11 N.W.2d 503 | Wis. | 1943
The note sued upon is for $5,000, and was executed in 1929 by Conrad Schmitt Studios, a corporation, to Amanda L. Wenzel, as part payment of land conveyed by her by warranty *162 deed to the corporation signed by the defendants other than the payee as accommodation indorsers. A mortgage on the land was also given by the corporation as security for payment of the note. The purchase price of the land was $10,000, and one half thereof was paid in cash at the time the deed was executed. Mrs. Wenzel, for value received, indorsed the note to the Badger State Bank before due. The note not having been paid when due, the bank on July 25, 1932, commenced action on it against the maker and all indorsers. The defendant corporation put in answer and counterclaim which upon motion the court struck as frivolous and as stating no defense, and ordered judgment entered against the defendants for the amount due on the note. Judgment was not entered but the parties all signed a stipulation which provided for immediate payment of $2,000 by the corporation to the bank, receipt whereof was acknowledged; provided for partial payments in the future at designated times and in designated amounts which all of the defendants "in consideration of said forbearance" promised to pay or cause to be paid; and provided that the bank forbore to enter judgment presently. The stipulation was expressly conditioned upon the prompt making of the instalment payments; and the defendants expressly agreed that "on failure of the plaintiff [bank], its successors and assigns to receive the said instalments on the due date thereof" the bank, its successors and assigns should forthwith be entitled, and was granted the right to enter judgment in the action for any balance due "under the obligation" set forth in the complaint, with accrued interest; and the bank agreed upon payment of the entire principal sum and interest to dismiss the action without costs and to surrender the securities it held as collateral to the note. The stipulation also provided that "as further security for the above obligation," viz., the note, Conrad Schmitt and Mary, his wife, would convey to the bank by quitclaim deed certain described lands. *163
Default having been made in the payments of the instalments the bank for value, on March 7, 1940, eight years after the commencement of the action, assigned the note and mortgage to defendant Amanda L. Wenzel, and she on April 16, 1941, assigned them to Edwin H. Wenzel. On May 28, 1941, on the application of Edwin H. Wenzel, the court by order substituted him as plaintiff in the action. On September 12, 1941, a default judgment was entered in favor of the substituted plaintiff against the maker and accommodation indorsers of the note for $4,173.17, principal, interest, and costs.
On September 17, 1941, a copy of the judgment and findings were sent to the defendant corporation, and it was notified by letter that the substituted plaintiff intended to enforce payment of the judgment. Thereupon such proceedings were taken that on May 12, 1942, the judgment was vacated and the defendant corporation and the accommodation indorsers of the note were permitted to file a pleading denominated an "Answer to Amended Complaint as Supplemented by Edwin H. Wenzel Allegations," which set out the stipulation above referred to and detailed at length the claimed facts on which they claimed a breach of warranty by Mrs. Wenzel and prayed judgment of dismissal of the complaint. The breach of warranty was alleged to have resulted from acquisition of title by adverse possession of persons in possession of the land for more than twenty years prior to the execution of the deed by Amanda L. Wenzel. The land abutted upon a street which had never been opened or used shown on a recorded plat as running down to the Milwaukee river, and at the time of the conveyance a shack stood on this street a corner of which projected six feet beyond the lot line into the premises conveyed. The city in performing street work tore this shack down in 1941. The case was tried to the court without a jury. The trial judge filed findings of fact reciting that at the time *164 the deed was delivered no person other than Mrs. Wenzel had any claim to the land affecting her title, and that since the delivery of the deed no person had disturbed or made any claim against the defendant corporation's quiet and peaceable possession of the land. The court also found the amount due upon the note and directed judgment for the amount found in favor of the substituted plaintiff and against the corporation and the accommodation indorsers except the deceased Conrad Schmitt. Judgment was entered upon the findings for $3,565.97, including principal, interest, and costs. As appears more particularly from the foregoing statement of facts, suit was brought on a promissory note given to the grantor of land as part payment of the purchase price. The grantor indorsed the note to a bank for value before due. The bank sued the grantor and the maker and the accommodation indorsers to recover on the note. After judgment was ordered for recovery of the amount of the note, but before it was entered, a stipulation was signed by all the parties providing for a present payment and for payment of the balance in the future in instalments at specified times and for specified amounts which instalments the defendants agreed "to pay or cause to be paid," and for entry of judgment on failure to pay the instalments when due. Default having been made in these payments the bank assigned the note back to the grantor, and she assigned it to her husband, who was by order of court substituted as plaintiff in the suit, and he was awarded judgment against the maker and accommodation indorsers for the amount due on the note. *165
The appellants make two contentions: (1) The promissory note was merged in the settlement contract. (2) The possession of part of the lot by strangers to the title was a breach of the grantor's covenant of warranty, and the grantee may offset its damages resulting from the breach against the balance due on the note.
(1) (a) It is more particularly contended under head (1) that the substituted plaintiff showed title to the note and mortgage but not to any right of the Badger State Bank. But the stipulation by its own terms meets this contention fully. It expressly provides that on failure of the bank, "its successors and assigns to receive the said instalments on the due date thereof . . . [the bank] its successors and assigns" should have "the right to enter judgment in the above-entitled action for any balance due under the obligation set forth in the complaint." That obligation is the note itself. The substituted plaintiff is a "successor and assign" of the bank and obviously has the same right to enter judgment on the note that the bank would have had had it kept the note, and it was expressly agreed that "the successor and assign" of the bank might enter judgment as it was entered in the action that the bank commenced.
(b) The rest of appellants' argument on merger is based on the proposition stated in Restatement, 2 Contracts, p. 833, sec. 446:
"A contractual duty or a duty to make compensation is merged in the duty created by the subsequent formation of a sealed contract between the same parties providing for the same performance."
We are unable to perceive how it can be reasonably contended that a contract is "merged in a subsequent contract," when the subsequent contract, as in the instant case, expressly provides that on its breach judgment may be entered in a pending suit based on the original contract. There is also *166
in the brief of appellants a statement that the Wisconsin Annotations to sec. 446 state that "The Wisconsin cases are in accord with the Restatement." Two Wisconsin cases are cited as so in accord in, the Annotations. One of them isMatteson v. Matteson (1882),
(c) Appellants also contend that the taking of additional security by the bank, when the time for payment was extended by the stipulation, merged the note in the stipulation. The whole argument of appellants on the question of merger seems to be fully met by the decision in Wisconsin Trust Co.v. Cousins,
"It is the long and well-settled doctrine in this state that a renewal by the giving of a new note or the extension of time in which to pay a pre-existing debt is not a discharge of the old and original obligation and the creation of a new obligation, but a mere carrying on of the prior obligation, unless and except it appears that the parties agreed that it should be a destruction of the old and the creation of a new obligation. The following among other authorities so declare: [Citing cases.]
"The giving of additional security at the time of renewal or extension of time of payment of the pre-existing debt, either by the giving of a note of a third person or in some other form, does not alter the right of the creditor to continue to reap all the benefits to him that may surround the pre-existing obligation and does not relieve the debtor from his original obligation. [Citing cases.]" *167
(d) Appellants' counsel make in their brief some bald statements as to the want of title to the note and right of action in the substituted plaintiff in support of which they offer no reason and we are unable to perceive any. They also state that the substituted plaintiff is not asking foreclosure of the mortgage or enforcing the collateral security afforded by the quitclaim deed, but suggest no reason why he must, and we perceive none. They also say that payment to the substituted plaintiff will not secure reconveyance of the premises conveyed by quitclaim deed as security, but if payment be made and refusal to convey or delivery back of the deed is refused either one or both can be compelled by appropriate action.
(2) The claim of breach of warranty is based entirely on the mere facts of occupancy by strangers to the record title of a small shack that stood on a portion of the plat in which the premises involved are located shown as a public street, one corner of which projects six feet beyond the street line into the premises and that this shack had so stood and been occupied for more than twenty years. The shack had so stood and been occupied but the evidence as to its continuous occupation is rather indefinite and uncertain.
The claim of offset results from the contention that Mrs. Wenzel breached the covenant of warranty of title contained in her deed to the corporation. The supplemental answer prays judgment dismissing the complaint on the theory that the damages for breach of warranty claimed to be interest on the purchase-price payments until removal of the shack more than offset the amount due on the note, wherefore nothing was recoverable from the corporation and therefore nothing was recoverable from the accommodation indorsers.
The only thing in evidence as to any occupant is of mere possession, and "mere possession is not a sufficient basis for claim of title by adverse possession." Bettack v. Conachen,
"All reasonable presumptions are made in favor of the true owner in case of a claim by adverse possession, including the *168
presumption that actual possession is subordinate to the right of the true owner. Illinois Steel Co. v. Budzisz (1900),
Mrs. Wenzel was the true owner at all times here involved prior to her deed to the Studio corporation. There is no evidence that any occupant of the shack claimed ownership of the premises, or made any claim of adverse possession to her or did any act to apprise her that his possession of the corner of the shack was adverse.
Appellants also seem to contend that the six-foot projection at least constituted a breach of the covenant of seizin in the deed, citing Lakelands, Inc., v. Chippewa Flambeau Imp.Co.
By the Court. — The judgment of the circuit court is affirmed. *169
