Roach v. Sanborn Land Co.

135 Wis. 354 | Wis. | 1908

Bashrord, J.

The first question raised on appellant’s brief relates to the invalidity of the tax deeds, and numerous defects are pointed out which seem fatal to these instruments as conveyances of the land. The court has found that none of them had been of record for three years prior to the commencement of the action, hence they are open to attack. Respondent’s counsel does not seek to support the validity of the tax deeds, hence we may assume that this defense is .abandoned.

The controlling question in this case is whether or not the appellant held a valid lien on the premises described in the complaint. Sec. 3186, Stats. (1898), authorizes any person not having title or possession, but being the owner and holder of any lien or incumbrance on land, to prosecute an action to test the validity of any adverse claim to such land. Coe v. Rockman, 126 Wis. 515, 106 N. W. 290. The appellant’s right to a lien must be derived from the transfers to him by O. S. Young on November 3, 1902, of the notes and trust deeds, so far as the latter were the subject of assignment. The statute of limitations had then run upon the notes and they were transferred without indorsement. These notes were executed August 1, 1893, payable to the order of the maker, and could have no validity until after negotiation. They were indorsed in blank by the maker, and hence became payable to bearer and subject to transfer by delivery. There is no direct proof to show when the indorsements were made and the notes negotiated. The court found that the T. W. Harvey Lumber Company, the maker, wás the holder of the notes payable to its own order on April 2, 1895, when it executed the quitclaim deed to Mrs. Harvey conveying to her the land described in the trust deeds. Our attention has been called to no proof to- support this finding and we have been unable to discover any in the record. Respondent’s counsel contends that it was necessary for the appellant to prove that these notes had in fact been negotiated prior to the execution of the quitclaim deed to Mrs. Harvey through which it had derived title to the land. This position is not tenable. On the contrary, the court holds that the plaintiff may rest upon the presumption arising from the negotiation of the paper, and that the burden was upon the defendant to prove that the notes were held by the maker at the time the quitclaim deed was executed.

“The general rule is that an indorsement, in the absence of any evidence to the contrary, is always presumed to have-been made at or about the date of the note.” Mason v. Noonan, 7 Wis. 609, 618.

The notes and trust deeds were executed August 1, 1893, the latter recorded October 7, 1893, and the quitclaim deed was» executed April 2, 1895. As the notes were payable to the order of the maker and could have no validity while they were in its possession, it is reasonable to presume that they were negotiated and in the hands of an innocent holder prior to the. execution of the quitclaim deed. Upon the record here presented, we must conclude that the notes had been negotiated prior to the conveyance to Mrs. Harvey through which the respondent asserts its claim.

It is urged with much force on behalf of the respondent that the statute of limitations had run upon the notes before the transfer to the appellant, and consequently they were as effectually extinguished as if they had been satisfied by actual payment. That rule has been frequently applied where the action was brought to enforce the right and the bar of the statute was properly pleaded. Eingartner v. Ill. S. Co. 103 Wis. 313, 19 N. W. 433. It is as firmly settled as the law of this state that the statute of limitations extinguishes the right only at the option of the obligor and that an action may be brought and a recovery had thereon unless the bar is specially pleaded. Whereatt v. Worth, 108 Wis. 291, 84 N. W. 441. The rule is also established that if the indebtedness is secured by mortgage the remedy to enforce the lien may be prosecuted after the debt is barred, although the defense is pleaded. Hughes v. Thomas, 131 Wis. 315, 111 N. W. 414. But in such case there can be no deficiency judgment for any balance remaining due upon the indebtedness. Pereles v. Leiser, 119 Wis. 341, 96 N. W. 799. The difficulty here arises from the application of these somewhat conflicting rules to the facts as presented on this record. The appellant became the holder of the notes after the statute had run and after they had become subject to this defense in an action upon them against the maker. They were nevertheless outstanding obligations, presumptively in the hands of an innocent holder, subject to transfer by delivery, which might be enforced against the maker unless the statute was specially pleaded as a defense. Tbe trust deeds were given as security for the payment of tbe notes, and, like a mortgage, were an accessory to these instruments. McCourt v. Peppard, 126 Wis. 326, 105 N. W. 809. Tbe transfer of tbe notes carried with them tbe security without formal assignment. Potter v. Stransky, 48 Wis. 235, 4 N. W. 95. Moreover, at tbe time tbe appellant purchased tbe notes be received from Young what evidently was intended as an actual transfer of tbe security. Tbe deeds executed to tbe trustee were not subject to formal assignment by tbe bolder of tbe notes thereby secured. C. S. Young, having become the bolder of tbe notes prior to their maturity, was tbe beneficial owner of tbe rights secured by tbe trust deeds, and be could have maintained this suit to test tbe validity of any adverse claims asserted against tbe lands therein described. Tbe court bolds that tbe appellant, by tbe transfers above mentioned, succeeded to tbe rights of C. S. Young and acquired tbe lien created by tbe trust deeds, and consequently is authorized to maintain this suit to set aside tbe adverse claims to the land. Tbe assignment of a demand entitles tbe assignee to every assignable remedy, lien, or security available by tbe assignor as a means of indemnity or payment, unless expressly excepted in tbe transfer. Schlieman v. Bowlin, 36 Minn. 198, 30 N. W. 879.

It is further urged on behalf of tbe respondent that tbe action should be dismissed as against tbe Sanborn Land Company upon tbe ground that- it bad conveyed tbe land in question to a third party before tbe commencement of tbe suit, and that this deed was recorded before tbe filing of tbe Us pendens. Tbe finding of tbe court was to tbe contrary, and, as there appears to be no exception thereto-, it must be accepted as a verity.

It was urged in tbe trial court that tbe action should be dismissed because tbe trustee, although named as a party defendant, bad not been seiwed with summons and complaint Tbe complaint alleges and tbe proof shows that tbe trustee, when requested by tbe appellant, bad refused to- bring the suit, and consequently it was not necessary to make him a party. Appellant was tbe real and sole party in interest, and, as be bad acquired the- lien created by tbe trust deeds, might maintain the action in bis own name. Sec. 2605, Stats. (1898).

It seems from tbe record that tbe respondent derived title to the land through mesne conveyances from Mrs. Harvey after it bad acquired tbe tax titles, and hence was under no obligation to pay tbe taxes either when they were levied or when it acquired the tax titles. Under sec. 12107i tbe amounts for which tbe land was sold, as well as tbe amounts •of 'subsequent taxes paid by tbe tax-title claimant, should be ascertained and an order made requiring such sums to be paid into court, with interest at fifteen per cent., within a' time to be fixed by tbe court, and, in default of such payment, judgment to be rendered for tbe fiefendant; but, in case of such payment, judgment to be rendered for tbe plaintiff canceling tbe tax deeds.

By the Court. — Judgment reversed, and tbe cause remanded for further proceedings and for judgment in accordance with this opinion.