Keller, Appellant, vs. Fenske, Respondent.
October 19, 1904
January 10, 1905.
.Life estates: Relations of life tenant and remainderman: Record of conveyances: Constructive notice: PwMiase of outstanding title by life tenant: Accounting.
-1. The owner of lands, subject to a mortgage, conveyed the same to plaintiff, reserving to his wife a life estate, the life tenant being in possession. This mortgage was foreclosed, both the life tenant and plaintiff being made parties to the action. At the foreclosure sale the property brought just enough to satisfy the foreclosure judgment with interest and costs of sale. The purchaser, having received the sheriff’s deed, conveyed the premises to the life tenant in consideration of the sum paid by him upon the sheriff’s sale. The life tenant thereafter, by warranty deed, conveyed the premises to defendant, who, after her death, took possession. All the conveyances were duly recorded at about the time they were respectively executed. Held, that defendant took title from the original life tenant with knowledge of its burdens and restrictions, as between the tenant for life and the tenant in remainder.
Ü. In such case, the life tenant having been in possession, collecting and using the rents and income from the date of the deed creating her estate until her death, the purchase by the life tenant under the foreclosure sale is held to have been made for the joint benefit of herself and the tenant in remainder, precluding the life tenant from holding it for her exclusive benefit, if the tenant in remainder will contribute her proper share of the sum so paid.
'3. In such ease, whatever the life tenant pays above her proportionate share is secured to her as a creditor, and she becomes subrogated to that extent to the rights of the lien holder in the real estate so purchased.
•4. In such case, the life tenant, who paid off the mortgage, and who conveyed to defendant by warranty deed, is held to have conveyed not only her life estate, but also the lien on the land which she acquired by reason of her payment of the mortgage.
.5. In such case, on an accounting between the tenant in remainder and the grantee of the life tenant, such grantee having acted in good faith, he should be charged with the income of the *436estate from the termination, of the life estate, less the amounts, paid by him for taxes on the premises. The grantee should also recover for such sums as he has paid for improvements and to preserve the property since taking possession, and also, the amount of the mortgage lien, less the interest paid thereon.
Appeal from a judgment of the circuit court for Milwaukee county: Oreest T. Williams, Circuit Judg’e.
Reversed.
An action in equity wherein plaintiff seeks to redeem from defendant’s interest in certain real estate. Sbe asks for an accounting, and tbe right to discharge the defendant’s lien by payment of such sums as may be found due from her, and to be adjudged the owner of the premises. Defendant admitted most of the facts as alleged in the complaint, but averred that he was the owner in fee of the premises, free from any claim,, right, or interest, and denied that plaintiff had any right to. or interest in the premises to entitle her to the relief demanded.
The material facts of the case, covered by the pleadings and findings of the court, are clearly and concisely set forth in the statement of appellant’s brief, which we will adopt, and is as. follows:
“Prior to March 15, 1894, one Caroline Laabs was the owner in fee simple of a certain lot in. the Thirteenth Ward of the city of Milwaukee, particularly described. In December, 1890, she and her huband had incumbered this lot by a mortgage in the amount of $800, securing a note in such' amount; and such mortgage was duly recorded in the office of the register of deeds of Milwaukee county the day after its execution. On March 15, 1894, Caroline Laabs and her husband conveyed the lot by warranty deed to one Frederick William Fenske, subject to the incumbrance of $800, which was assumed by the grantee. Frederick William Fenske and Louise, his wife, entered into possession of the premises; and on March 24, 1896, they executed and delivered to the plaintiff the deed. . . . The plaintiff, Louise Keller, was at the time of beginning the action a married woman; but in 1896 and until 1902 she was unmarried, and bore the name of Louise Sood, and is the grantee in remainder named in *437such deed. In snob deed Frederick William Fenske and bis wife conveyed tbe real estate in question to tbe plaintiff, reserving to Louise Fenske an estate therein for tbe period of ber natural life. Tbis deed was duly recorded in tbe office of tbe register of deeds of Milwaukee county on March 31, 1896, and Louise Fenske entered into possession of the premises, and became seised of a life estate therein, and tbe plaintiff became seised of tbe estate in remainder.’ Tbe principal sum of tbe mortgage incumbrance on tbe premises remained unpaid, and there was no interest paid upon tbe incumbrance after tbe period ending June 15, 1897. By reason of tbe default in the payment of principal and interest, tbe mortgagee instituted a suit for tbe foreclosure of tbe mortgage, making both Louise Fenske and tbe plaintiff parties defendant, and serving them with process, and filing notice of lis pendens in proper form. In such foreclosure action on December 18, 1897, judgment of foreclosure and sale in tbe usual form was entered, in tbe amount of $824.40, for tbe amount due upon tbe note and mortgage for principal and interest since June 15,1897, and for $171.96, solicitor’s fees, costs, and disbursements. Tbe judgment of foreclosure remained wholly unpaid, and after tbe expiration of tbe year for redemption tbe premises were advertised for sale pursuant to tbe judgment, and sold by tbe sheriff on February 13, 1899, h> W. II. Tim-lin, for tbe sum of $1,092.86, which sum was sufficient to pay tbe costs and expenses of tbe sale and tbe amount due upon the judgment and interest in full, leaving neither surplus nor deficiency. A sheriff’s deed was executed and delivered pursuant 'to tbe sale, and recorded, and report of sale filed, and sale confirmed. Three months thereafter and on May 11, 1899, Louise Fenske . . . procured ... a warranty deed of tbe same to be executed to her by W. H. Timlin and wife, and she paid therefor tbe sum that bad theretofore been paid upon tbe sheriff’s sale, and this deed was duly recorded. Tbis deed was executed to Louise Fenske alone as grantee, and continuously from March 24, 1896, and until ber death, she remained in possession of tbe premises, enjoying tbe use, income, profits and benefits thereof; and tbe rents, income, profits, and use of tbe real estate at all times exceeded in amount and value tbe amount of tbe interest on tbe mortgage indebtedness, together with tbe taxes and all other ex*438penses of maintaining tbe property. . . . On February 2, 1903, the defendant, Willimt F. F&nslce, obtained from Louise Fenske a warranty deed of the premises, which he-caused to be recorded. Louise Fenske died on April 5, 1903. . . All the conveyances referred to in the complaint, were executed, witnessed, and acknowledged so as to be entitled to record. Before the commencement of the action, and after the death of Louise Fenske, the plaintiff offered to the defendant to redeem the premises from such incumbrance as may have existed in favor of Louise Fenske by her subrogation to the mortgage in the amount advanced by her for the-discharge of the principal thereof and the costs of foreclosure,, and not repaid to her, which incumbrance had become vested in the defendant by conveyance to him from Louise Fenske; and the plaintiff demanded of the defendant a statement of' such amount, that she might pay the same, and that tire defendant release and quitclaim to her the premises on payment of such amount; and the defendant refused to release or quitclaim. the premises to the plaintiff upon any terms whatsoever, and denied her interest therein.”
The court, in its findings, stated:
“That the plaintiff was the niece of Frederick William Fenske, one of the grantors in the deed of March 24, 1890,. and the plaintiff was at such time and until the year 1902, a minor; that the amount paid by the purchaser at the foreclosure sale on February 13th, 1899, for the sheriff’s deed was $1,092.86, which was sufficient to pay the costs and expenses of such sale, the amount due upon the judgment, and interest, in full, leaving neither surplus nor deficiency, and that, of such amount, $81.53 represented interest accrued and unpaid upon $800, the principal sum of the mortgage, leaving $1,011.33, representing the principal of the mortgage indebtedness (without interest thereon), and costs, solicitor’s fees, and expenses of sale; and that no interest on the mortgage-incumbrance was paid after June 15, 1897. The findings further show that the defendant paid, as consideration for the-execution and delivery to him of his deed from Louise Fenske of February 2, 1903, an amount not in excess of $400, and that there was no other or further consideration for such deed, and that on May 8, 1903, and before the commencement of the action, the plaintiff demanded of the defendant the right *439of redemption, and offered to redeem tbe premises from defendant’s claim, wbicb demand and offer were refused, substantially as alleged in tbe complaint; that tbe defendant, after going into possession of tbe premises, expended upon tbe same for necessary repairs tbe sum of $150, and bad up to tbe time of tbe trial of tbe action, namely, January 27, 1904, collected as rents of tbe premises tbe sum of $94, and tbat tbe rental value of tbe premises was in excess of tbe taxes thereon and interest upon tbe sum of $1,161.33; and tbat tbe plaintiff bad on May 9, 1903, filed notice of Us pendens in tbe office of tbe register of deeds of Milwaukee county, and filed ber complaint in this action.”
Upon these facts tbe court ordered judgment in favor of tbe defendant, dismissing tbe complaint, and judgment Was entered accordingly. This is an appeal from tbe judgment.
‘ Eor tbe appellant there was a brief by Timlin & Glicks-man, and oral argument by Nathan Glicksman.
Eor tbe respondent there was a brief by J. M. Clarke and Hoiuard Van Wyck, and oral argument by Mr. Clarke.
Tbe following opinion was filed November 15, 1904:
SiebecKBR, J.
Tbe court found tbat defendant went into possession of tbe premises under warranty deed from tbe life tenant immediately upon ber death, and “tbat be received and accepted tbe deed . . . and entered into possession of tbe premises without any knowledge of any claim of right to or interest therein by tbe plaintiff.” It appears by tbe above statement of facts th^t tbe record of all tbe conveyances and foreclosure proceedings disclose tbat tbe interest in tbe premises at tbe time tbe foreclosure proceedings were instituted was apportioned between tbe defendant’s grantor, as life tenant, and plaintiff, as tenant in remainder, and tbat defendant’s grantor bad acquired and held the title obtained at tbe sale of tbe premises under tbe decree of foreclosure. ' Tbe defendant took tbe title from tbe original life tenant with knowledge of its burdens and restrictions, as between herself and tbe tenant in remainder, under tbe rule tbat tbe record*440ing of a deed entitled to record is constructive notice of its existence and contents to all subsequent purchasers of the land, and which holds them to have knowledge of what aj)-pears on the face of the title under which they claim. Pringle v. Dunn, 37 Wis. 449; Weeks v. M., L. S. & W. R. Co. 78 Wis. 501, 47 N. W. 737; Gilchrist v. Foxen, 95 Wis. 428, 70 N. W. 585.
]j appears that the original life tenant, Louise Eenske, was in possession of the premises at the time of the issuance of the sheriff’s deed under the foreclosure sale on Eebruary 13, 1899, and that she continued in such possession, collecting and using the rents, from the date of this sale to the time .she obtained the outstanding title under the foreclosure sale, and until her death. The defendant claims the right to the possession under deed from her from the date of her death. These facts show that the relationship of life tenant in jios-session and tenant in remainder subsisted at the time the life tenant purchased the outstanding title obtained at the foreclosure sale. Under these circumstances, the law regards this purchase by the life tenant as made for the joint benefit of herself and the tenant in remainder, and percludes her from holding it for her exclusive benefit, if the tenant in remainder will contribute her proper share of the sum paid for the interest thus acquired, which inures to the benefit of both. Whatever amount the life tenant paid above her proportionate share is secured to her as a creditor, and she becomes subro-gated to a lien on the real estate so purchased. Phelan v. Boylan, 25 Wis. 679; Melms v. Pabst B. Co. 93 Wis. 140, 66 N. W. 244; Allen v. De Groodt, 98 Mo. 159, 11 S. W. 240; Whitney v. Salter, 36 Minn. 103, 30 N. W. 755; Daviess v. Myers, 13 B. Mon. 511; Hunter v. Bosworth, 43 Wis. 583.
There is nothing in the findings of the court to show that an account was stated-between the parties as prayed for by plaintiff, should it be found that she is entitled to the relief asked for. This is, no doubt, due to the fact that the court *441f ound that plaintiff bad no interest in the property, and therefore had no right to an accounting. Since we find that plaintiff became the owner of the premises in fee simple at the termination of the life estate on the 5th day of April, 1903, the date of the life tenant’s death, it follows that the judgment must be reversed, and the action remanded, with directions that the court proceed to take the necessary proof for an accounting upon the matters involved, and incorporate the re-sult in a judgment which shall establish plaintiff’s title to the premises. In-the accounting the defendant should be charged with the income of the estate from the termination of the life estate, namely, April 5, 1903, less the amounts paid by him for taxes on the premises. Defendant is to remover such sums as he may have paid for improvements and to preserve the property since taking possession under the alleged deed of February 2, 1903. The right to reimbursement for improving and preserving .the estate since taking-possession is based upon the facts found by the court, that defendant acted innocently and in good faith under a mistake as to the true condition of the title. 3 Pomeroy, Eq. § 124-1.
The plaintiff is liable to the estate of the life tenant for the sum paid by the life tenant to purchase the outstanding title, less the interest paid thereon.
By the Gourt. — It is so ordered,
After the filing of the opinion and decision in this case on 'November 15, 1904, the appellant moved the court to correct 'the judgment so as to provide that there be paid, as a condition of plaintiff’s relief, directly to the respondent, the amount paid by his grantor to purchase the outstanding mort.gage title, less the interest thereon.
The following opinion was filed January 10, 1905:
Pee Ouexam.
After due consideration, we see no escape from the view that Louise Fenske, the life tenant, who paid • off the mortgage, did, by her warranty deed to the respondent, *442convey not only her life estate, but all tbe lien on the land which she acquired by reason of her payment of the mortgage. Larsen v. Johnson, 78 Wis. 300, 47 N. W. 615; Slaughter v. Bernards, 97 Wis. 184, 72 N. W. 977. As a result, all claims which she had to or upon that land, and which the plaintiff' would have been required to satisfy under the principles declared in the opinion in this case, became vested in the respondent; and he is entitled to be paid not only the several sums indicated in the opinion originally filed, but also the-amount of this mortgage lien.
It is therefore ordered that the judgment and mandate of this court be amended so as to direct that, as a condition of judgment in favor of the plaintiff, there be paid to the defendant the several sums indicated in our former opinion, including that therein directed to be paid to the estate of’ Louise Eenske.