Wayman v. Cochrane

Mr. Chief Justice Walker

delivered the opinion of the Court:

The only question which we propose to consider in this case is, whether the court below erred in computing interest at the rate of ten per cent. The bond bore ten per cent., and the mortgage given to secure its payment recites the bond and contains a covenant for the payment of the debt and interest named in the bond according.to the-.condition thereto annexed. Afterwards the defendant in error instituted suit, and recovered a judgment at law on the bond for- the principal and interest. This bill was subsequently filed to foreclose the mortgage and subject the premises to sale for - the payment of -.the mortgage debt -and interest.. On the hearing in the court below, the court rendered - a decree for the. debt, and unpaid interest, at the rate of ten per cent, per annum, from the date of the bond until the rendition of-the-decree. It is -now urged that this was erroneous, as the court below should have allowed interest on the judgment recovered at law, at the rate of six per cent, per annum, from its date until the time of rendering the decree.

The general rule is, that by a judgment at law or a decree in chancery, the contract or instrument upon which the proceeding is based becomes entirely merged in the judgment. By the judgment of the court, it loses all of its vitality and ceases to bind the parties to its execution. Its force and effect are then expended, and all remaining legal liability is transferred to the judgment or decree. Once becoming merged in the judgment, no further action at law or suit in equity can be maintained on the instrument. All rights and liabilities originally imposed by, or growing out of, the instrument or agreement terminate with the judgment of the court. This being so, when the judgment was rendered on the bond in this case, it ceased to be evidence of the debt, and the judgment then became the evidence and only evidence that could be used in a court of the existence of the original debt. And that debt could only bear six per cent, interest, whether evidenced by a judgment or a decree. White v. Hoffaker, 27 Ill. 349. Then if the judgment was the evidence, the decree should have been for the amount of the judgment with six per cent, interest thereon from the date of its rendition to the time the decree was rendered.

The mortgage is only an incident of the debt. Olds v. Cummings, 31 Ill. 188; Vansant v. Allmon, 23 id. 30; Sargent v. Howe, 21 id. 149. And the assignment of the debt, in equity, carries with it the benefit of the security. Ho principle is better settled than that the payment or discharge of the debt satisfies the mortgage. It can only exist and draw aliment from the debt to which it is incident. When the debt has changed to a judgment, the mortgage then is changed, in effect, to a security for the payment of the judgment. The satisfaction of the judgment by the payment of the sum recovered, with six per cent, interest per annum, would discharge the mortgage. The assignment of the judgment would be an equitable transfer of both the judgment and the mortgage.

The mortgage being an incident of the bond, when it became merged in the judgment, the mortgage was then a security for its payment and no more. A suit on the covenant could only be maintained to recover damages equal to the judgment and interest. A party cannot recover on the same contract different measures of damages. When the debt was reduced to a judgment it reduced the interest to six per cent., and the security can be no larger or capacious than its principal, and could only be held for the judgment and its interest.

The questions in reference to service on Jane Wayman have been discussed and determined, in the case of Wayman v. Crosier, post. We, therefore, deem it unnecessary to again discuss them here.

The decree of the court below must be reversed and the cause remanded for further proceedings not inconsistent with the principles announced in this opinion.

Reversed md remmded.