PA28 INSTRUCTOR OBSERVES TWIN CESSNA SHORT FINAL; ABORTS TKOF CLRNC AS TWIN CESSNA LANDS. MKE TWR ATTEMPTS TO CORRECT CONFLICT WITHOUT SUCCESS.

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I WAS DEPARTING FROM MILWAUKEE GENERAL MITCHELL FIELD. WX WAS VFR; VISIBILITY GOOD. I WAS VFR TO ARB. MY INST STUDENT PLT WAS FLYING THE ACFT AND I WAS COMMUNICATING WITH CLRNC/GND/TWR. I (ACFT X) PICKED UP A CLRNC OUT OF THE CLASS C AIRSPACE. I THEN CONTACTED GND; WAS GIVEN TAXI INSTRUCTIONS TO RWY 13. DURING TAXI; I WAS ASKED TO CONTACT TWR WHEN READY FOR TKOF. I WAS ALSO ISSUED HOLD SHORT INSTRUCTIONS FOR RWY 13; WHICH I READ BACK. AT THE HOLD LINE THERE WAS AN ADDITIONAL ACFT AT THE OPPOSITE HOLD LINE WHICH WAS GIVEN TKOF CLRNC BEFORE I WAS. AFTER THE ACFT HAD DEPARTED; I WAS ISSUED A 'POS AND HOLD RWY 13.' ANOTHER ACFT MOVED UP TO THE HOLD LINE ON THE OPPOSITE SIDE OF THE RWY. I READ BACK THE POS AND HOLD INSTRUCTION AND WE STARTED TO TAXI ACROSS THE HOLD LINE. AS I DID; I LOOKED TO THE L AND CHKED THE INBOUND FLT PATH AND SAW A LIGHT TWIN (ACFT Y) ON WHAT I ESTIMATE TO BE A 1/2 MI FINAL FOR RWY 13. BY THIS TIME I WAS OVER THE HOLD LINE BUT NOT ON THE LNDG PORTION OF THE RWY. WE IMMEDIATELY STOPPED TAXI AND I ASKED THE LCL CTLR TO 'VERIFY POS AND HOLD' FOR OUR ACFT. THE LCL CTLR REPEATED 'POS AND HOLD RWY 13' FOR OUR ACFT. A COUPLE OF SECONDS AFTER HE SAID THIS; THE LCL CTLR ISSUED A GAR FOR THE LNDG ACFT. THE LNDG ACFT DID NOT GO AROUND BUT LANDED ON RWY 13. ONCE THE LNDG ACFT HAD LEFT THE RWY; WE WERE GIVEN A CLRNC TO TAKE OFF. THIS WE DID; AND THE LCL CTLR THANKED US FOR OUR HELP AS HE XFERRED US TO DEP. I HAVE ALWAYS TAUGHT MY STUDENTS TO LOOK AND CHK THE INBOUND PATH WHEN TAXIING ONTO A RWY (ON EITHER A CTLED OR UNCTLED FIELD). IN THIS CASE; I PRACTICED MY OWN TEACHINGS WHICH AVERTED WHAT MAY HAVE BEEN A SERIOUS ACCIDENT.