Bresnahan v. Bresnahan , 46 Wis. 385 ( 1879 )

Lvorr, J.

We think the learned circuit judge erred in holding that the mortgage in suit was given to secure the payment of $2,200, andin giving judgment accordingly. It is apparent that no such covenant was in the minds of the parties, but that the mortgage was given to secure the performance, by the defendant John Bresnahan, of the covenants contained in the conditions of his bond, and those only. True, the condition of the mortgage is to pay $2,200; but it is to pay the same according to the condition of the bond, and we find in the bond no covenant to pay $2,200, or any other specific aggregate sum; neither is there any stipulation that the $2,200 named in the penal portion of the bond was intended to be liquidated damages. Under well settled rules, the sum so named must be regarded as a penalty. Berrinkott v. Traphagen, 39 Wis., 219; Yenner v. Hammond, 36 id., 277.

Although the testimony is not as clear and satisfactory as might he desired, we do not feel at liberty to disturb the findings of the learned circuit judge, that the defendant John has not always treated the plaintiffs with kindness and forbearance, nor maintained them in a manner suitable to their condition in life. We are unable to say that these findings are not sustained by a preponderance of evidence. It is admitted that the defendant John has failed to pay the taxes on the mortgaged premises for the year 1877, and that the land has been sold therefor; also that John has not paid all of his father’s debts, and that one creditor has prosecuted his demand to judgment and execution against the father, and to satisfy the same has advertised a portion of the mortgaged premises for sale under the execution.

On the authority of Bogie v. Bogie, 41 Wis., 209, these breaches of the conditions of the bond and mortgage are sufficient, on proper pleadings, to warrant a judgment rescinding the conveyance of the real estate, and the bill of sale of the personal property, executed by the plaintiffs to their son. The complaint prays a rescission of the bill of sale; hence that portion of the judgment which rescinds it as to the personal property not disposed of, is unobjectionable.

The complaint contains no prayer that the conveyance to John of the real estate be rescinded, but asks that the mortgage be foreclosed. Had the action been for a rescission of such conveyance, that relief should have been granted. We perceive no difficulty, however, in the way of granting equivalent relief under the complaint in its present form. Instead of rescinding the conveyance, we think the court may give judgment in the nature of a strict foreclosure, to the effect that, by reason of the breaches of the condition of the bond for the maintenance of the plaintiffs, the defendants have lost their equity of redemption in the mortgaged premises, and that the whole title thereto has thereby become vested absolutely in the plaintiffs. Such a judgment will confirm the plaintiffs’.title as effectually as would a judgment rescinding their conveyance to John.

Manifestly, this action is not within the statute which provides that in an action to foreclose a mortgage upon real estate, if the plaintiff recover, the court shall render judgment of foreclosure and sale, etc. R. S., 816, sec. 3154. The statute relates only to cases of foreclosure where there is an outstanding equity of redemption in the mortgaged premises. The requirement that the premises be sold, is for the benefit of the owner of such equity of redemption and those interested in the estate under or through him. RTo such reason for a sale exists in this case; for, although the instrument sought to be foreclosed is in the form of a mortgage, and in its inception was a mortgage, by the default of the mortgagors it has become, in fact, an absolute conveyance to the plaintiffs. The judgment above suggested will establish the true character of the instrument, and is, we think, the only judgment in that behalf which can be upheld by the pleadings, proofs and findings in the case. The prayer for a sale of the mortgaged premises may be disregarded.

The case seems to be the same in principle as it would have been had the mortgagors released their equity of redemption by deed to the mortgagees. In that case the mortgage and release would vest the whole title in the mortgagees, and in a proper action the court would so adjudge without ordering a sale of the premises. Although the action might be in form for a foreclosure, in substance and effect it would be an action to remove an apparent cloud upon the title of the owner, to wit, the defeasance in the mortgage. Of course such an action would be unnecessary if the release is recorded, but might be necessary in case the release should be lost or destroyed without being recorded. It may be that an action to establish the release would be preferable, yet no good reason is perceived why equivalent relief could not be given in an action to bar and foreclose the apparent interest of the mortgagor in the mortgaged premises, but which, in fact, he has released to the mortgagee. The only difference between such a case and the case under consideration is, that in one the equity of redemption is released to the mortgagee by deed, while in the other it is released by operation of law, resulting from the default of the mortgagor. In either case the mortgage is a conditional conveyance of the land to the mortgagee, and the right of the mortgagor to perform the condition and obtain a reconveyance is absolutely lost.

It is scarcely necessary to say, after what has already been said, that no time to redeem should be given, because there is no outstanding equity of redemption, and no person is entitled to redeem. The judgment should be absolute in the first instance.

• The circuit judge found “ that the personal property disposed of by the defendant John Bresnahcm, and the use of the farm for the year 1877, exceeded the amount of the indebtedness paid by him for the plaintiffs, and the support furnished by him to the plaintiffs, and all money or other things paid to or for the plaintiffs, or either of them.” The plaintiffs are entitled to an accounting to ascertain such excess, and to a judgment therefor when ascertained. But inasmuch as their son is represented insolvent, probably they will not desire to avail themselves of such right.

By the Court. — The judgment of the circuit court is reversed, and the cause will be remanded for further proceedings .in accordance with this opinion.