§ 771. Inasmuch as every contract derives its force from the mutual assent of the parties thereto, to certain terms, it becomes necessary, not only to interpret those terms, in order to ascertain the intention of the parties in entering into the agreement, but also so to construe them as to give a legal operation to such intention. The collection of such intention, by inferences from stated terms, or from actual circumstances, or both, is the office of interpretation. The adjustment of such intention to paramount law is the office of construction.1
§ 772. Language is not only imperfect, and susceptible of various interpretations, but is also so liable to the careless misuse or ignorant misapplication of terms, that some rules of interpretation and construction seem to be absolutely necessary, in order to render agreements either intelligible or consonant with the intentions of the parties. An agreement to do a single definite act, upon a certain consideration, is simple, and easily interpreted. But where a general object is to be attained by means of a multitude of different stipulations dependent upon future contingencies, it must evidently be matter of great difficulty, and indeed, almost of impossibility, to anticipate all events and circumstances materially affecting the contract. In such cases, the contract in itself, however well drawn, if unexplained by inferences drawn from attendant circumstances, or from the general tenor of the instrument, would often be unintelligible or inoperative. The object, therefore, of interpretation and construction, is so to expound the contract as to render it legal and valid, as well as operative in effecting the purpose and object which it was designed to accomplish.
1 See Lieber's Legal Hermeneutics.
§ 773. The general rules of interpretation and construction are the same both in law and in equity;1 and are equally applicable to specialties and simple contracts.2 Courts of equity have, however, assumed larger powers than courts of law, in the application of these rules, by which they are enabled to reach cases, which, however equitable, could not be enforced in a court of law. Wherever, therefore, a precise and strict conformity to the grammatical meaning of the terms of a contract would be impossible, they will be so modified as to render them as nearly coincident as possible with the actual and evident intent of the parties. Thus, a strict compliance with the terms of a contract is generally necessary to entitle either party to enforce it against the other at law; but if the non-compliance do not affect the essence of the contract; as if the contract be broken in respect of time or mode of its performance, when neither time nor mode of performance were essential considerations, a court of equity will grant relief, if the circumstances under which relief is claimed be equitable.3
§ 774. The first rule of exposition, which originates and governs every other rule, is, that the contract shall be so interpreted as to give effect to the intention of the parties, as far as it is legal, and mutually understood.4 Verba intentioni, non e contra, debent inservire. In the construction of a contract, reference must be had to the intention of the parties, as ascertained from their situation, and the whole scope of the contract.1 Whenever such intent can be distinctly ascertained from the language used,2 it will prevail, not only In cases where it is not fully and clearly expressed, but also even where it contradicts particular terms of the agreement. The object of the law, in laying down rules of exposition, is to discover the meaning of the parties, and not to impose it, and the expression is, therefore, wholly subservient to the manifest intention.3 Although, therefore, descriptive words be used in a written instrument, which are, when taken with reference to the existing facts, repugnant or inconsistent with each other, yet, if the intent of the parties be clearly manifested thereby, the misdescription will not vitiate the instrument.4 Thus, where the condition of a bond of £2000 was to "render a fair, just, and perfect account, in writing, of all sums received; " it was held to be broken by a neglect on the part of the obligor to pay over such sums; for Lord Mansfield said, it was clearly the intention of the parties that the money should be paid; and Buller, J., added, that it could not be meant, that so large a penalty should be taken merely to enforce the making out of a paper of items and figures.5 So, where the owners of several parcels of land.
1 3 Black. Comm. 431; Doe v. Laming, 2 Burr. 1108; 1 Fonbl. Eq. 5th ed. 149, note h; Eaton v. Lyon, 3 Ves. 692; Ball v. Storie, 1 Sim. & Stu. 210.
2 Seddon v. Senate, 13 East, 74, per Ld. Ellenborough; Hewet v. Painter, 1 Bulst. 174, 175; Kane v. Hood, 13 Pick. 281; Robertson v. French, 4 East, 130.
3 2 Story, Eq. Jur. § 736, 747, 771, 776, 777, 779; Hipwell v. Knight, 1 Younge & Coll. 415; Doloret v. Rothschild, 1 Sim. & Stu. 590. See White v. Mann, 26 Me. 361.
4 Courts, in the construction of contracts, look to the language employed, the subject-matter, and the surrounding circumstances; and may avail themselves of the same light which the parties enjoyed when the contract was executed. They are, accordingly, entitled to place themselves in the same situation as the parties who made the contract, in order that they may view the circumstances as those parties viewed them, and so judge of the meaning of the words, and of the correct application of the language to the things described. Nash v. Towne, 5 Wall. 689 (1866).
1 Ricker v. Fairbanks, 40 Me. 43 (1855). 2 See Cooke v. Barr, 39 Conn. 296 (1872).
3 Throckmerton v. Tracy, Plowd. 160; Shep. Touch. 86; Simond v. Boy-dell, 1 Doug. 271; Aguilar v. Rodgers, 7 T. R. 423; Bache v. Proctor, 1 Doug. 382; Dormer v. Knight, 1 Taunt. 417; Doe v. Worsley, 1 Camp. 20; Doe v. Laming, 4 Camp. 77; Tombs v. Painter, 13 East, 1; Quacken-boss v. Lansing, 6 Johns. 49. Lord Chief Justice Hobart, in Clanrickard v. Sidney, Hobart, 277, said: "I do exceedingly commend the judges, that are curious and almost subtile, astuti (which is the word used in the Proverbs of Solomon in a good sense, when it is to a good end), to invent reasons and means to make acts according to the just intent of the parties, and to avoid wrong and injury, which by rigid rules might be wrought out of the act." This language is approved by Lord Hale in Crossing v. Scudamore, 1 Vent. 141; and by Chief Justice Willes in Doe 9. Salkeld, Willes, 676, and Park hurst v. Smith, Willes, 332. See Thompson v. McKay, 41 Cal. 221 (1871).