DeKeyser v. State Bank of Maplewood

Eschweiler/ J. The plaintiffs’ position in substance is, that inasmuch as the prior mortgage to the Bank of Algoma of $3,600 covered the property included in their subsequent mortgages and sixty acres in addition thereto, and such sixty acres being sold by the mortgagor prior to the sale on foreclosure, (though subsequent to the judgment therein), [66] the doctrine of sales of mortgaged premises in the inverse order of alienation required that the proceeds from the sixty-acres, so sold in January, 1925, at a paper price of $3,600, should be applied on the first mortgage, thereby relieving to that extent the 120 acres on which plaintiffs’ securities as well as the first mortgage rested. This doctrine as to the inverse order of alienation is the established law of this state. Goss v. Lester, 1 Wis. 43, 54; Worth v. Hill, 14 Wis. 559, 562; State v. Titus, 17 Wis. 241, 243; Andersen Yard Co. v. Citizens State Bank, 187 Wis. 60, 62, 203 N. W. 921. It is the rule elsewhere, although not universal. Neely v. Williams, 149 Fed. 60; 27 Cyc. 1219. This rule, however, has no application here. The pleadings by the plaintiffs and the entire record of the case, all subject to inspection, afforded a source of information upon which prospective bidders might rely, and showed the expressly recognized existence of the prior, subsisting mortgage lien of the $3,600 mortgage to the Bank of Algoma. Upon such pleadings and records bidders would be entitled, as against the plaintiffs at least, to assume that purchasers at a sale, had at plaintiffs’ instigation, would buy but the equity in the property and take it subject to such prior mortgage. Plaintiffs have not asked to have the sale set aside and a new one had, but now rely entirely upon a claim that could have been determined before the sale. By sec. 278.09, Stats., in the chapter on foreclosure of mortgages, ample provision is made in such an action, at any time after judgment and before a sale, for the bringing in of other parties, amending the proceedings, and to adjudicate such claims of priorities or rights as between any and all. The claim now made by plaintiffs should have been asserted by proper and timely application before the sale was had. Such was declared to be the proper method in Scott v. [67] Webster, 44 Wis. 185, 195; and in Aiken v. M. & St. P. R. Co. 37 Wis. 469, 480, it is declared that the proper place to have determined the order in which the 'mortgaged premises shall be sold is in the foreclosure judgment, or at least before the sale. Such method was followed in Worth v. Hill, 14 Wis. 559, 560, and State v. Titus, 17 Wis. 241, 245, supra. Having failed to assert the claim the plaintiffs now make at the proper time and place, and having permitted the sale to be made and having participated in the same, all under the record, as they permitted it to rest up to the time of the sale, they cannot now have the relief which was so properly denied them by the court below. The court was clearly right in denying to the Bank of Maplewood, as holder of the prior mortgage, any of the $5,800 proceeds of the sale, but as the bank has taken no steps to appeal from or review that portion of the order it will be given no further attention. By the Court. — Order affirmed.