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Steiner v. Wisconsin American Mutual Insurance Co.6/9/2005
ould not be extended unless the circuit court had reserved the power to do so.
WAMIC is correct: Exchange Corp. can be viewed as holding that when a vendee is in breach of a land contract and the circuit court has entered a strict foreclosure judgment, title vests in the vendor without any further action of the parties or the circuit court should the vendee fail to pay the full purchase price during the redemption period set by the court. WAMIC's position is supported by at least two property treatises that state that upon expiration of the redemption period, the land contract vendee's equitable rights in the property are cut off, and the vendor is the sole owner of the property.
Given this, WAMIC asserts that the failure of Wis. Stat. § 846.30 to mention any change from the common law rule announced in Exchange Corp. about when title passes under a defaulted land contract must mean that the common law still stands and any circuit court order subsequent to the judgment is merely a confirmation that equitable title has already passed to the vendor.
The plaintiffs dispute WAMIC's reading of the common law under Exchange Corp. They contend that in a defaulted land contract, equitable title does not automatically revert to the land contract vendor at the end of the redemption period absent any additional court action. The plaintiffs rely on a 1937 case, St. Joseph's Hospital v. Maternity Hospital, as a declaration of the common law. In St. Joseph's Hospital, the court concluded, "A judgment of strict foreclosure of a land contract does not produce absolute finality. In such judgments, a subsequent order barring the defendant's interest and claims for want of redemption is essential in order to declare and quiet title in the plaintiff . . . ." The St. Joseph's Hospital court declared that because the strict foreclosure judgment was not absolute, a court has equitable power to allow a land contract vendee to pay under the land contract, even if the vendee had failed to pay before expiration of the redemption period.
The plaintiffs are correct: St. Joseph's Hospital demonstrates that the land contract vendee's equitable ownership interest does not automatically transfer to the vendor; a judicial decree is needed. According to St. Joseph's Hospital, if the land contract vendee's equitable ownership interest had automatically transferred to the vendor upon expiration of the redemption period, the court would not have been able to allow the vendee's interest in the property to continue after expiration of the redemption period.
Although cases subsequent to St. Joseph's Hospital have expressed reservations about the continued vitality of the St. Joseph's Hospital rule, the plaintiffs argue that St. Joseph's Hospital was the basis for the second and final sentence of Wis. Stat. § 846.30. The plaintiffs assert that the sentence is a codification of St. Joseph's Hospital and establishes that equitable title to property in a land contract remains with the land contract vendee, despite strict foreclosure and despite nonredemption by the vendee, until a circuit court enters a final order declaring title in the land contract vendor.
The first sentence of Wis. Stat. § 846.30 is not a substantial change from the common law. All that the first sentence does is place a limit on a circuit court's discretion in setting a period of redemption. A circuit court cannot completely deny a period of redemption; the redemption period must be, at a minimum, seven working days. Courts still have significant control in setting redemption periods, just as before the enactment of § 846.30; the standard continues to be reasonableness in light of the circumstances.
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