Kurtz v. Sponable

The opinion of the court was delivered by Kingman, C. J. : The defendants in error sued Kurtz and wife on a note and mortgage. The note was made by Kurtz; and the mortgage by Kurtz and wife, to secure the note. The note and mortgage were both made to Stoddart and the note was assigned by him to defendants [397] in error. There is no averment in the petition that the mortgage was assigned, nor is there any explicit and positive averment that the defendants in error were the owners of the mortgage. 1. assignament on security. ' The plaintiffs in error insist that the judgment of foreclosure on this presentation of facts was unauthorized. It is not pretended that the petition does not show an assignment of the note, and absolute ownership thereof by the defendants in error. This we think was sufficient. Under our laws, the mortgage is but appurtenant to the debt; a mere security; and under ordinary circumstances, whoever own^ the debt, owns the mortgage. And this is the prevailing doctrine upon this subject in this country. An assignment of the debt ordinarily carries the mortgage with it: 1 Hilliard on Mortgages, 221. That there are decisions holding a contrary doctrine is admitted, but they are not very generally followed, and are hardly applicable to our laws as to mortgages. 2. contract,,,viovoid. ‘ ' II. One other error is alleged: The mortgage was made iu July, 1868, and covenanted for the payment of twelve per cent, interest on the note, and the further sum of two hundred dollars as liquidated damages in case of foreclosure of the mortgage; and this sum was included in the judgment. This, wo think, was error. There is no doubt that the judgment was in accordance with the contract and undei’standing of the parties ; but the contract itself is one that tlxc law will not sanction. It presents the case of one man contx’acting to pay a cex-tain sum of money at a fixed time with the largest rate of intex’est allowed by law, with the further stipulation that if the debt is not paid and a foreclosure is resorted to, ho [398] will pay a still larger sum as liquidated damages — not as the costs of the foreclosure, for that is provided for by law, and does not depend upon the contract of the parties ; not as attorneys fees, for that the law did not allow: (4 Nans., 339.) In the language of the learned judge delivering the opinion of the court in the case of Gray v. Crosby, 18 Johns., 223, “Liquidated damages are not “ applicable to such a case. If they were they might “ afford a secure protection for usury, and countenance “ oppression under the forms of law.” See also 16 Ill., 400, and Sedg. on the Measure of Dam., 420, 442. The judgment must be modified by leaving out of it the sum of two hundred dollars allowed as liquidated damages. Ordered accordingly. All the Justices concurring.