This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
To have two or more writings construed together it is not necessary that one of them should refer to the other in express terms. If two or more writings are executed at the same time, between the same parties and concerning the same subject-matter, they may be construed together as a part of the same contract,1 at least in the absence of evidence to the contrary.2 If an instrument is a condition precedent to the contract which it is sought to enforce, the two must be construed together.3 Thus a note and the contract under which it was made,4 especially if the note refers to the contract;5 a land contract and a deed;6 a note and the mortgage by which such note is secured;7 a deed, mortgage and note;8 a building and loan association note, mortgage and contract;9 a deed and a chattel mortgage;10 a contract and a chattel mortgage;11 an agency contract with an insurance company and a mortgage to the insurance company which are part of the transaction;12 a land contract and a bond;13 a deed and a lease;14 a lease and a contract;15 a will, deed and contract;16 different written contracts and checks;17 and a deed and an acknowledgment of trust by the grantee,18 may in each case be construed together. If a note provides that on default the entire sum is to become due and the mortgage by which the note is secured provides that on default the mortgagee shall have the option to cause the entire sum to become due, such instruments are to be construed together,19 and they will be regarded as giving the option to the mortgagee to declare such sum due on default or not at his option.20 A series of letters or letters and telegrams which make up a contract are to be construed together.21 A term inserted in one letter need not be repeated in subsequent letters on the same subject, not inconsistent with such term in order to preserve its force.22 A building contract and the drawings and specifications for the building are to be regarded as parts of the entire contract,23 and the fact that a provision found in one is omitted from the other does not indicate any inconsistency, since omissions in any of such instruments may be supplemented by the remaining instruments.24 While a note may be construed in conftection with a contemporaneous contract, such construction can not be invoked to modify its legal effect if it is in the hands of a bona fide holder for value.25 If the two contracts are not executed at the same time, but refer to the same subject-matter, and on their face show that they were executed each as a means of carrying out the same intent as the other, they may be construed together.26 The rule that contracts which are entered into as a part of the same transaction are to be construed together is merely a rule of construction and it does not otherwise affect the character of either contract.27 While a note and mortgage are to be construed together, a provision in the mortgage for the payment of attorneys' fees is not to be regarded as a part of the note for the purpose of destroying the negotiability of the note.28 Thus a note and the contract, executed a few days before the note, in consideration of which it was executed;29 a transfer of stock and the contract under which it was transferred;30 and a trust deed and a deed thereunder; 31 and the record of a public board and the contract which is authorized by such record,32 are to be construed together. If the original contract provides for a specified rate of interest and the note is so drawn as to bear a lower rate, the subsequent promise of the maker to pay the higher rate of interest is to be regarded as a part of the entire transaction.33 Even if two writings are executed on different dates and between different parties, they may from their subject-matter be so connected that even without express reference the later contract is to be so construed as to be read in connection with the earlier.34 Thus the contract of a sub-contractor with the chief contractor must be construed with that between the chief contractor and the owner if the contract between the subcontractor and the chief contractor shows such intention.35 The terms of the contract between the principal contractor and the owner are not to be regarded as a part of the contract between the principal contractor and the subcontractor unless there is an express reference thereto.36 If the subcontractor knows the time of performance which is fixed in the principal contract and no provision is made in the subcontract as to the time of performance, it will be assumed that the subcontractor is to perform in a reasonable time with reference to the performance of the principal contract.37 A building contract is to be regarded as incorporated in the bond which is given to secure performance thereof,38 and the surety has a right to insist upon a performance of such contract on the part of the property owner as a condition precedent to his liability.39 On the other hand, the bond is not to be regarded as a part of the contract so as to limit the liability of the principal contractor to the property owner.40 A provision in a building contract which in legal effect imposes absolute liability upon the contractor is not modified by a provision in the bond to the effect that neither the principal nor the surety is to be liable for damages resulting from an act of God.41 A contract of sale and an authority to sell must be construed together,42 and a prospectus and a land contract must be construed together.43 A contract and a deed which is given in performance of such contract may be construed together, although they are executed several months apart.44 Warrants which are issued by a public board in payment for work, labor and materials under a contract may be considered in connection with such contract in order to ascertain its meaning.45 A contract between A and B, by which A agrees to purchase automobiles and B agrees to appoint A as B's sales agent, is to be construed in connection with a bill of sale given as a part of the same transaction.46