Case Name: Waggoner v. Cox
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1884-01
Citations: 40 Ohio St. 539
Docket Number: 
Parties: Waggoner v. Cox.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 40
Pages: 539–543

Head Matter:
Waggoner v. Cox.
1. Where the larger sum mentioned in a note is the actual debt, and a smaller sum has been agreed ttpon as a release, if paid under stated conditions, the failure to comply with the easier terms gives the creditor the right to enforce the payment of the larger sum.
2. Where damages, resulting from a failure to comply with the easier terms, are uncertain or impossible of ascertainment, the stipulated sum will he treated as an alternative sum to be paid unless manifestly inequitable.
Ekroe to the District Court of Hamilton County.
On the 5th day of August, 1866, Jacob Cox died intestate. At the time of his death he was seized of one hundred acres of land in Hamilton county of the value of 116,000. His wife Sarah Cox and seven children survived him. In April, 1867, and after' the children had partitioned the land among themselves, the widow entered into a contract with her children in regard to her dower interest. Upon each of the children giving a note secured by mortgage upon his or her portion of the land, she released her right of dower therein. The note reads as follows:—
“ For value received, I promise to pay to Sarah Cox eight hundred dollars on the first day of September next; provided that if I pay to the said Sarah Cox semi-annually on each first day of September and first day,of March twenty dollars, amounting to forty dollars a year, during the life of the said Sarah Cox, it shall discharge the whole debt. This note is secured by properly stamped mortgage. Given under my hand this 27th day of April, 1867.”.
One of these children was Ann Cox, who married Abraham Lenhart in the fall of 1869. The condition of the mortgage upon her portion of the land — fifteen and a half acres — was as follows:—
“ That if the said Ann Cox shall cause to be paid unto said Sarah Cox eight hundred dollars, or in lieu thereof twenty dollars semi-annually, on every first day of September and first day of March, during the lifetime of the said Sarah Cox, according to a note of hand dated April 27th,' 1867, signed by the said Ann Cox, drawn in favor of the said Sarah Cox, then these presents shall be void.”
On the 7th day of October, 1869, John H. Glensman purchased of Ann Cox her fifteen and a half acres encumbered by the mortgage given by Ann Cox to her mother Sarah Cox. Glensman afterwards paid the semi-annual installments up to and including March 1st, 1877. The installments due September 1st, 1877, and March 1st, 1878, were not paid. On March 5th, 1878, an action was begun in the court of common pleas of Hamilton county, Sarah Cox against Ann Lenhart, John H. Glensman and others. In the prayer of the petition she asked judgment for the $800 with interest from September 1st, 1878; for a sale of the mortgaged premises and that the amount of the note with interest be paid out of the proceeds.^
The judgment of the court of common pleas was in accordance with this prayer. During the progress of the trial the defendants tendered to Sarah Cox the sum of $200 and her costs, in full satisfaction of the semi-annual payments to that date, the note and mortgage to remain in full force as security for future dues.
Isaac J. Miller and Francis Lampe, for plaintiff in error.
The stipulation to pay $800 in the nature of a penalty. Longworth v. Asieren, 15 Ohio St., 875. As to whether the sum to be paid is a penalty or liquidated damages, see 3 Parsons on Contracts, 159; Sedgwick on the Meas, of Dam., 421; Tiernan v. Herman, 16 111., 400; Haldeman v. Jennings, 14 Ark. (1 Barb.), 329; Beale v. Hayes, 5 Sandf. (N. Y.), 640; Hutchison v. McNutt, 1 Ohio, 20; 2 Story on Equity, § 1314; Broclmay v. Ciarle, 6 Ohio, 45; Pollock on Contracts, side page 446; Peachey v. Buhe of Somerset, 2 White & Tudor, 2024 and 2044; Seton v. Slade, Id., 1132, Lead. Cas. in Eq.
Hoadly, Johnson Colston, for defendant in error.
The sum of $800 was money due by contract. Thompson v. Hudson, 4 Eng. & Irish App., 28; Berrinhott v. Traphagen, 39 Wis., 219. For the rule in regard to penalties, see Sutherland on Damages, 497, 498; Mayne on Damages, 126; Thompson v. Hudson, L. R., 4 Eng. & Ir. App., 27; James v. Thomas, 5 Barn, and Ad., 40; Schooley f Price v., Romain, 31 Maryland, 574, 578,579; Baldwins. Van Vorst, 2 Stock Eq., 581; Robinson v. Loomis, 61 Pa. St., 78; Leading Cases in Equity, vol. 2, part 2, p. 2049, last paragraph; Early v. Rogers, 16 How., 599; Jaequith v. Hudson, 5 Mich., 123. And see also Lange v. Werlc, 2 Ohio St., 533; Berry v. Wisdom, 3 Id., 241, 244; Grrasselli v. Lowdon, 11 Id., 361; Wolf Creelc Co. v. Schultz, 71 Pa. St., 180; Sutton v. Howard, 33 Ga., 536; Hodges v. King, 7 Met., 583.

Opinion:
Nash, J.
The evidence shows that the parties who had the best opportunity of knowing the physical condition of Sarah Cox and the probable duration of her life, considered her life interest, in one third of the fifteen and one-half acres of land apportioned to Anna Cox, to be of the value of eight hundred dollars. This interest Ann Cox bought and gave to her mother therefor a note and mortgage, which provided two modes of payment, namely: Eight hundred dollars on the 1st day of September, 1867, or twenty dollars on each 1st day of September and March until the death of Sarah Cox. The plaintiffs in error claim that the stipulation to pay $800 is in the nature of a penalty, and admit that there was no error in the proceedings of the courts below if this stipulation is not so considered.
The question here presented is difficult of solution. Where, in case of a failure to pay a sum which is the actual debt, it is stipulated that a larger sum, which is not the actual debt, shall be paid, such larger sum will be regarded as a. penalty. The case of Longworth's Executors v. Askren et al., 15 Ohio St., 370, seems to have been determined upon this principle. In that case the court found that the smaller and not the larger sum was the principal debt, and therefore held that the larger sum was in the nature of a penalty.
In the case before us we conclude from all the facts that ' the sum of $800 was the price agreed to be paid to Sarah Cox for her dower interest in Ann's land and was the principal debt. To this state of facts another principle applies and is decisive. When the larger sum is the actual debt, and a smaller sum has been agreed upon as a release if. paid under stated conditions, the neglect to comply with the easier terms gives the creditor the right to compel the payment of the larger sum. 1 Sutherland on Damages, 499.
There is another important consideration in this case. The amount to be paid in installments was not a fixed sum, but was uncertain and conjectural. No data are apparent from which the actual damages to Sarah Cox can be calculated in case of a failure to pay the semi-annual installments. Under these circumstances the stipulated sum will be regarded as liquidated damages, unless facts appear which would make it inequitable to pursue this course. Berrikott v. Traphagen, 39 Wis., 219; Bagley v. Peddie et al., 5 Sandf., 192; Coal Co. v. Schultz et al., 71 Pa. St., 181; Jacquith v. Hudson, 5 Mich., 123.
To compel Mrs. Cox to resort to a suit at law whenever there is a default in the payment of the $20 would be inequitable, and this would be the only practicable remedy in case the eight hundred dollars should be treated as in the nature of a penalty.
Judgment affirmed.