Baass vs. The Chicago & Northwestern Railway Company. Loan & Trust Company, to secure its bonds for $3,900,000, which instrument was duly recorded during the same month; and that the defendant has been in the constant posssession of said mortgaged premises ever since the spring of 1871. On motion of the defendant, the court made an order requiring that the said Trust Company be made a defendant in the action. The plaintiff moved the court to vacate such order, and at the same time tendered a stipulation as follows: "Whereas it is claimed on the part of the defendant that the Farmers' Loan & Trust Company, and the Union Trust Company, corporations of the state of New York, hold mortgages covering the mortgaged premises described in the complaint in this action, which mortgages were recorded in the office of the secretary of state of Wisconsin prior to the time the plaintiff's mortgage was recorded in the office of the register of deeds for Dane county, Wisconsin, and that in consequence thereof the said corporations are necessary parties to this action: Now, therefore, in order to avoid the necessity of making them parties, it is, for the purposes of this case, providing such order be vacated, hereby stipulated that the plaintiff in this action waives all claim of priority over the said mortgages or deeds of trust given to the corporations aforesaid, and admits that the same are incumbrances on the premises described in said mortgage set out in the plaintiff's complaint in this action, superior and paramount to said mortgage. The motion was denied, and the plaintiff appealed. B. J. Stevens, for appellant: In this country, where, on foreclosure of a mortgage, a sale of the mortgaged premises is decreed, the practice as to parties defendant is different from that in England, where payment is obtained by the mortgagee taking possession and reimbursing himself from the rents and profits. Here the general rule is, that the only proper parties to the foreclosure suit are the mortgagor and mortgagee and those who have ac Baass vs. The Chicago & Northwestern Railway Company. quired rights or interests under them subsequent to the mortgage. Eagle Fire Ins. Co. v. Lent, 6 Paige, 635; Western Ins. Co. v. Eagle Fire Ins. Co., 1 id., 284; Holcomb v. Holcomb, 2 Barb. (S. C.), 23; Lewis v. Smith, 11 id., 158. Prior incumbrancers are not necessary parties. Farwell v. Murphy, 2 Wis., 533, 541; Strobe v. Downer, 13 id., 11; Walker v. Jarvis, 16 id., 28; Mims v. Mims, 1 Humph., 425; Rose v. Page, 2 Sim., 471. It has always been, so far as we know, the invariable practice in this state to foreclose and sell mortgaged premises subject to the rights of prior incumbrancers. The only possible object in making them parties would be to sell the premises free from all incumbrances, satisfying them from the proceeds of the sale in the order of their priority. This cannot be done where, as in this case, the prior mortgages are not due. Smith & Lamb, for the respondent, argued, among other things, that the proposed stipulation would be utterly immaterial unless the Trust Company were made a party to the suit, so that it and its assigns, as well as defendant, could have the benefit of the judgment stipulated for, as an estoppel against plaintiff and his representatives hereafter; that it is doubtful whether the judgment as to that point would be conclusive even between the parties, very respectable authorities holding a judgment to be an estoppel only as to matters litigated by parties actually contesting the question before the court (Wadham v. Gay (Ill. Sup. Ct.), 14 Am. Law Reg., 419, 427; Jenkins v. Robertson, L. R., 1 Scotch App. Cas., 117); that if the Trust Company were not made a defendant, the respondent might not be in a position to insist on all the rights of that company, even where the protection of those rights might be incidentally very advantageous to the respondent; that if, for example, the question whether respondent bought the land in good faith, without knowledge of plaintiff's mortgage, should be adjudged adversely to it, the court might refuse to hear the respondent as to the rights of its Baass vs. The Chicago & Northwestern Railway Company. subsequent grantee in trust; that it is the respondent's absolute right under the statute (Tay. Stats., 1421, § 23) to have all persons interested in the subject matter of the controversy brought in as parties; and that such is also the general rule of equity (Armstrong v. Pratt, 2 Wis., 299), and priority between mortgages is peculiarly a proper question to be litigated in a suit to foreclose one of them. Sup'rs v. R. R. Co., 24 Wis., 122. LYON, J. The record does not give the name of the mortgagor, or inform us of the title claimed by the defendant; but we gather from the argument that the mortgagor conveyed the mortgaged premises to the defendant by a deed junior in execution, but senior in record, to the mortgage in suit. On the record before us it is uncertain whether the trust deed is prior or subsequent in right to the mortgage. If prior in right, it seems to be conceded that the Trust Company is not a necessary or proper party to the action; but otherwise if the same is subsequent in right. Were the stipulation conclusive on that questión - did it render the trust deed prior in right to the mortgage in all proceedings, and in favor of or against all persons who have now, or may hereafter have, an interest in the mortgaged premises, it would seem entirely unnecessary to make the Trust Company a party to the action. But such is not the effect of the stipulation. It may be that the trust deed is subject to the mortgage; and if so, notwithstanding the stipulation, no good reason is perceived why any person interested, other than the plaintiff, may not be heard to assert the fact. Indeed, it is not certain that the plaintiff himself may not assert it in any other action or proceeding; for the stipulation is tendered only "for the purposes of this case." It seems to us that the defendant has the right to have the question determined in this action, whether the trust deed or the mortgage in suit has priority; and because the offered Jones and another, Adm'rs, vs. Williams. stipulation does not determine that question, and because it cannot be conclusively determined without the presence of the Trust Company, we think the circuit court properly refused to vacate the order making that company a party defendant in the action. By the Court.-Order affirmed. JONES and another, Adm'rs, VS. WILLIAMS. Appropriation of payments; when doctrine inapplicable. 1. In the case of a creditor having several demands against the debtor, it is only where the latter makes a payment with opportunity to exercise his right to appropriate the same, and neglects to do so, that the creditor acquires the right of appropriation. 2. Plaintiffs' decedent held a note of defendant, and also had charge of his mill, as an employee, and from time to time drew out money and charged it to himself in the day book kept at the mill. Held, that the amounts so taken and charged constituted cross demands or setoffs in defendant's favor, on an accounting between the parties, and were not payments of which defendant could make an appropriation, or to which the principles of the application of payments apply. 3. In an action for the value of such decedent's services in the mill, therefore, it was error to instruct the jury that the moneys so taken might be applied as payments to the note, if the jury should find that defendant had not elected to apply them in payment of the services. APPEAL from the Circuit Court for Columbia County. This action was brought to recover the amount of a note for $1,560 at one year from date, with interest at ten per cent., executed February 1, 1867, by the defendant to Owen Griffiths, the plaintiffs' intestate; and also to recover for labor and services alleged to have been performed by said Griffiths as a miller, for the defendant, at his request, at his grist and flouring mills in Danville, Dodge county, and Cambria, Columbia county, from February 1, 1867, to June 25, 1872, of the value Jones and another, Adm'rs, vs. Williams. of $3,078, with interest. The defendant answered the statute of limitations as to the note, and also denied all the facts alleged as the second cause of action, and averred in substance, that Griffiths was employed between February 1 and October 1, 1867, in the mill at Danville, owned by the defendant and another person, and had been paid in full for the services then rendered; and that from October 1, 1867, until the death of said Griffiths in July, 1872, he was partner with plaintiff in the Cambria mill, owning a one-third interest; that the purchase price of the mill was $10,500; that as Griffiths had not sufficient means to pay for his one-third of it, defendant, by their mutual agreement, took the deed of the mill in his own name, and held the title as security for the money advanced by him in the purchase thereof; that Griffiths agreed to allow "a claim of about $1,600 which he then held against defendant, to be used in the purchase of said mill;" that defendant and Griffiths afterwards expended, in improving the mill, about $18,000, a considerable portion of which was paid out of the earnings of said mill, and the remainder was advanced by the defendant; that while defendant and Griffiths were thus carrying on the business, the latter was in charge of the machinery and the running of the mill, while Griffiths had charge of the books and business of the firm; that the latter drew out from the business and charged to himself, upon the books of the firm, a large sum of money, which, with the money paid out for his funeral expenses, amounted to $1,464.40, as appears from said books; and that since Griffiths' death the defendant had paid to his widow for her support out of the earnings of said mill, $439.34. The answer further alleges that Griffiths, at the time of his death, was largely indebted to defendant for money advanced for the purchase and improvement of said mill property; and the defendant is, and at all times since the death of Griffiths has been, ready to settle with his representatives the business of said partnership. |