207 Wis. 1 | Wis. | 1932
The following opinion was filed November 10, 1931:
So far as material, the evidence establishes the following undisputed facts: On March 25, 1927, building
On the trial there was an irreconcilable conflict in the evidence in the following respect: Walter Buhler testified in substance that when Harold Paul obtained the check for $1,077.35, Harold Paul said that he was there to pay off the outstanding bills on the property,'and that all accounts would be paid in full, and that the check was to be used for paying the outstanding bills on the property. Walter Buhler also testified that he did not see the contract made on November 2, 1927, between Marie Larsen and William F. Rediske. On the other hand,' plaintiffs’ witn'ess, Hárold Paul, contradicted Buhler’s. testimony that Paul had said that the money was to be used for paying the outstanding bills on the property; and Paul’s testimony was corroborated to some extent by the testimony of Sophus Jeppesen and Walter G. Lange, witnesses called by the plaintiffs and examined by Harold Paul, acting as one of the attorneys for plaintiffs. On the undisputed proposition of whether 'the $1,077.35 were to be used by William F. Rediske in payment of the lien claims, the trial court found that there was no agreement between the plaintiffs, or any* of them, find Marie Larsen or Mary Buhler, to apply áñy part thereof on anything other than the expenses and coriimission of William F. Rediske. In view of that finding' the trial court concluded that $1,000 of the $1,077.35 should be applied’ to pay to William F. Rediske such commission and'expenses ; that the balance of $77.35 should be applied on the lien claims' of plaintiffs; and that Mary Buhler’s mortgage is subject to the priority, of those liens of plaintiffs, excepting that Mary Buhler is entitled to subrogation to the extent' of the $529 of her money which' was used to discharge the mortgage which- was a lien on the premises at -the time of the commencement of the construction work. ■ A judgmént of foreclosure was entered in accordance with those conclusions. On this appeal it is contended on behalf of Mary
On behalf of Mary Buhler it is also contended that as the original written agreement between Marie Larsen and Mary Buhler’s agent, pursuant to which the loan was made, provided that the building was to be completed and paid for with the money then being loaned, Marie Larsen could not contract with any other person to dispose of any part of the $6,000 for any other purpose; and hence that the $1,077.35 could not be used excepting to pay the claims for the liens for construction work without the consent of the mortgagee. Her counsel argues that the agreement between Mary Buhler’s agent and Marie Larsen that the loan was on condition that the house would be completed and paid for on the money loaned, was for the benefit of third par
It is further contended that Mary Buhler, as mortgagee, and the lien claimants were all engaged in a common enter-, prise; that, by reason of the partial payments on account, which the lien claimants had, at the direction of Marie Larsen, received from Mary Buhler’s agent, who used part of the $6,000 loan for that purpose, the lien claimants had notice that their claims were to be paid out of a loan for construction purposes procured by Marie Larsen from the mortgagee; and that, therefore, in equity the mortgagee and the lien claimants should participate pro rata in the proceeds of the property on a foreclosure sale. Although such a distribution might be more equitable as far as the mortgagee
“Such lien shall be prior to any other lien which originates subsequent to the commencement of the construction, repairs, removal or work aforesaid of or upon such dwelling house; . . . shall also be prior to any unrecorded mortgage given before the commencement of such construction, repairs, removal or work, of which mortgage the person claiming the lien has no notice.”
That statute was considered and applied in Wisconsin P. M. Co. v. Schuda, 72 Wis. 277, 283, 39 N. W. 558; Evans-Lee Co. v. Hoton, 190 Wis. 207, 208 N. W. 872; Prince v. C. G. Bretting Mfg. Co. 203 Wis. 504, 234 N. W. 699. Under that statute and those decisions the liens of the plaintiffs for services and materials dated from commencement of the first work on March 25, 1927, and by the very words of the statute those liens are prior to any other lien which originates subsequent to the commencement of construction. As Mary Buhler’s mortgage did not originate until it was executed on June 8, 1927, it was by virtue of that statute subordinate to those liens, regardless of the purpose for which the proceeds of the mortgage were to be used.
In the case of Wisconsin P. M. Co. v. Schuda, supra, the proceeds of a mortgage loan were also to be used for the purpose of paying for the construction of a building. Nevertheless it was held that if the work of construction was commenced prior to the execution of the mortgage,' the liens for such work and materials were prior to the mortgage.
The conclusion reached in Ward v. Yarnelle, 173 Ind. 535, 91 N. E. 7, is contrary to the established legislative policy of this state as evidenced by the provisions of sec. 289.01 and other provisions in ch. 289, Stats., and as recognized by the decisions of this court.
By the Court. — Judgment affirmed.
A motion for a rehearing was denied, with $25 costs, on February 9, 1932.