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takes words of substance that are rarely used, to be equivalent to words of substance that are usual.”. So, in contracts it is not material which of the parties speak the words, if the other agrees to them; for the agreement of the minds of the parties is the only thing the law respects in contracts; and such words as express the assent of the parties, and have substance in them, are sufficient. (k) And Willes, Ch. J. in the case of Packhurst v. Smith, (?) observes, “it is a known maxim in law, that benigna faciendæ sunt interpretationes chartarum ut res magis valeat quam periat.' ” There is also another, that, “ verba intentioni et non e contrà debent inservire." His lordship also further observes, “ That it is said in our books that the construction of deeds ought to be favourable, and as near to the apparent intent of the parties as possibly may be, and as the law will permit ; that too much regard is not to be had to the natural and proper signification of words and sentences to prevent the simple intention of the parties from taking effect; for that the law is not nice in grants, and therefore it doth often transpose words contrary to their order, to bring them to the intent of the parties ; for neither false Latin nor false English will make a deed void, if the intent of the parties doth plainly appear. I have collected these rules and maxims from Littleton, Plowden, Coke, Hobart, and Finch, persons of the greatest authority. But they are themselves so full of justice, and good sense, that they do not want any authority to support them, and I do not know that they were ever yet controverted. On the foundation of these rules, whenever it is necessary to give an opinion upon the doubtful words of a deed, the first thing we ought to enquire into, is, what was the intention of the parties. If the intent be as doubtful as the words, it will be of no assistance at all. But if the intent of the parties be plain and clear, we ought, if possible, to put such a construction on the doubtful words of a deed as will best answer the intention of the parties, and reject that construction which manifestly intends to overturn and destroy it. I admit that though the intent of the parties be never so clear, it cannot take place contrary to the rules of law, nor can we put words in a deed which are not there; nor put a construction on the words of a deed directly contrary to the plain sense of them. But where the intent is plain and manifest, and the words doubtful and obscure, it is the duty of the judges to endeavour to find out such a meaning in the words as will best answer the intent of the parties." And Lord Ch. B. Comyns in his Digest (m) also states, “That an agreement or contract shall have a reasonable construction, according to the intent of the parties; as, if a man agree with B. for twenty barrels of ale, he shall not have the barrels after the ale is spent.” So, if a man promise pay(k) Ibid. Fo. 140.
(m) Tit. Agreement, C. et tit. Parols. (1) Willes Rep.332. Shep. Touch. c.5. p. 86.
ment without saying to whom, it shall be intended to him from whom the consideration comes. (n) And upon a promise of payment according to the rate of 40s. per ton, it shall be intended that he will pay for the odd pounds according to the same rate. (o) Again, if one promise payment upon Easter-day, if A. do not pay the same day, A. has all the day for payment; and therefore it shall be intended of a payment afterwards upon request. (p) Pothier's seventh rule of construction is, that in case of doubt, a clause ought to be interpreted against the person who stipulates any thing, and in discharge of the person who contracts the obligation. But the rule of construction adopted by our courts of law is quite the reverse; namely, that in case of doubt, the words of a promise, or covenant, shall be taken most strongly against the promisor or covenantor. (9) Lord Bacon, however, in commenting upon this general maxim, says,
“ It is to be noted that this is the last rule to be resorted to, and is never to be relied upon but where all other rules of exposition of words fail; and if any other rule come in place, this giveth place;" and adds, “ that it is a point worthy to be observed generally of the rules of law, that when they encounter and cross one another, that be understood which the law holds to be worthier and to be preferred ; and it is in this particular very notable to consider, that this being a rule of some strictness and rigour, doth not as it were its office, but in the absence of other rules which are of some equity and humanity.” Lord Eldon also, in a very recent case, observes, (r) “ It is certainly true that the words of a covenant are to be taken most strongly against the covenantor ; but that must be qualified by the observation, that a due regard must be paid to the intention of the parties, as collected from the whole context of the instrument.” Though the rule of construction of agreements is the same in a court of equity as in a court of law, yet the consideration of performance differs; for at law a covenant and agreement must be strictly and literally performed; but in equity it is sufficient if it be really and substantially performed according to the true intent and meaning of the parties, so far as circumstances will admit. *
The executors and administrators of the contracting parties are generally comprehended in every contract though not mentioned, (s) but the heir is not bound unless expressly named.(t) We have just seen (*) that where the language and terms of a contract appears doubtful in their construction, it may be explained by the common use of those terms in the country or place where it is made, and not where the action is brought : (v) But such a mode of construction cannot be
(n) Cro. El. 149. 848. Poph. 182. Noy. 83.
(o) Yelv. 134.
(*) Vide 3 Ves.jun. 692.
adopted in any case where it would militate against any general rule of law; as, where corn is sold at a fixed price per bushel, evidence that either a customary measure, or some other than the Winchester measure was intended, is inadmissible ; this being the general standard measure of the country established by act of parliament. (u) And though it be usual that mercantile contracts should be construed conformably to the usage and custom of merchants, yet evidence of usage is not admissible to controul or contradict the plain unequivocal language of a contract or agreement. Thus, where A. agreed to sell to B. a quantity of bacon, which he warranted to be of a particular quality, and upon delivery at the wharf B. weighed and examined part of the bacon, and paid for the whole by a bill at two months ; but before the bill became due, it turned out, on further examination, that the bacon was not agreeable to the contract, and he gave notice thereof to A. It was determined, that A. could not give in evidence a custom in the bacon trade, that the buyer was bound to reject the contract if dissatisfied therewith at the time of his first examining the commodity; and that having neglected to do so, in the first instance, he was excluded from future objections. (w)
Upon a contract where the quantity and quality of an article are not mentioned, the previous dealings of the parties, or other circumstances, may be called in aid to give effect to the contract, and to explain the intention of the parties, provided such evidence does not controul the legal sense of the terms of the contract; as, if two men should bargain for wheat without mentioning the quantity or sort, it would be an imperfect bargain; but if, by their former dealings, it appeared that wheat of a particular kind, and of a certain quantity had been usually delivered, the contract or bargain may be construed conformably to such previous dealings; but the subsequent acts or dealings of the contracting parties cannot be allowed to controul or explain their original mode of dealing and intention. () Upon an agreement made in London, to pay 1001. in Dublin, payment in Irish currency shall be presumed. (y) So, if the value of any article is stipulated in a contract, such value shall be intended to be the value at the time when the contract is to take effect, and not at the time of making it; as, if one agrees to pay at such a day five quarters of wheat, and on the day of the contract they were worth 501., but on the day of payment only 5l.; the party to whom the promise was made would be entitled to receive either the wheat or the 51., but no more. (z)
In some cases the natural and ordinary import of words may be restrained, if such an interpretation would render the agreement wholly
(u) Vide 4 T.R. 514. 6 T. R. 338. (x) 1 Powell on Contracts. 384.
(w) Yeates v. Pinit, Holt Ca. Ni. Pri. (y) Davis Rep. 28. 95. 2 Marsh. Rep. 141. Sec also Phillipps (2) Dy. Rep. 82. b. on Evid. c. 10. s. 2.
inoperative, and be manifestly repugnant to the real intention of the parties; as, where a man gave his promissory note, in which he expressed the consideration to be for money previously borrowed and received, and then added these words, “ which I promise never to pay;" the word "never" may be rejected. (a) Again, where a particular construction would lead to consequences ruinous to the contractor, and such as no rational or prudent man could be presumed to have contemplated, and a different mode of construction may be made without doing violence to the terms of the contract ; such an interpretation may, it is presumed, be given.
Though it be a general rule of law, that parol evidence cannot be admitted to contradict, add to, or vary the terms of any written instrument; (6) yet consistently with this rule parol evidence is admissible to show, that after the making of the agreement, the parties entered into some new stipulation, or agreed to extend the time of performance; as in the case of a contract to deliver bacon on particular days, parol evidence of a subsequent agreement as to the extension of the time of the deli. very of the bacon is admissible. (c) So, parol evidence will be allowed to explain an indefinite or immaterial expression, or the intention of the parties when not clearly apparent on the face of the instrument, provided the evidence is not inconsistent therewith. (d) And parol evidence is also admissible to contradict the terms and circumstances under which a contract was entered into, though contrary to what is expressed in the instrument, in all cases where the consideration has been illegal; as for simony, usury, compounding of felony, &c. (e) And where fraud is imputed, the party who complains of the fraud may prove any circumstance, however contrary to the statement in the instrument, to shew the fraudulent nature of the transaction ; unless indeed where both parties are in pari delicto, and one is endeavouring to enforce the contract against the other; in which case both the parties shall be estopped from contradicting the express terms of the agreement. (f)
2. OF CONTRACTS OR AGREEMENTS WITH
A PENALTY OR STIPULATED DAMAGES.
A penalty is a forfeiture annexed to a contract or agreement, either for the better enforcing a prohibition, or by way of security for the doing of some collateral act agreed upon between the contracting parties.
Stipulated damages can only be where there is a clear unequivocal agreement, which stipulates for the payment of a certain sum, as a li
(a) Vide 2 Atk. 32.
(d) 8T.R.382. 384.
quidated satisfaction fixed and agreed upon by the parties, for the doing or not doing certain acts particularly expressed in the agreement.
It is said, in the case of Astley v. Weldon, (g) that where the payment of a smaller sum is secured by a larger, it must always be considered as a penalty, and not as liquidated damages. So, where articles contain covenants for the performance of several things, and then one large sum is stated at the end to be paid on breach of performance, that must be considered as a penalty. (h) So, where a doubt is stated whether the sum inserted be intended as a penalty or not, if a certain damage less than that sum is made payable upon the face of the same instrument, in case the act intended to be prohibited be done, that sum shall be construed to be a penalty. (2) But, where it is agreed that if a party do such a particular thing, such a sum shall be paid by him, there the sum stated may be treated as liquidated damages. (k) In one case (1) it was said by Lord Loughborough, “ That an agreement for liquidated damages can only be where there is an engagement for the performance of certain acts, the not doing of which would be an injury to one of the parties; or to guard against the performance of acts, which, if done, would also be injurious. In such cases an estimate of the damages may be made by a jury, or by a previous agreement between the parties, who may foresee the consequences of a breach of the engagement, and stipulate accordingly."
From these general observations, and an attentive consideration of the following cases, the reader will distinguish between those where a penalty is intended as a security for a collateral object, and those in which the contract itself has assessed the damages, which the party is absolutely to pay upon his doing or omitting to do what he has promised. Thus, in the case of Roy v. the Duke of Beaufort, (m) where the plaintiff was jointly bound with his son in a bond, in the penalty of 1001., that the son should not commit any trespass in the defendant's royalty, by shooting, hunting, fishing, &c., Lord Hardwicke said, “I am of opinion, that when these sort of bonds are given by way of stated damages between the parties, it is unreasonable to imagine they could only be intended as a bare security that the obligor should not offend for the future. Was this the case, in what respect was a gentleman in a better condition who has such a bond than he was before, if after he has obtained judgment at law, a court will give him no other satisfaction than the bare value of the price of the game that is killed ?" So, in the case of Rolfe v. Peterson, (n) it was determined, that where a lessee covenants that in case any part or parcel of the ancient meadow or pasture ground,
(8) Per Chambre J. 2 Bos. & Pul. 354.
(1) Orr v. Churchill, 1 H. BI. 232.
(n) 2 Bro.P.C. 436. See also Ponsonby V. Adams, 2 Bro.P.C. 431. S.P.