Spencer v. Fredendall

15 Wis. 666 | Wis. | 1862

By the Oowrt,

PAINE, J.

Tbe only question presented by tbe exceptions in this case is, whether the conclusions of law were right, upon the facts as found by the court below.

These facts were briefly these. The homestead and certain mill property of the plaintiff were bid off by the defendants at a foreclosure sale, upon an agreement that they were to take the title and hold the property by way of mortgage for the money advanced, which was advanced as a loan to the plaintiff. The relation of mortgagor and mortgagee was shown by parol evidence as to the real nature of the transaction, and was in fact not denied. See Sweet vs. Mitchell et al., ante, p. 641. While the property was so held, the parties made a new agreement, by which the mortgagees were to take the mill in payment of the loan and re-convey the homestead to the plaintiff. In pursuance of this agreement, they sold the mill, with the plaintiff’s consent, to other parties. Afterwards the plaintiff agreed with them verbally, that they might still continue to hold the title to the homestead as security for another debt he owed them, which was previously unsecured.

The question of law is, whether it was competent in this manner to create a new lien upon the homestead for such additional debt, which should be enforced in equity ? The court below held it was not, upon two grounds: first, that after the mortgage is once paid, it cannot, by a mere verbal agreement of the parties, be transferred to a new debt, which it was not originally given to secure; and second, that even if this could generally be done, it could not be done with a mortgage upon the homestead, without the wife’s consent, for the reason that it would violate that provision of law which makes void any conveyance of the homestead by the husband without the signature of the wife.

Without passing upon the first reason assigned, a majority of the court are of the opinion that the ruling was correct for the second reason. It seems scarcely to admit of question, that after a mortgage upon the homestead given in tbe ordinary form and signed by tbe wife, bad been paid, 'it would be incompetent for tbe busband alone, by a yerbal. agreement or otherwise, to revive tbe mortgage and attach its security to other debts. To bold otherwise, would defeat tbe clear intent of tbe statute. Eor whenever tbe signature of tbe wife could be once obtained to a mortgage upon tbe homestead, the prohibition would be substantially destroyed, as tbe husband could keep that mortgage in existence as a security for new debts to an indefinite amount. It seems clear that this cannot be done.

But should the facts that in this case tbe mortgage was created by an absolute deed taken on a foreclosure sale, and that tbe defeasance has to be shown by parol, lead to any different conclusion? I am unable to see that it should. It being once established that a mortgage may be thus created, when it is thus created it would seem to be as fully within tbe policy of the law preventing tbe busband from extending a mortgage on the homestead to different debts from those originally secured by it, without the assent of the wife, as is a mortgage in tbe ordinary form. The mere mode by which the mortgage is created, cannot be material in tbe determination of this question.

It is true, tbe language of the statute is, that “the mortgage or other alienation” of the homestead shall not be valid without tbe signature of the wife. It is also true that in a case like the one under discussion, there is, strictly speaking, no new mortgage executed, nor other alienation. But there is no difference in this respect between an ordinary mortgage and one like the present. If the husband can extend either to a new debt, there is no new mortgage executed, or other alienation, in either case; and if the court should, upon tbe literal construction, take either out of tbe prohibition, it must, to be consistent, take both out. I think there is much force in the reasoning of the court below, to tbe effect that a mortgage once paid is extinguished, and cannot in any case be transferred to another debt. But even if it can ordinarily be done, it is in substance and effect making a new mortgage, and should be so regarded within the meaning of the prohibition against mortgaging the homestead without the signature o£ tbe wife; and tbe mode by wbieb tbe mortgage was created should make no distinction in this respect.

The statute is a disabling one, and should not be extended by construction to cases not clearly within its intention. But cases which are clearly within its meaning should not be excluded upon the technical idea that the extension of a paid mortgage to a new debt is not strictly a mortgage of the homestead, though it is so to all intents and purposes within the design of this law. A court of equity might ordinarily seize upon an agreement like the one made here, and say that as it was just that the party should pay the debt, it would not aid him to get back his title, till he should pay it. But I think it has no right to say so where such an agreement relates to the homestead. It is just that men should pay their debts. The general policy of the law compels them to do so. But to this there is an exception growing out of another and special policy which is deemed of paramount importance, which is, to secure a homestead to the family. However sacred the obligation to pay debts, the law expressly designed to secure the homestead from being taken for that purpose without the consent not only of the debtor but of his wife. Whenever, therefore, the homestead is in such condition that the owner requires equitable aid to clear up his title, I do not think the court would be justified in imposing upon him as a condition, the payment of any debt not a lien upon it, no matter how just it otherwise might be. To do so would be to defeat the statute.

The judgment is affirmed, with costs.