that the contract might be determined upon the default or bankruptcy of the plaintiffs.

3. It was held that there was an implied covenant on the part of the company to take the whole number of 350,000 sleepers. That an order by the engineer was a condition precedent to any delivery of the sleepers by the plaintiffs; That the company were bound to cause such order to be given within the time limited by the specification; That although the engineer had power to alter the time for the delivery of the sleepers, such power was to be exercised within the period limited by the specification; That the engineer, as to matters in which he had a discretion, e. g. as to varying the time of delivery of the sleepers, stood in the position of arbitrator between the parties, but as to giving the order for the delivery he was a mere agent of the company; The only legitimate rule of construction is to ascertain the meaning from the language used in the instrument, coupled with such facts as are admissible in evidence, to aid its explanation. - Per Parke, B.

4. It has been held, also, in a contract with a railway company to deliver iron, " near the months of July and August," and the delivery continuing till the 25th of October, and the company not objecting to receive it, that they were bound by the * terms of the contract, one of which was that they were to give their notes for each parcel of iron as it was shipped.3

5. So, too, under the English statute, which provides that the directors of a railway company may contract by parol, on behalf of the company, where private persons may make a valid parol contract, it was held, where the agent of the company agreed by parol with the plaintiff to purchase of him a quantity of railway sleepers upon certain terms, the sleepers being delivered and used by the company, that they were liable.5

Bailey v. The Western Vermont Railw., 18 Barb. 112. It was also held, here, that the refusal of the company to give their notes, as stipulated, excused the plaintiff from delivering or tendering the remainder of the iron, until the company should tender their notes, and entitled plaintiff to sue presently.

4 8 and 9 Vict. c. 16.

⚫ Paulding v. London & North W. Railw., 8 Exch. 867; s. c. 22 Eng. L. & Eq. 560. The contract was made by the engineer's clerk, who was also clerk of the company, but there was evidence of the assent of the committee. Lowe v. London & North W. Railw., 18 Q. B. 632; s. c. 14 Eng. L. & Eq. 18.

* 439

SECTION XVII.

Contract to Pay in the Stock of the Company.

1. Breach of such contract generally entitles the party to recover the nominal value of stock.

2. But if the party have not strictly performed on his part, can only recover market value.

3. Cash portion overpaid, will only reduce stock portion dollar for dollar.

n. 2. Lawful incumbrance on company's property, will not excuse contractor from accepting stock.

§ 121. 1. In many contracts for construction, the whole or a portion of the price is stipulated to be paid in the stock of the company, as the work progresses, at certain stages, or when it is completed. The time, place, and mode of payment in such cases, will be the same ordinarily as in other contracts for payment of stock. If the company refuse or neglect to deliver the stock or the proper certificates when it becomes due, upon proper request or opportunity, they are generally liable, it is considered, as in other cases of failure to perform contracts, for a certain amount or value, in collateral articles expressed in currency.1

* 2. But it was held, that where the plaintiff recovered a balance due on equitable grounds, and not on the ground of strict and full performance of the contract, he was precluded on like equitable grounds from recovering more for the stock portion of the contract than its market value at the commencement of the action.2

1 Moore v. Hudson River Railw., 12 Barb. 156. It was held, in this case, that where a portion of the price of construction was payable in stock, at par, within thirty days after the completion of the contract, the company were not bound to make any tender of the stock, as in case of contracts for specific articles. But that it was a payment in depreciated currency, and no tender necessary. In a recent English case, Re Alexandra Park Co., 12 Jur. N. S. 482, where the contractor stipulated to accept a portion of his pay in stock, at the election of the company, it was held he was not bound by such an election after the company was ordered to be wound up as insolvent, as the shares thereby become extinguished.

2 Barker v. T. & R. Railw., 27 Vt. 766. In this case the court say: "If the defendants have, upon reasonable request, declined paying the amount due, in their stock, as stipulated, it would seem but reasonable they should pay the amount in money.

"1. This is the general rule in regard to contracts payable in collateral articles, estimated in currency, and not delivered.

"2. The stock of a corporation is but a certificate of such a sum being due

66

*3. So, too, where the work is to be paid partly in stock and partly in money, if the money part be overpaid, even by doing a the bearer. And when the party stipulated to pay in his own paper, if he refuse, suit may be brought immediately, although the paper was to have been on time, if given. But it was never supposed the party could reduce the recovery, by showing his paper depreciated in the market. This would be virtually giving the difference to the other stockholders. This would be the rule which should be applied if defendants are wilfully in fault. If it were the stock of another company, no doubt, all which could be recovered is the value of the stock in the market. Certainly, this is the general rule in regard to stock. And, perhaps, that rule should be applied to the stock of the defendants, if it appears they have not wilfully and unreasonably refused to deliver the stock. Ante, § 38. 'But the recovery here is not allowed upon strictly legal grounds, upon the strict and literal performance of the contract on the part of the plaintiffs. It is rather upon equitable grounds that any recovery and apportionment of the contract is allowed for any thing less than full performance. By the terms of the contract the defendants had a right to retain the tenth part reserved until full performance. And, although it has not been regarded as a strict condition precedent in some of the cases (Danville Bridge Co. v. Pomeroy, 15 Penn. St. 151), still it is a stipulation in the contract, for the full performance of which the defendants had the right to insist, and for doing which they are not to be themselves regarded as in fault. The defendants, too, were justified in refusing to pay any deficiency in the work at the time of the demand; so that while we excuse the plaintiffs from full performance of their contract, as a strict condition precedent, and allow them to recover to the extent of what they had done, on the equitable ground that they had in good faith attempted to fulfil their undertaking, and supposed they had done so, and only failed by mistake and misapprehension, which should not, under the contract, defeat the recovery in toto, but only subject it to an equitable deduction for all damage sustained by defendants, it seems to us that it should form a part of this equity to the defendants, not to be required to pay more for this stock, even if it were their own, than it was in fact worth, or could have been made to benefit the plaintiffs.

"As we now hold, the plaintiffs were, at the time of the demand, entitled to recover, upon equitable grounds, a sum less than the whole price. But they demanded the whole price, and the defendants refused. The demand itself was unreasonable. Is it certain a reasonable one would have met a similar fate? It has been held the demand must be reasonable, to render the refusal unreasonable. Jameson v. Ware, 6 Vt. 610. As, therefore, the refusal of defendants seems to have been not altogether without good excuse, and in allowing an equitable recovery, in a case like the present, one of the first requirements seems to be, that no injustice shall be thereby visited upon defendants, it would almost necessarily follow that we should not suffer the plaintiffs to recover more for the work really done by them than they could possibly have realized if they had been paid at the time, according to the contract. And, as we set up a basis of recovery upon equitable grounds, and one not contemplated in the contract, we should not visit the defendants with a judgment which will make them worse off than if they had been allowed to pay the sum found to be

* portion of the work, which the party reserved the right to do in order to hasten the work, it will only reduce the stock payment due upon this equitable basis, after it is declared, according to the stipulations of the original contract. If this view is sound and equitable, and we see no reason to doubt it, the plaintiffs, as to the stock portion of their judgment, are entitled to the highest price the stock bore after the suit was commenced, and before the final judgment, or, if they choose, the court will strike out that portion of the amount reported, and require the certificates of stock still to be delivered; and if defendants refuse, on reasonable request, enter up judgment for the full amount." But if the contractor perform extra work he is entitled to recover for that, in money, upon an implied promise, notwithstanding by his contract he was to accept part of his pay in stock for all work done under the contract. Childs v. Som. & Ken. Railw., Cir. Ct. U. S. Maine District, May 1, 1857. 20 Law Rep. 561. In the case of Cleveland & Pittsburgh Railw. v. Kelley, 5 Ohio, N. S. 180, it is held, that where one-fourth of the amount due the contractors is to be taken in the stock of the company, and the company refuse to deliver the stock on request, they are only liable for the market value of the stock at the time it should have been delivered. The court profess to base their opinion upon the ground that in contracts of this character there is not understood to be any election reserved by the company to pay either in their stock, or in money, but that it is an absolute undertaking to deliver so much stock as shall, at its par value, be equal to one-fourth the amount due the contractor. It does not readily occur to us how this relieves the question from the apparent violation of principle, in allowing the company to refuse to give certificates of their own stock which they have contracted to do, and at the same time pay less than its par value. It is, in ordinary cases, equitable, no doubt, and always where the refusal is upon the ground that nothing is due the contractor. § 121, n. 2.

Ante,

The point of the decision is thus summed up by Mr. Justice Swan. “For these reasons we are of the opinion that no such election was contemplated by either of the parties when the contract was entered into; that the law relating to trade notes and contracts of a like kind, has no application to the agreement between these parties; that it was an exchange of work for stock, in which monetary terms were necessarily used, not for the purpose of expressing real values, but as the only mode of expressing quantities and proportions; that the fourth to be taken in stock was not a money indebtedness, but a stock indebtedness; and, consequently, that the company could derive no benefit from the increased value of the stock, and could suffer no loss by its depreciation; the damages which the contractors suffered from the non-delivery of the stock being its market value."

See also Boody v. Rut. & Bur. Railw. (Cir. Ct. U. S.), 24 Vt. 660. In this case it was held, that the defendants having given their creditors a mortgage upon their road, after the contract with the plaintiff, did not excuse him from accepting the stipulated proportion of the payments in stock.

Nor can the contractors, in such case, refuse to receive the stock, because the legislature, in the mean time, altered the charter of the company, by which the capital stock and debt of the company were increased; nor because the com

* dollar for dollar, and not according to the market value of the stock at the time.3

SECTION XVIII.

Time and Mode of Payment.

1. No time specified, payment due only when 3. But if company pay monthly, such usage

work completed.

2. Stock payments must ordinarily be demanded.

qualifies contract.

4. Contract to build wall by cubic yard, implies measurement in the wall.

§ 122. 1. Where no time of payment is specified in terms in the written contract between the parties for the construction of a portion of a railway, it was held, that looking to the contract alone the contractor could not call for payment either of the cash or stock portion of the contract, until a complete performance of the contract on his part.1 Or, upon the most favorable construction, until some distinct portion of the work, for which the contract fixed a specific price, was accomplished.1

2. In regard to the stock portion of the payments, a special demand was necessary before the contractor could maintain an action for it.1

pany voted not to pay interest on the stock, in money, as they had before done, it not appearing that the value of the stock had been affected by either. Moore v. Hudson River Railw., 12 Barb. 156.

And where a company, in settlement with a contractor, agreed to pay him a certain amount, in stock, or the bonds of the company, at his election, the company retaining the same as security for certain liabilities on account of the contractor, and gave the contractor a certificate of such stock, with an agreement indorsed, to exchange it for bonds, at his election, and the certificates were then returned to them, as their indemnity; it was held, that the company were bound to deliver the bonds, notwithstanding the treasurer had entered the shares in the books of the company as the property of the contractor, and they had in consequence been sold upon execution against him. Jones v. Portsmouth & Concord Railw., 32 N. H. 544.

A contractor who agrees to take a portion of his pay in the bonds of the company, has no such interest in any question, in regard to their validity, as will prevent a court of equity from enjoining those of a county, which had been delivered to the company without a proper compliance with the conditions of the statute, under which the subscription was made, the contractor having had knowledge of the facts from the first. Mercer County v. Pittsburgh & Erie Railw., 27 Penn. St. 389.

3 Jones & Dow v. Chamberlain, 30 Vt. 196.

1 Boody v. Rut. & Bur. Railw., 24 Vt, 660 (U. S. Cir. Ct.).