Johnson v. Bank of New Richmond , 188 Wis. 620 ( 1926 )

Owen, J.

Appellant’s principal contention is that the mortgage which is the subject of the action was paid and discharged. This contention is based upon the fact that at the time Peter Ryan executed the mortgage for $6,500 to the plaintiff, N. C. Pike had in his possession a satisfaction of the $2,500 mortgage. This satisfaction, however, had never,been delivered to either Peter Ryan or Thomas Ryan. Pike was the agent of the Amoskeag Savings Bank and his possession of the satisfaction was that of the Amoskeag Savings Bank. The fact that the satisfaction had been forwarded to- Pike no more constituted a release of the mortgage than if, after its execution, the president of the bank had thrown it into a drawer of his desk. There is no doubt that it was the understanding that the $6,500 loaned by Johnson to Ryan was to be used in the discharge of the $6,500 mortgages, and that the satisfaction would have been placed on record had the continuation of the abstract disclosed a clear title. The proceeds of the loan remained in the hands of Pike as the agent of Johnson until after the return of the abstract. Upon the return of the abstract disclosing the $20,000 mortgage to the Bank ,of New Richmond, Johnson was under no obligation to pay the money over to any one. Until the money was actually paid to the Amoskeag Savings Bank, Ryan was in no position to claim a discharge or satisfaction. Under these circumstances, Johnson, acting through Pike as his agent, elected to take an assignment of the $2,500 mortgage from the Amoskeag Savings Bank and hold it as collateral security. This was after Ryan had been advised that the proceeds of the loan could not be used for. the discharge of the mortgage but that they could be used so as to operate as an extension of the loan. To this proposition Ryan made no reply, which circumstance constituted an acquiescence thereto. Ryan is not complaining of the disposition made of the proceeds of the loan. He malees no defense against these proceedings. Certainly the Bank of Nezv Richmond is in no position to claim that the $2,500 mortgage was satisfied. Its contention in this respect was properly repudiated by the lower court.

It further appears that between March 26, 1921, and the commencement of this action, Peter E. Ryan paid N. C. Pike the sum of $433 to apply on interest. The record is not clear as to where this interest was applied, but it does appear that no part thereof was applied on this $2,500 note and mortgage. Appellant claims that some of it at least should have been so applied. Ryan had a right to indicate on what indebtedness the payments thus made should be applied. He is making no complaint concerning such application. It will be remembered that Pike held three other mortgages against Ryan, the interest on which he was under obligations to pay. We cannot see that the Bank of New Richmond is in any position to insist that the interest should be applied upon this $2,500 note and mortgage.

It also appears that the Bank of New Richmond paid the taxes upon said premises for the year. 1923, amounting to «$125.50. It contends that sec. 74.67, Stats., gives it a lien for this amount prior to the lien of the $2,500 mortgage. Sec. 74.67, Stats., provides:

“Whenever any person having any lien upon any real estate, obtained pursuant to law, shall have paid any taxes on such real estate or shall have redeemed such real estate, when the same shall have been sold for taxes, he shall have a further lien upon such real estate as against the person under whose title he claims such first lien and all other persons then claiming under him for the amount of money so paid, with interest at the rate of ten per cent, per annum, and against all other persons claiming title to such real estate under such person accruing subsequently to the time of recording the notice hereinafter specified.”

This section of the statutes has been construed to give a second mortgagee who has redeemed the land from tax sales merely an addition to his mortgage lien. Fischel v. Thompson, 126 Wis. 73, 105 N. W. 229. This construction finds clear legislative expression in sec. 74.695, Stats., enacted by the legislature of 1925.

By the Court. — Judgment affirmed.