Varnum v. Thruston

Tuck, J., delivered the opinion of this court- The only subject before us on this appeal, is, the construction of the agreement of January 24th, 1853. The rules of interpretation asserted on the part of the appellee, cannot be questioned; but they are all subordinate tothe leading principle, that the intention of the parties, to becollected from the entire instrument, must prevail, unless inconsistent with some rule of law. And the maxim, that thewords of a writing shall be taken most strongly against the-party employing them, “applies only to-cases of ambiguity in-the words, or where the exposition is requisite to give them-lawful effect. It is a rule of strictness and rigor, and not to-be resorted to but where other rules of exposition fail- The497 modem and more reasonable practice is, to give to tile language its just, sense, and to search for the precise meaning, find one requisite to give duo and fair effect to the contract, Without adopting either the rule of a rigid or of an indulgent construction.” 2 Kent, 556. Carroll vs. Granite Co., 11 Md. Rep., 411. Applying these cardinal rules to the present instrument, we have not been able to reach the conclusion to which the able arguments of the appellee’s counsel sought to direct us. We must regard the whole agreement, the nature of the transaction in hand, its objects and purposes, and the means and manner of accomplishing them, as disclosed by the instrument itself, and looking to these, we cannot doubt that the parlies designed that the right of the appellee should be contingent, and not fixed aud certain, to the degree now contended for on his behalf. The agreement and schedule show that Cowles had speculated in coal lands, and made large purchases, which he transferred to Varnum and Aspinwall, who were to provide funds to meet his engagements. The third article expressly provides that they should hold the lands “"subject to their claim, to be reimbursed the cost thereof, and all expenses in relation thereto,” for the benefit of themselves and Cowles, as thereafter provided. A joint stock company was to be created, and these lands converted into stock, to be issued to the appellants, who were to deal with the shares as provided in the fifth, article, on a portion of which the appellee mainly relies, in support of bis claim to priority. Now the first question that naturally arises here is, whether it was designed that Varnum and Aspinwall should be in any worse condition after the formation of the company than before? that is to say, were they, or not, to hold the stock as they had held the lands, its a security for their outlay? We think that only one answer san be made to this inquiry, and that is, that it was the intention that the stock should stand as a substituted security in place of the land, and that the fifth article must be deemed, as far as the appellants’ reimbursement was contemplated by [498] the1 parties, as intended to accomplish that end. Considering: the merits of the case, we can see no possible objection to this view of the agreement, while considej-alions of justice demand it. The question then arises, is there any thing in the fifth or any other article, by which they have stripped themselves of the security provided by the third? If it were not for the words “one-twentieth part of the whole capital stock,” we suppose that no such pretension could be advanced. Bui that clause dees not stand alone. It appears to us to be impossible to separate it from the context, and give it the meaning contended for, without defeating- the manifest object of" the parties as to other ends contemplated at the time of making the agreement. It is said that these words created a positive and fixed right in the appellee to that portion of the stock, without reference to the result of sales-, or other contingency. We may here remark, that if the parties- had so* intended, it was easy to have placed the matter beyond' doubt. This clause is- the last of the fifth article, by which certain-duties had been imposed on the appellants; which it might be impossible for them to discharge, if thé appellee^ construction were to- prevail. We think the order of sentences- and the phraseology imply something more than a succession of events; for the transfer to the appellee was to be made after certain other things were to have been d'one. Let us see-what these requirements are. The appellants- were, “out of the stock so issued to them, to sell sufficient to reimburse them the cost of the land,”' &c. Was not the whole stock placed at their disposal, if it required all? “Sufficient” means enough, what may be necessary to accomplish an object;- and how any other effect can be ascribed- to- the word, as here employed, we do not perceive, unless we adopt the suggestion-made at the bar, that it must be intended that the parties-meant sufficient of the disposable stock. But here we would-be met by the difficulty, that if the agreement, as it stands, means one thing, we cannot, by implication, interpolate a Word which would give it a- different effect. The most reasonable idea, in case of any doubt upon the words, would be, that those who had projected, the enterprise, and advanced [499] their means in furtherance of the common object, should, out of the property, be indemnified against loss, and not be postponed for the benefit, of another, who, as far as the paper shows any thing on the subject, had furnished no consideration for the stipulation in his favor. By the interpretation of the appellee, he would be preferred not only to Yarnum and Aspinwall, as to their outlay, but also to Cowles as to his $15,000, “expended in obtaining the contracts, and in and about the lands,” which is made a charge on the lands by the sixth article, as the claim of Yarnum and Aspinwall had been by the third. But suppose we confine ourselves to the last clause of the fifth article, on which reliance is placed by the appellee, we must take it all together, and then the inquiry is, what effect are we to give to the words “after” and “next?” It is said, that these indicate only the order of time in which certain things were to occur. .If this were so, it might happen that the appellee would never enjoy what he insists is a fixed and ascertained amount of stock, because the transfer was to be made after the sales and payment aforesaid,- that is, sales of stock sufficient for all the purposes set forth in the preceding clause of the article, and until these ends were gratified, we do not perceive how Yarnum and Aspinwall could be called on to make the transfer. The words “one-twentieth of the whole of said stock,” are certainly plain enough, and sufficiently indicate the amount the appellee was to receive, but, taking the whole of the clause, and giving to every word the meaning which we think they may bear consistently with the objects of the transaction and the mode of their accomplishment, as defined in other parts, the most reasonable interpretation is, that this expression should secure to the appellee the amount of stock mentioned, in preference to the division between the other parties, but not in priority over the claim that Yarnum and Aspinwall might have for their outlay. This we take to be in harmony with the words of the entire instrument, and, at the same time, quite consistent with the equities of the transaction. For, although it may be assumed that the appellee, by force of the clause in his favor, had an [500] interest which a court of equity would- enforce, we do not suppose it can be regarded as of a higher dignity than that of the parties by whom the enterprise was commenced, and whose means were embarked in its prosecution, and for whose reimbursement express provision was made in the third and sixth articles. These are as plain in their words and meaning, when considered alone, as the clause relied on by the appellee, and would seem to address themselves to our acceptance as well; and both parties relying on separate clauses, the only safe guide is to consider them all as comprising one instrument, to be interpreted by the intent of the parties, to be gathered from the whole. It is true that instruments cannot be construed by what parties may have done under them, 1 H. & G. 74; but we think that courts may regard the nature of the transaction, and probable results; that is, such as maybe supposed to have entered into the minds of the parties at the time the agreement was made; for justice seems to require that both parties should be bound by a consent of the mind to the same thing in the same sense. We suppose that all the parties concerned in ibis speculation — as speculators generally do— looked to large profits; none apprehended any loss; and in this confidence they did not provide in terms for contrary results. But, if loss had been apprehended, and they had purposed to provide for such contingency, can any one believe •that Cowles, and Yarnum and Aspinwall, would have consented to purchase and pay for the lands, bear all the losses, and save harmless the only person concerned who does not appear to have advanced any thing; we should rather say, allow him only to make a profit of the business? The examples cited on the question of construction, from cases where wills and testaments were the subjects of consideration, we think, do not apply here. This case, and the like, should be governed by the principles recognized in deeds, and there are many in this court where priorities have been allowed, upon words and phrases, to which the rules observed in the construction of wills would have applied as reasonably as to the present agreement. [501] (Decided Oct. 29th, 1861.) Willi these views of the contract, the decree of (he court below must be reversed, bat. a final decree will not be passed at this time, inasmuch as there is a cross-appeal pending. The question of costs will be disposed of at the hearing of that appeal. Decree reversed.