The object of providing a penalty in a contract like this before us, is not to excuse a party, but to compel him to perform his contract.
In 1 Pothier on Obligations, 280, in treating of the third principle of penal obligations, it is said, “ the object of the penal obligation is to assure the execution of the principal.” “ Therefore, where the penal obligation attaches from a default in executing the principal, the creditor may, instead of enforcing the penalty, proceed upon the principal obligation.”
In Howard v. Hopkyns, 2 Atkins, 371, Lord Hardwicke held that a penalty does not release parties from their agreement, for though the penalty is incurred, -they must perform it notwithstanding.
In this case the penalty was, the forfeiture of the stock, and to become a stranger to the property, at the option of the appellee. Yet the party is bound to pay the calls on his stock, as that is Ms contract. How else could a trustee in such case, protect himself under the great responsibilities he had assumed. Declaring a forfeiture, would not put the trustee in funds to meet the liabilities of his trust.
The case of Mason v. Caldwell, 5 Gilman, 204-5, is in principle precisely like this case, and is decisive of it. The penalty in that case, as in this, was to insure a prompt performance of the contract the parties had entered into with the appellee. It is for him to declare a forfeiture, and until he does, the subscribers are bound to pay their subscriptions.
The evidence is not preserved by bill of exceptions, so that we cannot determine what facts were before the court to justify the finding the precise sum as found. In the record itself we see no error, and therefore affirm the judgment.
Judgment affirmed.
Catón, C. J., did not sit in this case, nor take any part in the hearing and judgment.