Union Canal Company against Antillo, 4 Watts & Serg. 553

The opinion of the Court was delivered by Rogers, J. — The intention of the parties, to be collected from the instrument itself, is the only rule of construction. The certificate might have been expressed in more precise and intelligible language, but giving every word of the contract its fair and legitimate meaning, its import seems to be this. In the first place, we must remark that the instrument must be viewed in reference to two periods, before and after the 1st of January 1840, and also as it affects the interest of the borrower and lender.

Before the 1st of January 1840, the borrower is entitled to an interest of 6 per cent, payable quarterly, and moreover the right, esteemed a valuablé one, is reserved at any time before that date, to convert the loan into the capital stock. The company are prohibited (as we infer) from paying before that time the amount of the loan without the assent of the lender.

It is true, there are no express words to this effect, but yet we cannot doubt as to the intention, for although the language of the agreement imports that the money was due immediately, yet the word ‘due’ is obviously used in the same sense with ‘ owing;’ and we cannot but see that it would be a violation of the spirit of the agreement, that one of the contracting parties should have the power to pay or the other to enforce payment before the time fixed in the certificate.

The right to redeem the loan after the period named in the certificate is expressly reserved, and from this the inference is irresistible that it was not designed to resume that right before that time. Nor can it for one moment be admitted that it was designed that the holder should have the power to compel payment of the principal before the year 1840. Until then the company fulfil all their engagements by a punctual payment of the interest, and neither party can affect the amount due or owing, except by a change at the election of the borrower of the principal into stock.

The only obligation, therefore, imposed on the company before the period mentioned, is payment of the interest according to the stipulations of the contract. But how do the parties stand after that time, is the material question. There is due, &c., is the language of the certificate, to the lender the sum of $200, bearing an interest of 6 per cent, per annum, payable quarterly, &c., the principal to be redeemable in the option of the company at any time after the 1st day of January 1840. This clause, we conceive, must be read as if written to be redeemable only at the pleasure of the company.

The managers, reflecting that it might be inconvenient to return the principal at any precise time, contract for the privilege to redeem it at their pleasure; and hence the peculiar language of the certificate. The principal is to be redeemable at the option of the company, and from this a necessary implication arises, that they shall not be compelled to redeem it.

The plaintiff’s construction strikes these words, which were obviously inserted for the benefit of the company, entirely out of the contract; and it is not easy to see for what purpose they form part of it, if, as is contended, the plaintiff may at any time enforce the payment not only of the interest but of the whole amount loaned.' On the latter construction the words “ redeemable in the option of the company,” are useless, as without them the company would have the right to pay the amount due at that time, and would be prevented from paying it before.

When the loan was effected, the disastrous termination of the affairs of the company was not foreseen. It was supposed that, unlike a loan to an individual, there would be no difficulty in realizing the amount loaned by putting it into the market. Stocks of that description, like government scrip, usually have a marketable value, and to meet an unexpected contingency, are easily convertible into cash. These considerations render it less difficult to understand the motives of the parties in entering into the agreement, and certainly go far to explain the terms of it, which would otherwise be unintelligible.

Thus, if the rate of interest be reduced, it would be to the benefit of the company to open a new loan, and repay the amount borrowed; but if there should be no change in the value of money, then it was to be at their option to continue the contract on the same terms. From this it appears that the right in question is an essential part of the agreement, intended for the special advantage of the company, but of which the plaintiff' seeks to deprive them by an attempt, contrary to their will, to enforce the payment of the principal.

No reason has been assigned for the introduction of the words, “ to be redeemable in the option of the company,” unless on the supposition that they alone are to determine when the loan shall be repaid. Any other

interpretation leads to inconsistent rights. It cannot be redeemable at the pleasure of one, and at the same time in the power of the other to compel a redemption. It is of little consequence whether we consider the contract in the nature of a perpetual loan or an annuity coupled with a power to redeem, but we are of opinion that it falls within the latter description. It may be remarked, that if there had been no change in the circumstances of the company, this contest probably would not have arisen. But subsequent events can have no operation on the construction. It must be construed as it was understood when made, and in giving an

interpretation to the instrument, we are not at liberty to discard so essential a part of the agreement. Judgment reversed, and a venire de novo awarded.