of that market. It is for the jury to determine whether a usage exists or not, and whether the parties contract with reference to it or not.1 10

A valid usage must possess the following characteristics: (a) It must be general and uniform so as fairly to give rise to the presumption that the parties were acquainted with it, and intended to contract with reference to it.11 In such case it is not necessary to prove that it was known to the other party.12 But it must be proved that the parties contracted with reference to a partial and local usage if they are to be bound by it.13

(b) It must not be repugnant to, or inconsistent with, the terms of the contract.14 If it appear that the parties did not mean to be governed by the usage no evidence respecting it can be received. "It can only be admitted either as an aid to interpretation when the meaning of the terms of the contract is equivocal or obscure, or to add some incident consistent with the terms of the contract, but about which the parties are silent."15

(c) The usage must not be in contravention of the general rules of law, or of statute.16

9 McCullough v. Hellweg, 66 Md. 269; Kraft v. Fancher, 44 Md. 216. 10 Burroughs v. Langley, 10 Md. 248. But when a usage is established as being general, it is not necessary to show affirmatively that it was known to the other party. Lyon v. George, 44 Md. 295; Barker v. Borzone, 48 Md. 474.

11 Duling v. P., W. & B. R. Co., 66 Md. 126; Citizens' Bank v. Grafflin, 31 Md. 507.

12 Blake v. Stump, 73 Md. 160; Given v. Charron, 15 Md. 502.

13 Patterson v. Crowther, 70 Md. 124.

14 DeWitt v. Berry, 134 U'. S. 306; Gilbert v. McGinnis, 114 Ill. 28; Balto. Baseball Club v. Pickett, 78 Md. 375; German Bank v. Renshaw, 78 Md. 475; Gibney v. Curtis, 61 Md. 192.

15 Busby v. Ins. Co., 40 Md. 580.

16 First Nat. Bank v. Taliafero, 72 Md. 164; Susq. Fer. Co. v. White, 66 Md. 444. A usage may be made invalid by a subsequent statute. Frazier v. Warfield, 13 Md. 279. And a statute cannot in general be repealed by a subsequent contradictory usage. Cutler v. Howe, 122 Mass. 541; Colgate v. Penn. Co., 102 N. Y. 120; Delaplaine v. Haxall, 15 Grattan, 459; Godcharles v. Wegeman, 113 Pa. 431. But it seems that sometimes the Courts will recognize that a

(d) It must be reasonable.17

4. Parol evidence is admissible to affect a written contract in the application by equity of its jurisdiction in cases of mistake or fraud.18

statute is obsolete. Schaferman v. O'Brien, 28 Md. 574. So it is said in the Digest, 1, 3, 32 § 1, Rectissime etiam illud receptum est ut leges non solum suffragio legislatoris sed etiam tacito consensu omnium per desuetudinem abrogentur. And a general law may be controlled by a special local usage varying from it. Bank of Columbia v. Fitzhugh, 1 H. & G. 250.

17 Rosenstock v. Tormey, 32 Md. 170; Curtis v. Gibney, 59 Md. 155; Oelrichs v. Ford, 21 Md. 491.

18 Wood v. Patterson, 4 Md. Ch. 335.

CHAPTER II

THE CONSTRUCTION OF CONTRACTS

§ 127. In General. The true principles of construction may be well illustrated by certain analogies from the civil law. In that system contracts are divided into those that are stricti juris and those that are bonae fidei. The former are interpreted literally, and the parties are bound only for the exact performance mentioned. In contracts bonae fidei. on the other hand, the construction is liberal, and the parties are bound to perform, not necessarily what a literal construction of the contract might seem to require, but “rather whatever can be fairly and reasonably required according to the circumstances of the case,-which may be either more or less than was actually promised."1 In these negotia bonae fidei certain liabilities are imposed upon the parties. whether expressly promised or not, because they must perform what, under the particular circumstances of the case. good faith requires them to perform.

This doctrine pervades our law also, although this particular distinction is not expressly made. In the construction of these contracts, the Court merely discovers and enforces what would have been agreed upon by the parties, if their attention had been called to the point, and if they had been acting in good faith and with full knowledge. The unexpressed obligations in these instances, which are implied by law, are these which are inherent in the transaction according to its true nature, and may be regarded as the unexpressed intention of the parties. It is not now necessary, in each case as it arises, to discover anew the whole unexpressed intention, because we inherit from former ages a set of rules embodying the result of this investigation,―rules whose justice and excellence are vindicated by the experience

1 Sohm, Institutes, § 63; English translation, p. 286.

of daily life. This principle explains the origin and reason of these rules. The circumstance that good faith in this sense has been required produces this inestimable consequencethat the great majority of the decisions of the Courts are ethically justified in the opinion of all enlightened persons who are acquainted with the facts.

It is generally said that contracts will be construed according to the intention of the parties. But, as above shown, this means not only what they did actually intend but also what, according to the essential nature of the particular transaction, the law considers that they should have intended. No intention can, however, be read into a contract unless it is thus a necessary legal implication. In each contract, there is a general law applicable to all similar cases. This is the unexpressed intention as above explained. There is also to be discovered the particular intention of the parties, which constitutes the individuality of the case. This must be expressed, for the Court will not make a contract for the parties by implying any intention not common to all such cases. When, however, a particular kind of contract is made. it is presumed that the parties intended to embody all the legal consequences of the act, whether they knew of them or not, unless it can be seen from the language they used that they intended to exclude some of them.2

The greater number of contracts are bonae fidei, and their construction is, therefore, according to the above mentioned principles, a liberal one. Thus a contract of sale is not satisfied by the mere delivery of the thing sold. If the article is taken from the buyer by a person having a superior title, the seller is liable in damages, because under the circumstances good faith requires him to perform more than was actually promised. This principle is stated in our law

2 Sometimes the legal consequences may be thus excluded and sometimes they cannot. Parties may agree, for instance, that a debt shall not bear interest after maturity, but if they stipulate that upon failure to pay a debt of $100 at maturity the sum of $500 shall be due, that is an agreement for a penalty and will not be enforced. 3 In the modern civil law, all contracts are bonae fidei.

under the form of a rule that in the sale of a chattel there is an implied warranty of title. The same observation is applicable to the other warranties implied in the contract of sale. The parties in all contracts of bailment are legally held to the exercise of the degree of care required by bona fides under the circumstances, although not stipulated for. Certain contracts, such as those of insurance or of composition with creditors, are designated as being ubberimae fidei, and this principle is applied to the formation of the contract as well as its construction. In contracts of agency, of partnership and for service, the liabilities of the parties are not to be ascertained merely from a consideration of the language used. The rules established in the case of the rights and liabilities of the parties in the case of an incomplete or inexact performance of a building contract also illustrate this doctrine of good faith, and are not dependent upon the language used in the contract. So, if an agent engages in a business which conflicts with that of his principal, he may be dismissed, although the contract imposes no obligation upon him not to do so. On the other hand, a party is sometimes only liable in law to perform less, instead of more. than he expressly promised. Thus a promise to pay $1,000 in case the promisor fails to perform any stipulation in a contract containing promises of various degrees of importance is unenforceable when the other party has not been damnified by the breach to the extent of $1,000. Justice demands that the party in default should only be required to make good to the other party the actual amount of his loss. This principle is stated under the form of a rule that the Courtwill not enforce penalities for the breach of a contract."

5

But there are certain contracts which may be regarded as being stricti juris because strictly construed, in which there is no obligation to perform more or right to perform less than a literal and logical interpretation of the exact language of the promise demands. Thus the liability of guarantors and

4 See ante, Part ii, ch. 7.

5 Adams Express Co. v. Trego, 35 Md. 47.

See post, Part v, ch. 3. "Contracts with Penal Clauses."