Case ID: ohio-st_17/html/0063-01.html
Source: Caselaw Access Project
Author: {"author": "Welch, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Isabella Cairnes v. John Knight, Executor of Moses Cairnes, deceased.
    1. The provision of the code, that if no objection be taken on account of defect of parties, the defendant will be deemed to have waived the same, applies, by analogy, to proceedings in error.
    2. A written contract, binding the makers “to pay to J. C. $300, so as to secure to her 816.66 annually during life,” being an annuity payable to her by one of said makers, with a provision that, in case of any default in payment of the annuity, the whole sum of $300 shall be paid, is in the nature of a penal bond, and no more can be recovered upon it than the amount due on the annuity.
    Error to the district court of Carroll county.
    The original action was brought by the plaintiff in error against the defendant in error and one Samuel Mack. The plaintiff’s petition, in the common pleas, averred that said Moses Cairnes and Samuel Mack, on the 15th of March, 1853, executed and delivered to her an instrument in writing, of which the following is a copy:
    “ Know all men by these presents, that we, Moses Cams and Samuel Mack, do firmly bind ourselves, and heirs and *executors, administrators and assigns, unto Isabella Cams, wife of Michael Cams, deceased, in tbe sum of three hundred dollars, so as to secure unto her the sum of sixteen dollars and sixty-six cents and two-thirds of a cent, annually, from the fifteenth day of March, A. D. 1853, during her natural lifetime: it being my jiortion of annuities due her by me, the said Moses Cams first named, bequeathed to her by her said husband, Michael Cams, deceased. Now this contract is on this condition, which if the said Moses Cams do faithfully pay, or cause to be paid, the above-named sixteen dollars and sixty-six cents and two-thirds of a cent, annually, to the said Isabella Cams, or order, during- her natural life, then this is to cease at her decease; otherwise to be liable for the whole, with interest, if default be made any time after the fifteenth day of March, one thousand eight hundred fifty-four.
    “Moses Carns,
    “Attest: “ Samuel Mack.”
    “Thomas Knight.”
    The petition then alleged that defendantss failed to pay the installment due March 15, 1860, and demanded judgment for said sum of $300, less the prior installments which had been paid.
    
      The executor answered, insisting that no more than the $16.65 was due, and alleging that he had not paid the same because the plaintiff resided in Illinois, and had never demanded its payment.
    No answer was put in by Mack.
    The plaintiff demurred to the answer of the executor, and the court sustained the demurrer, rendering a judgment against the-defendants for $299.
    The executor filed a petition in the district court to reverse this judgment, but without making Mack a party thereto, and the judgment was accordingly reversed.
    No objection was taken in the district court for defect of parties and now a petition is filed here to reverse the judgment of the district court, the errors assigned being:
    1. That Mack was not made a party to the petition in error. *2. That the judgment of the common pleas should have been affirmed.
    
      D. W. iStambaugh, for plaintiff in error:
    1. The district court should not have proceeded to a hearing of' the case until all the necessary parties were before the court. Mack was not only not a party before that court, but did not ask for a reversal of the judgment.
    2. ' The written contract was intended to remove the incumbrance of the plaintiff’s annuity from real estate devised to Moses Cairnes, and to fix its value at $300 “liquidated damages.” 2 Greenl. Ev., sec. 259. To save the plaintiff from the necessity of expending a large portion of each installment of $16.66, in collecting it by suit, it was intended that one recovery should close the matter. Though the whole might be paid in installments of $16.66 each year, yet, upon default, it was the intention that the credit should cease. Should the plaintiff live to see eighty years, then $300 was too low an estimate of the value of the annuity.
    
      It. B. Knight, for defendant in error:
    1. The $300 mentioned in the written instrument should be considered as a penalty, and not liquidated damages. Beery v. Wisdom, 3 Ohio St. 241; 2 Greenl. Ev., sec. 258.
    2. As to Mack not having been made a party to the petition in-error in the district court: The plaintiff filed no motion to have-Mm made a party, and is now estopped from complaimng. Smetters and Harris v. Rainey et al., 14 Ohio St. 287.
   Welch, J.

The want of proper parties in the district court can not now be assigned for error. No objection on that account seems to have been taken in that court, and the objection ought therefore to be now hoM as waived. Such is the rule established by the code of civil procedure, in civil actions proper, and by analogy it should be made applicable to proceedings in error.

The fact set up in the answer that the plaintiff resided in Illinois, and never demanded the amount due, is no defense to the action for the $16.66. It was the business of the ^obligors to make payment without demand, just as it is the business of the maker of a note so to do. The court, therefore, did not err in sustaining the. demurrer.

But we are satisfied the court erred in holding the sum named in the writing — $300—to be liquidated damages, and not a penalty, and in rendering judgment accordingly for $299, instead of $16.66. It is the simple case of an obligation in a larger sum, to be discharged upon payment of a less sum. The instrument not only provides for the avoidance of the obligation upon payment of the less sum, but it declares the latter to be the amount actually due. According to well-established rules on the subject, either of these characteristics determines the larger sum named to be in the nature of a penalty.

The plaintiff’s counsel argues, that the $300 is too small a sum to be regarded as a penalty. He says that if plaintiff should live to be eighty years old, the annuity would be worth the $300. There is some mistake in this argument. The annual interest on $300 would be $18, and, therefore, if she were to live/orewer, the annuity would not be worth $300. He argues, also, that the annuity was originally a charge upon land, and that it is, therefore, unreasonable to suppose she meant to incur the expense and trouble of annual collections. The answer to this argument is, that it would involve as much trouble and expense to make the money from the land, as to collect it on a bond; and the fact that such expense and' trouble might be necessary, would be a reason for placing a low estimate, and not a high one, upon its present value. Such an annuity could not have been estimated by the parties at a sum yielding an interest exceeding the annual installments. The $300 must have been regarded as a penalty. It is a round sum, .adopted merely to measure the surety’s liability. It is substituted for the land, and, like it, is a security for the money actually to become due.

Judgment affirmed.

Day, C. J., and White, Brinkerhoee, and Scott, JJ., concurred.