Real ex or not the written document is the binding record of the contract" (a). "The rules excluding parol evidence have no place in any inquiry in which the Court has not got before it some ascertained paper beyond question binding and of full effect" (b). So in the late case of Jervis v. Berridge (c) it was held that a document purporting to be a written transfer of a contract for the purchase of lands" was . . not a contract valid and operative between the parties but omitting (designedly or otherwise) some particular term which had been verbally agreed upon, but was a mere piece of machinery . . subsidiary to and for the purposes of the verbal and only real agreement." And since the object of the suit was not to enforce the verbal agreement, nor "any hybrid agreement compounded of the written instrument and some terms omitted therefrom," but only to prevent the defendant from using the written document in a manner inconsistent with the real agreement, there was no difficulty raised by the Statute of Frauds, "which does not make any signed instrument a valid contract by reason of the signature, if it is not such according to the good faith and real intention of the parties." If it appears that a document signed by the parties, and apparently being the record of a contract, was not in fact intended to operate as a contract, then "whether the signature is or is not the result of a mistake is immaterial” (). We shall see however that the heads now to be discussed ceptions in present two classes of really exceptional cases recognized by equity. equity. Artificial rules of construc First, those in which equity applies to instruments of certain kinds rules of construction which (as regards the actual terms tion: origin of the instruments) are highly artificial, so artificial, indeed, assigned to that they come to much the same thing as presuming a verbal agreement inconsistent with and operating to vary the written. agreement. them. (a) Per Bramwell, B. Wake v. Harrop, 6 H. & N. at p. 775, 30 L. J. Ex. at p. 277. (b) Guardhouse v. Blackburn, L. R. 1 P. & D. 109, 115. And see per Page Wood, V.-C. in Druiff" v. Lord Parker, 5 Eq. 131, 137. (c) 8 Ch. 351, 359, 360. (d) Per Bramwell, B. Rogers v. Hadley, 2 H. & C. 227, 249, 32 L. J. Ex. 241. In this case there was "a real contract not in writing and a paper prepared in order to comply with some form, which was stated at the time to contain a merely nominal price." The ground on which these rules were established (or at any rate which in modern times has been relied on to account for them) was that the manner in which the parties had expressed their intention did not correspond with their true intention. We must therefore consider the cases governed by the rules in question to have been originally cases of relief against mistaken expression. But since the doctrine of equity has been fixed and uniform they have practically ceased to have any such nature. For persons who make contracts are presumed to know the law of the land, including the law administered by courts of equity; and therefore they must be presumed to know that if the nature of the contract and the terms used in framing it fall within the scope of these peculiar rules which have now become fixed rules of construction, the contract will be interpreted accordingly. And in fact they generally do know this, and use the accustomed expressions for the very reason that they have acquired a definite artificial meaning in courts of equity. It seems proper, on account of the origin of these equitable rules, to say something of them in this place, though not to go into details belonging to the fuller treatment of the special departments affected by them. admission written In the other class of exceptional cases, which form the last Limited division of the subject, courts of equity admit oral evidence, of oral for certain purposes and under certain limitations, to show that evidence by reason of a mistake the terms of a written instrument fail to against express the real intention of the parties, and that the real contract. agreement is different from the written agreement. It will be obvious from the foregoing remarks that this class originally included the last. We proceed to consider the topics thus indicated. 2. Peculiar rules of Construction in Equity. The material exceptions to the rule that contracts are construed alike at common law and in equity are A. Restricted construction of general words, and especially B. Stipulations as to time. c. Penalties. Restricted construction of general words carried farther than by common law: especially in releases. A. Restriction of General Words. We have seen that courts of law as well as courts of equity have assumed a power to put a restricted construction on general words when it appears on the face of the instrument that it cannot have been the real intention of the parties that they should be taken in their apparent general sense. But courts of equity will do the like if the same conviction can be arrived at by evidence external to the instrument. Thus general words of conveyance (a) and an unqualified covenant for title (b), though not accompanied as in Browning v. Wright (c) by other qualified covenants, have been restrained on proof that they were not meant to extend to the whole of their natural import. This jurisdiction is exercised chiefly in dealing with releases. Here the principle is well established that "the general words in a release are limited always to that thing or those things which were specially in the contemplation of the parties at the time when the release was given" (d). This includes the proposition that in equity "a release shall not be construed as applying to something of which the party executing it was ignorant" (e). There is at least much reason to think that it matters not whether such ignorance was caused by a mistake of fact or of law (ƒ). In particular a release executed on the footing of accounts rendered by the other party, and assuming that they are correctly rendered, may be set aside if those accounts are discovered to contain serious errors. It would be otherwise however if the party had examined the accounts himself and acted on his own judgment of their correctness. An important application of this doctrine is in the settlement of partnership affairs between the representatives of a deceased partner (especially when they are (a) Thomas v. Davis, 1 Dick. 301. (c) 2 B. & P. 13. Supra, p. 408. cited 2 Mer. 353; Dav. Conv. 5. pt. 2. 622-4. (e) Per Wilde, B. Lyall v. Edwards, 6 H. & N. 337, 348, 30 L. J. Ex. 193, 197. This was a case of equitable jurisdiction under the C. L. P. Act, 1854 but before that Act courts of law would not allow a release to be set up if clearly satisfied that a court of equity would set it aside : Phillips v. Clagett, 11 M. & W. 84. (ƒ) See the cases considered at pp. 369-70 above. continuing partners) and the persons beneficially interested in his estate (a). A releasor, however, cannot obtain relief if he has in the meanwhile acted on the arrangement as it stands in such a way that the parties cannot be restored to their former position (b). B. Stipulations as to Time. time. StipulaIt is a familiar principle that in all cases where it is sought tions as to to enforce contracts consisting of reciprocal promises, and "where the plaintiff himself is to do an act to entitle himself to the action, he must either show the act done, or if it be not done, at least that he has performed everything that was in his power to do" (c). Accordingly, when by the terms of a contract one party is to do something at or before a specified time, and when he fails to do such thing within such time, he could not afterwards claim. the performance of the contract if the stipulation as to time were construed according to its literal terms. Now "at law time is always of the essence of the contract. When any time is fixed for the completion of it, the contract must be completed on the day specified, or an action will lie for the breach of it. This is not the doctrine of a court of equity; and although the dictum of Lord Thurlow that time could not be made of the essence of a contract in equity (d) has long been exploded, yet time is held to be of the essence of the contract in equity, only in cases of direct stipulation or of necessary implication" (e). A court of equity looks at the whole scope of the transaction to see whether the parties really meant the time named to be of the essence of the contract. And if it appears that, though they named a specific day for the act to be done, that which they really contemplated was only that it should be done within a reasonable time; then this view will be acted upon, and a party who according to the letter of the contract is in default and incompetent to enforce it will yet be allowed to enforce it in accordance with what the Court considers its true meaning. (a) Millar v. Craig, 6 Beav. 433 ; Lindley, 2. 981, and as to accounts stated, ib. 1026. (b) Skilbeck v. Hilton, 2 Eq. 587, but qu. whether the principle was rightly applied in the particular case. (c) Notes to Peeters v. Opie, 2 Wms. Saund. 743. (d) See Seton v. Slade, 7 Ves. 265, 275; and notes, 2 Wh. & T. L. C. 513, sqq. (e) Parkin v. Thorold, 16 Beav. 59, 65. This is especially the case with regard to contracts between vendors and purchasers of land. "Courts of Equity have enforced contracts specifically, where no action for damages could be maintained; for at law the party plaintiff must have strictly performed his part, and the inconvenience of insisting upon that in all cases was sufficient to require the interference of courts of equity. They dispense with that which would make compliance with what the law requires oppressive, and in various cases of such contracts they are in the constant habit of relieving the man who has acted fairly, though negligently. Thus in the case of an estate sold by auction, there is a condition to forfeit the deposit if the purchase be not completed within a certain time; yet the court is in the constant habit of relieving against the lapse of time and so in the case of mortgages, and in many instances, relief is given against mere lapse of time where lapse of time is not essential to the substance of the contract." So said Lord Redesdale in a judgment which has taken a classical rank on this subject (a). It was once even supposed that parties could not make time of the essence of the contract by express agreement; but it is now perfectly settled that they can, the question being always what was their true intention (b). "If the parties choose even arbitrarily, provided both of them intend to do so, to stipulate for a particular thing to be done at a particular time," such a stipulation is effectual in equity as well as at law. A court of equity will not interfere to make a new contract which the parties have not made (c). And although time is not originally of the essence of the contract, yet subsequent "express notice will make time of the essence of the contract, where a reasonable time is specified" (d): as on the other hand conduct of the party entitled to insist on time as of the essence of the contract, such as continuing the negotiations without an express reservation after the time has past, may operate as an (a) Lennon v. Napper, 2 Sch. & L. 684, cited by Knight Bruce, L. J. Roberts v. Berry, 3 D. M. G. at p. 289, and again adopted by the L. JJ. in Tilley v. Thomas, 3 Ch. 61. (b) Seton v. Slade, 7 Ves. 265, 275, and notes to that case in 2 Wh. & T. L. C.; Parkin v. Thorold, supra. (c) Per Alderson, B. Hipwell v. Knight, 1 Y. & C. (Ex.) 415. And see the observations of Kindersley V.-C. to the same effect in Oakden v. Pike, 34 L. J. Ch. 620. (d) Parkin v. Thorold, 16 Bear. at p. 75; Dart, V. & P. 388; and see Williams v. Glenton, 1 Ch. 200, 210. |