the point here has been repeatedly cited with approval in other jurisdictions. Sandwich Mfg. Co. v. Zellmer, 48 Minn. 408, 51 N. W. 379, 381; Smith v. Hogue, 19 N. Dak. 337, 123 N. W. 827; Stough v. Badger L. Co. 70 Kan. 713, 79 Pac. 737. It is further contended by plaintiff that the defendants Mullen taking possession of the house in the making of which were the materials for which the plaintiff’s assignor had a claim for lien, and with full knowledge of such facts, the premises should be charged as against them with at least so much of the mortgage sought to be foreclosed as includes such claim for material. The plaintiff’s assignor, however, by his filing of his claim for lien and by limiting it to one acre instead of the larger amount to which he may have been entitled under the statute, evidently waived it as to any additional property than the one acre. By accepting a mortgage securing a [384] promissory note which extended the payment of this indebtedness for the amount claimed as a lien to a period beyond that which the statute prescribed for the commencement, of an action to foreclose his lien, and by including other indebtedness than that for the amount of the mortgage, he thereby waived any subsequent right to assert his lien under the statute. Flenniken v. Liscoe, 64 Minn. 269, 66 N. W. 979; Westinghouse A. B. Co. v. K. C. S. R. Co. 137 Fed. 26, 71 C. C. A. 1, 2. This holding is not affected .by the section found in the mechanic’s lien law (sec. 3317, Stats.) providing that “the taking of a promissory note or other evidence of indebtedness for any such work, labor or materials done or furnished shall not discharge the lien therefor hereby given unless expressly received as payment therefor and so specified therein.” This statute has been repeatedly construed and always as referring to the taking of such a promissory note as falls due within the time within which the action to foreclose the lien could be commenced. Bailey v. Hull, 11 Wis. 289; Schmidt v. Gilson, 14 Wis. 514; Thien v. Brand, 142 Wis. 85, 86, 124 N. W. 999. See, also, 27 Cyc. 269. By the Court. — Judgment reversed, with directions to dismiss the complaint as to the defendants Mullen, and with directions to enter judgment against those personally liable. A motion for a rehearing was denied, with $25 costs, on January 13, 1920.