Fry v. Hawley

DOUGLAS, Justice, delivered the opinion of the Court. This case has been fully argued by the counsel /or the — 275 — respective parties, and the questions presented for our consideration are, what interest the complainant is entitled to in the said steamboat, and what share of her nett profits he ought to receive. It is admitted that every contract, deriving its force from the mutual assent of the parties, is to be interpreted according to the intention of the parties, so far as it is legal, and mutually understood. Chitty on Contracts, pages 148, 149, 1st edition, sections 228, 231, and that exposition is to be upon the whole contract, and not upon disjointed parts taken separately. Page 167, section 252. For the complainant, it is contended that, by virtue of this agreement between Hawley and himself, he is entitled to an equal share in the boat with Hawley, and to an equal participation in the profits or earnings, and that the agreement is susceptible of no other interpretation. That Hawley’s agreement with Fry was made with special reference to the agreement or contract he had made with Allen, and to understand the meaning of the terms, “ an interest with himself,” it is only necessary to ascertain what was the interest of Hawley in the joint concern of Allen and Plawley, and what proportion the contribution of Fry bears to it. That the evidence discloses, and that it js also conceded, that Hawley was entitled to a moiety of the boat, by reason of the contribution of one-half the stipulated capital, say $3,000, as between himself and Allen; and Fry’s contribution being $1,500 or one half thereof, makes the extent of his interest under Hawley just one-half — in other words, equal with Hawley’s, and that this is confirmed by the subsequent stipulation, that “ all losses are to be equally borne.” That Hawley’s interpretation, that it is in the proportion which the $1,500 bears to the whole cost of the boat, is a strained one, and that a Court of Equity will not give a strained construction to create a societas leonina. The last proposition we deem a sound one. But we understood the — 276 — position of the defendant’s counsel to be, that Hawley was entitled to a moiety of the boat, on account of his contribution of #3,000, and of his having given to said Henry Allen authority to use his name,- to procure a credit to any amount beyond the sum of #6,000, that might be necessary to procure a steamboat suited to the accomplishment of the objects they had in view, viz: the carrying of the mail, and the transportation of merchandize, conveyance of passengers, &c.; he (Hawley) thus making himself equally liable with said Allen for any debt which the latter might contract in effecting that object. And this we consider a correct view of that matter, and we are unable to perceive why Hawley’s interpretation of his' contract with Fry is. a strained one. To interpret the contract, the whole must be taken together. “Faithful interpretation implies that words, or assemblages of words, be taken in that sense which we honestly believe that their utterer attached to them.” Lieber’s Hermeneutics, 99. “ Since our object is to discover the sense of the words before us, we must endeavor to arrive at it as much as possible from the words themselves.” Ibid, 113. The whole of the agreement is to be considered — 'the construction is upon the entire deed or agreement, not merely upon disjointed and particular parts of it. The whole context shall be considered in endeavors to collect the intention of the parties, although the immediate object of inquiry be the meaning of an isolated clause.— Chitty on Contracts, 6th American edition, 83. Now, what are the words we are called upon to interpret ? — “ All losses to be equally borne. What is the instrument we are called upon to construe ? — The receipt of Hawley to Fry, viz : “ Received of Daniel Fry fifteen hundred dollars, to be invested in a steamboat, for the purpose of carrying the mail between Apalachicola and Chattahoochee, for the term of four years, commencing July 1, 1847; Nelson Hawley being jointly interested with Captain Henry Allen in the above pamed contract, binds himself to give to said Fry aji — 277 — interest with himself to the extent of the amount placed in his hands, and in proportion to that amount, he is to share in the profits accruing from said contract. He further binds himself to consult and advise with said Fry in all matters of importance in regard to said joint interest.” What joint interest? — the joint interest of Hawley and Allen. Now, the contract here spoken of, is the contract for carrying the mail, and the joint interest mentioned, is the interest of Hawley and Allen in that contract. No reference is here made to the agreement between Allen and Hawley about the purchase of the steamboat. The object in view, viz; the carrying out of that contract to convey the mail, appears from the fact that the $1,500 advanced'by the complainant, was to be invested in a steamboat by Captain Henry Allen for that purpose; and Nelson Hawley being jointly interested with Captain Henry Allen in that contract, binds himself to give the said Fry an interest with himself to the extent of the amount placed in his hands, and in proportion to that amount, he is to share in the profits accruing from said contract. Why all this circumlocution, if it were intended that Fry should have an equal interest both in the steamboat and in the profits accruing from said contract ? Why did not Hawley say, being jointly interested with Captain Henry Allen in the above mentioned contract, I bind myself to give the said Fry an equal interest with myself in said contract, and an equal share of the profits accruing therefrom ? It would have taken fewer words, and been clear of all doubt — no room would have been left for construction, and in the agreement which he had on that very day executed with Captain Allen, he had a precedent for so drawing it. If the instrument had stopped here, no question, we think, would have been raised about its construction — the whole difficulty then rests upon the words, “ all losses to be equally borne.” But the construction must be reasonable — it must also be as near the painds and apparent intents of the parties as the rules of law — 278 — will admit. 2d Blackstone’s Commentaries, 379; and it is essential to consider the subject-matter of the agreement, in affixing a meaning to the terms used therein. Chitty on Contracts, 6th edition, 74. The subject-matter here was a portion of this steamboat and of the contract mentioned, and the question is, the extent of those interests intended to be conveyed. If these words m ust be understood to mean that Fry must bear the same amount of any loss as Hawley, and that, consequently, he (Fry) shall have the same interest in the steamboat and in the profits of the contract as Hawley, then it results that Fry, for the sum of $1,500, is to have as large a share of both as Hawley, who has paid $6,000. We do not lose sight of the fact, that some five or six thousand dollars balance due on the boat, was paid out of the profits accruing on the contract, or that the boat was mortgaged to secure that debt; but it was the debt of Allen and Hawley ; and if they had suffered it to be sold to pay their debt, Hawley would have been liable to Fry for his $1,500, unless, indeed, they had ’procured another boat, and Hawley had given him an interest in it according to his contract, which he would have had a right to do ; for the agreement between Hawley and Fry did not specify that the $1,500 should be invested in any particular boat — such a result would certainly be a very onerous and unequal one, and comes pretty well up to the idea of a societas leonina. But we see no good reason for so interpreting this contract. From the phraseology of the whole instrument, and the reason and justice of the case, it seems to us quite clear, that the intent of the parties was that the words, “ all losses to be equally borne,” was that each should bear any loss that might occur, in proportion to his interest. Equality is said to be equity, which judges according to what is good and equal, and we do not perceive that construing the words, “ all losses shall be equally borne,” to mean that they shall be borne in proportions equal to their respective interests, does any violence to the English lan — 279 — guage. By reference to the word equal in Webster’s Dictionary, folio edition, pages 471 and 475, we find it, amongst many other definitions, stated, “ Equal,” “being in just proportion,” “to make equivalent to,” “to recompense fully,” “to answer in full proportion” We are satisfied, therefore, that the words ought to be interpreted and construed to mean that Fry shall answer to Hawley in full proportion to his interest. From a just and proper reading of the receipt itself, therefore, without any “ resort to the aid of the light of surrounding circumstances,” it seems to us that the construction placed upon this instrument by the Conrt below is the correct one. But let us take a view of those circumstances and see whether they are calculated to sustain or change this view of the subject. One fact deemed of some moment is, that the complainant is an engineer, and it was a matter of considerable importance to him to obtain constant employment as such, at good wages. This seems to have been one object which it appears he accomplished by it; for, although no reference is made in the receipt given by Hawley to Fry, for this $1,500, to the agreement between Hawley and Allen respecting the purchase of the steamboat, yet it clearly appears by reference to the bill of complaint in this case that the complainant was fully aware of it, for he commences with the charge that “ Nelson Hawley informed him that, in connection with Henry Allen, he had obtained a contract to carry the United States mail from the port of Apalachicola to a point on the Apalachicola river, known as Chattahoochee ; that said contract was to continue four years, at a yearly stipend of $2,600 ; that said Hawley also informed him (Fry) that he was desirous of purchasing a boat to carry said mail and perform said contract, and that it would require about $6,000 to purchase a suitable boat for the purpose aforesaid ; that he was to furnish $3,000 and said Allen to furnish the remaining $3,000, and each was to own one moiety in the said contract and the saicE — 280 — boat.” And on looking into this contract we find one of its stipulations to be that “ Daniel Fry it to be employed in the capacity of engineer, (to furnish his second,) at a salary of $135 per month, so long as he faithfully discharges his duties in that capacity, to the satisfaction of the master of the boat;” and the fact which the evidence discloses that he has been thus employed, with his brother as his second, ever ’Since the boat has been running on the Apalachicola river, at the wages mentioned, leads to the irresistible conclusion that this stipulation was inserted by the parties, after an understanding with him on the subject. Now, it is very extraordinary that the complainant, with the intimate knowledge he possessed of the agreement between Allen and Hawley, in making his agreement with Hawley, did not also take care to have an express stipulation inserted by Hawley in the receipt given by him to complainant, that he should have one moiety or half of Hawley’s half or moiety of said boat and the profits accruing from said contract, if such were the intention of the parties. Indeed, if the transaction was to have been, as is contended, of such a nature ah' to make it a quasi partnership between the three, Allen, Hawley and Fry, so as to make Fry liable beyond the sum of $1,500 advanced by him, it is not easy to account for the fact that he did not at once enter into the agreement with Allen and Hawley, or why they did not require him to do ■so, and thus make him equally liable with Hawley for any ‘outlay beyond the $6,000. There is no evidence that Fry ‘ever set up a claim against Hawley for one-fourth of the boat and profits, &c., until the commencement of this suit, and such a claim is inconsistent with the acts of the complainant himself, who, as appears by the answer of the defendant, Hawley, responsive to the bill, and by the testimony in the case, offered to take one-sixth interest in the said boat — an offer quite inconsistent with the claim of a right to one-fourth. The Court assents to the proposition of the •counsel for Mr. Hawley that “ to entitle the complainant — 281 — Fry to a specific performance of the agreement which he insists on, it must appear that the defendant, Hawley, had a remedy against him to compel performance of his (Fry’s) part of such contract!” It seems to be very generally and very properly laid down in the books that a court of equity will never decree a specific performance where the remedy is not mutual, or oue party only is bound by the agreement, Parkhurst v. Van Cortlandt, 1 Johnson’s Chancery Reports, 282, and authorities there cited. 2 Story’s Equity, section 723. Fry had advanced $1,500 ; the boat has cost $15,000; one-fourth of the cost is $3,750 — where was Hawley’s remedy to compel Fry to pay the difference, $2,250 ? It is contended on behalf of the complainant that the agreement on the face of it and by equitable interpretation is both •certain and fair ; that nothing is asked for by him which is either inequitable or unjust; that so far as the principle of mutuality is involved, the agreement on the part of the complainant is executed ; that he paid the amount of his contribution at the time of entering into the contract. If this be so, if the contract on the complainant’s part was executed ■by the payment of the sum of $1,500 at the time he entered into the contract, and we think it was, then surely there is no mutuality. An agreement must depend on the circumstances at the ■time, and cannot be made better or worse by subsequent facts. Morris v. Burroughs, 1 Atkyns, 404. Subsequent acts ■cannot be given in evidence to explain any ambiguity in a written contract. Chitty on Contracts, 106. 1 Atkyns, 404, 605. The debt contracted by Allen in building the boat was •in no wise a liability of Fry. Plawley and Allen alone were 'bound for that debt. Fry was not liable for it. So far as we are able to discover, from any thing which the record ■discloses, he was not liable over to Hawley. Fry, by the payment of his $1,500 into Hawley’s hands, obtained a permanent situation as engineer, at $135 per month, and an interest in the steamboat and the profits, &c., in proportion — 282 — to the amount he advanced. These were strong and, no doubt, the controlling inducements to make this advance, [and in construing a contract the court will look to the motives that led to it, and the object intended to be effected by it, Davis et al. v. Barney, 2 Gill & Johnson, 382,] and we do not deem a contract very onerous, by which a man gets $1,273 in a little more than one year on an investment of $1,500, and a permanent situation besides, as engineer, at $135 per month. Upon the whole, therefore, we see no reason to disturb the decree of the Court below, and it is consequently in all things affirmed. Per totam Curiam.