'It is always permitted to give extrinsic evidence to apply a written contract, and show what was the subject-matter to which it refers. When the stipulations in the contract are expressed in terms which are to be understood, as logicians say, not simpliciter, sed secundum quid, the extent and the obligation cast upon the party may vary greatly according to what the parol evidence shows the subjectmatter to be; but this does not contradict or vary the contract. For example, in a demise of a house with a covenant to keep it in tenantable repair, it is legitimate to inquire whether the house be an old one in St. Giles's or a new palace in Grosvenor-square, for the purpose of ascertaining whether the tenant has complied with his covenant; for that which would be repair in a house of the one class is not so when applied to a house of the other (see Payne v. Haine). 16 M. & W. 541. In these cases you legitimately inquire what is the subject-matter of the contract, and then the terms of the stipulation are to be understood, not simpliciter, but secundum quid. Now, according to the view already expressed, seaworthiness is a term relative to the nature of the adventure, it is to be understood, not simpliciter, Burges v. but secundum quid.' Wickham, 3 and Cases such as we have just described are cases of Latent latent ambiguity: they may be distinguished from patent patent amambiguities, where words are omitted, or contradict biguity. one another; in such cases explanatory evidence is not admissible. Where a bill of exchange was expressed in words to be drawn for two hundred pounds' but in figures for 245,' evidence was not admitted to show that the figures expressed the intention of the parties.1 Saunderson v. Piper, (c) The usage of a trade or of a locality may be proved, (c) Usage. and by such evidence a term may be annexed to a written. contract or a special meaning may be attached to some of its provisions. Parol evidence of a usage which adds a term to a written contract is admissible on the principle that — There is a presumption that in such transactions the parties did not mean to express in writing the whole of the contract by which they intended to be bound, but to contract with reference to those known usages.' 1 Ganson v. Madigan, supra. Usage. *By way of illustration of a commercial usage supra, p.263. we may take the warranty of seaworthiness which [*265] is held to be included in a contract of marine insurance, though not specially mentioned. For a local usage we may take the right of a tenant quitting his farm at Candlemas or Christmas to reap corn sown in the preceding autumn, a right which the custom of the Doc. country annexed to his lease, though the lease was under seal and contained no such term.1 Wiggles worth v. Dallison, 569. Brown v. 8 E. & B. Norden Steam Co. V. Smith v. Parol evidence of usage to explain phrases in contracts, whether commercial, agricultural, or otherwise subject to known customs, is admissible on the principle that — 'Words perfectly unambiguous in their ordinary meaning are used by the contractors in a different sense from that. In such cases the evidence neither adds to, nor qualifies, nor contradicts the written contract; it only ascertains it by expounding the language.' Thus in the case of a charter-party in which the days allowed for unloading the ship are to commence running 'on arrival' at the ship's port of discharge; if by custom arrival' is understood to mean arriving at a particular spot in the port, evidence may be given to show what is commonly understood to be the port. And so where the lessee of a rabbit warren covenanted that he would leave 10,000 rabbits on the warren, parol evidence was admitted that, by local custom, 1000 meant 1200.2 Closely connected with the principle that usage may explain phrases is the admissibility of skilled evidence to explain terms of art or technical phrases when used in 31 L. J. Ch. documents.3 Hills v. 457. Per Erle, C. But in order that a usage thus proved may enlarge or Dresser, explain a contract it must satisfy two requirements. It J., in Meyer 16 C. B., N. S. 660. 1 Cooper V. Kane, 19 Wend. (N. Y.) 386. 2 Soutier v. Kellerman, 18 Mo. 509, H. & W. 508. Cf. Sweeney v. Thomason, 9 Lea (Tenn.), 359; Walls v. Bailey, 49 N. Y. 464. 8 Welsh v. Huckestein, 152 Pa. St. 27. Conditions must be consistent with general rules of law, and it must not be inconsistent with the terms of the contract. For no usage can prevail against a rule of common law or under statute; and *it is open to parties to exclude the [*266] usage either by express terms or by framing their operates. contract so as to be repugnant to its operation.1 which usage (d) In the application of equitable remedies, the grant- (d) Proved ing or refusal of specific performance, the rectification of documents or their cancellation, extrinsic evidence is more freely admitted. mistake a ground for refusing specific perform ante, p. 140. Thus, though, as we have seen, a man is ordinarily ance. bound by the terms of an offer unequivocally expressed, and accepted, evidence has been admitted to show that the offer was made by inadvertence and was not accepted in good faith. The case of Webster v. Cecil is here in point. 30 Beav. 62. A offered to X several plots of land for a round sum; immediately after he had despatched his offer he discovered that by a mistake in adding up the prices of the plots he had offered his land for a lower total sum than he intended. He informed X of the mistake without delay, but not before X had concluded the contract by acceptance. In resisting specific performance he was permitted to prove the circumstances under which his offer had been made. Again, where a parol contract has been reduced to writing, or where a contract for a lease or sale of lands has been performed by the execution of a lease or conveyance, evidence may be admitted to show that a term of the contract is not the real agreement of the parties. And this a Nevertheless the usage of a society to compel its members to carry out contracts avoided by statute may constitute a risk against which the person employed to make such contracts is indemnified by his employer, where both know of the usage. 1 Walls v. Bailey, supra. 2 But parol evidence cannot be heard to enlarge a conveyance, though it may to diminish it. Glass v. Hulbert, 102 Mass. 24. Cf. Gillespie v. Moon, 2 Johns. Ch. (N. Y.) 585. supra, pp. 209, 210. Rectifica tion of documents. Earl Beau- L. R. 6 H. L. 8 Eq. 375. is done for two purposes and under two sets of circumstances. Where a contract has been reduced into writing, or a deed executed, in pursuance of a previous agreement, and the writing or deed, owing to mutual mistake, fails to express the intention of the parties, the Chancery Division will rectify the written instrument in accordance with their true intent. This may be done even though the parties can no longer be restored to the position which they occupied at the time when the contract was made. Should [*267] the original agreement be ambiguous in its terms, extrinsic, and, if necessary, parol evidence will be admitted to ascertain the true intent of the parties. But there must have been a genuine agreement (Mackenzie v. Coulson): its terms must have been expressed 4 D. & J.250. under mutual mistake (Fowler v. Fowler): and the oral evidence, if the only evidence, must be uncontradicted. See Pollock, 492-501. of mistake which is not mutual. Where mistake is not mutual, extrinsic evidence is only admitted in certain cases which appear to be regarded as having something of the character of fraud, and is Correction admitted for the purpose of offering to the party seeking to profit by the mistake an option of abiding by a corrected contract or having the contract annulled. Instances of such cases are Garrard v. Frankel, or Paget v. Marshall cited in the chapter on Mistake. They are cases in which ante, p. 141. the offeree knows that an offer is made to him in terms which convey more than the offeror means to convey, and endeavours by a prompt acceptance to take advantage of the mistake. 30 Beav. 445. 28 Ch.D.255. 36 & 37 Vict. c. 66. § 34. It would seem that, in such cases, these corrective powers are not used unless the parties can be placed in the same position as if the contract had not been made. The Judicature Act reserves to the Chancery Division of the High Court a jurisdiction in all causes for the rectification or setting aside or cancellation of deeds or other written instruments.' CHAPTER II. Rules relating to Construction. § 1. General rules. (1) General rules of construc tion. (1) Words derstood to be un WE have so far considered the mode in which the terms of a contract are ascertained: we have now to deal with the rules which govern the construction of those terms. (1) Words are to be understood in their plain and literal meaning. This rule may lead to consequences which the parties did not contemplate, but it is followed, subject always to admissible evidence being adduced of a meaning. usage varying the usual meaning of the words. in their plain Mallan v. May, 13 M. (2) An agreement ought to receive that construction & W. 517. which will best effectuate the intention of the parties to be collected from the whole of the agreement;' 'Greater regard is to be had to the clear intention of the parties than to any particular words which they may have used in the B. 866. expression of their intent." Ford v. Beech, to inference of from the whole Rules (1) and (2) might seem to be in conflict, but (2)Subject they come substantially to this;- men will be taken to have meant precisely what they have said, unless, from intention the whole tenor of the instrument, a definite meaning can be collected which gives a broader interpretation to spe- document. cific words than their literal meaning would bear. The courts will not make an agreement for the parties, but will ascertain what their agreement was, if not by its general purport, then by the literal meaning of its words. Sub 1 Reed v. Insurance Co., 95 U. S. 23, H. & W. 511; Roberts v. Bonaparte, 73 Md. 191; Detroit Stove Works v. Perry, 7 Fed. Cas. 555. |