Case Name: Charles Trowbridge v. Oliver T. Holcomb et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1854-12
Citations: 4 Ohio St. 38
Docket Number: 
Parties: *Charles Trowbridge v. Oliver T. Holcomb et al.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 4
Pages: 38, 39–45, 46

Head Matter:
*Charles Trowbridge v. Oliver T. Holcomb et al.
An agreement to pay $1,500 in wool, at twenty cents per pound, may be discharged by the payment of $1,500 in money. That sum, and not the market value of 7,500 pounds of wool, is the measure of damages, if the wool be not delivered.
Bill in chancery to foreclose a mortgage; reserved in Geauga county. The factB sufficiently appear in the opinion of the court.
W. L. Perkins, for complainant, made the following points:
I. The right determination of the suit depends on the construction of the agreement in the mortgage and notes, which, being of the same date and same transaction, altogether constitute the agreement.
When the terms of a contract admit of more senses than one, the court is to construe it “ so soon as the true meaning of the words in which they are couched, and the surrounding circumstances, if any, have been ascertained as facts by the jury,” Chitty on Contracts, 8 ed. 73; 1 Greenl. Ev., sec. 277.
The language used by a party to a contract must be construed as he supposed the other party would understand it (vide Paley’s Moral Philosophy), or as the other party had a right to understand it. Gunnison v. Bancroft, 11 Vermont, 493.
Taking the notes and mortgage together, the intention of ibhe parties was to buy and sell a farm for wool, and that it should 'be paid for in 7,500 pounds of wool; and if this suit had been an action at law on the notes, no defense' could have been attempted against that view of the subject.
The objection, “that this proceeding being on the mortgage to subject the land, Holcomb being insolvent, and the mortgage speeifying an indebtedness of $1,500, that amount of money and ^Interest should pay it,” can not, with any propriety, be applied to Holcomb, for he executed the notes, too, and the whole are one contract.
II. It is sufficiently apparent from the mortgage itself, that it was intended that the payment should be in wool.
III. But, if it were otherwise, are not Dutton,- Cushman, and Richmond chargeable with notice of the existence and contents of the notes ?
What puts a party on inquiry is sufficient notice. A deed which refers to another deed, or “which leads the purchaser to another fact,” gives him notice of such other deed or fact. 2 Leading Cases in Equity (pt. 1), 100, 103; Bolles v. Chauncey, 8 Conn. 390; Sigourney v. Munn et al., 7 Conn. 324. “A purchaser who has actual notice of one instrument affecting an estate, has constructive notice of all other instruments to which an examination of the first could have led him.” 2 L. C. in Equity (pt. 1), 103; Moore v. Bennett, 2 Ch. C. 246; Coppen v. Ferneyhough, 2 Bro. C. C. 291.
The mortgage is referred to by recital in each of the deeds, to Dutton, Cushman, and Richmond, and the mortgage shows that notes were given for the wool.
One purchased an estate with notice of a post-nuptial settlement, not recited in the deed; the court held he should have gone to the wife’s relations, who were parties to the deed, and made inquiry whether it was voluntary, or made in pursuance of an agreement before marriage. 2 Leading Cases in Equity (pt. 1), 104; Ferrors v. Cherry, 2 Bridg. Dig. 689; 2 Vern. 384.
Whatever is sufficient to direct attention of the purchaser to prior rights and equities of third persons, and to enable him to ascertain their nature by inquiries, will operate as notice. 2 Leading Cases in Equity, 116, and numerous cases there cited. To the same purpose is Hurd v. Vattier, 1 McLean, 118.
[40 Mr. Perkins also cited the following authorities:* Edgar v. Bois, 1 Serg. & R. 445; Price v. Introbe, Harper, 111; Wilson v. George, 10 N. H. 445, McDonald v. Hodge, 5 Haywood, 85; Lang-try v. Walker, 6 Humph. 336; Hixon v. Hixon, 9 Humph. 33; Sedgwick on Dam. 241; Henry Petoe’s case, 9 Coke, 77.
IY. The plaintiff is entitled to a decree for the highest price on the quantity of wool in each note, between the time when it was due and the day of decree, with interest from the time of such highest price. Chipman on Con. 285; Clark v Pinney, 7 Cow. 212; West v. Pritchard, 19 Conn. 217.
Riddle & Thrasher, for defendants:
I. Richmond can be reached only through the mortgage. He is by it advised that there are notes only, and is permitted to presume that they are in ordinary form; or, at the most, that they conform to the mortgage.
II. But even if Richmond is charged with notice of the terms of the “ wool notes,” he can not be affected by them. Whatever may be the rights of the plaintiff at law on those notes against the maker, he can enforce none against Richmond. His liability is measured by the mortgage, and that expressly provides, that it shall be void on the payment of the debt, not according to the tenor and effect of the notes, but according to the terms of the mortgage; and when those terms are complied with, the cloud vanishes: and if the plaintiff has not received full redress, he must seek it elsewhere, through other channels.
HI. This is a contract for the payment of a debt of $1,500, in wool, at twenty cents per pound, and not to be treated as a mere contract for the delivery of property. We are not aware that any decision in Ohio has settled the amount recoverable for the nonpayment of such a contract, in the property specified. We think, however, that the case of Newman v. Robert, 5 Ohio, 349, recognizes the doctrine, that it would be the originally expressed sum in money.
41] Under this head, counsel cited:* Pothier on Ob., No. 497; Chipman on Con. 35, 36; Perry v. Smith, 22 Vt. 301; Smith v. Smith, 2 Johns. 235; Brooks v. Hubbard, 3 Conn. 58; Baker v. Mair, 12 Mass. 120; 12 Sm. & M. 495.

Opinion:
Thurman, C. J.
March 11, 1847, Oliver T. Holcomb, in consideration of the sale and conveyance by Philander Parr to him, of a farm in Geauga county, made his seven promissory notes, payable in wool to Parr or bearer on July 1st, in the years 1848 to and including 1854, respectively; the first two being for 1,000 pounds each, and the remaining five for 1,100 pounds each. These notes are alike in form, the only difference being in the amounts and times of payment, as above stated. The following is a copy of one of them:
" For value received, I promise to pay Philander Parr or bearer, 1,000 of wool the 1st of that this note and the payments are to be on all the conditions and stipulations in a mortgage given by said Holcomb to said Earr, to secure the payment of this and other wool notes, dated the 11th day .of March, 1847; this wool to be delivered at my house.
(Signed,) " Oliver T. Holcomb.
" Chardon, March 11,1854."
At the same time and upon the same consideration, Holcomb reconveyed the farm to Earr by the mortgage deed referred to in the notes, the condition of the mortgage being in these words :
" Whereas, Oliver T. Holcomb is indebted to the said Earr in the sum of $1,500, to be paid in wool at the times and in the manner following, to wit: 1,000 pounds by the 1st day of July, 1848: 1,000 pounds by the 1st day of July, 1849; and 1,100 pounds payable each year for five years from said 1st day of July, 1849 — and said payments are not to draw interest — making in all 7,500 pounds of wool. It is always understood between the parties to this instrument that the said Earr is not to have the right to sue the said Holcomb upon any of the above ^payments, or to foreclose this mortgage, provided one-half of each note is paid when due, until the last payment becomes due (should said Holcomb fail to pay the same as they become due). And it is further agreed by the said parties, that if said Holcomb shall not have wool enough to pay the full amount of each payment as they become due, that the said Earr shall receive whatever wool he (said Holcomb) may have to turn out on each payment when it becomes due, at twenty cents per pound, and cancel so much of said indebtedness as said wool will come to at that price. Now, if said Oliver T. Holcomb, Ms heirs, assigns, etc., shall well and truly pay the aforesaid' amount of wool, according to the terms of this instrument, to said Philander Earr, or assigns, then the above deed to be void."
April 6,1847, Earr sold and assigned the notes and mortgage to one Searls, who/ion September 27, 1847, sold and assigned the same to the complainant.
July 1, 1848, the first note fell due and was paid in wool.
July 31, 1848, Holcomb and wife, by quitclaim deed, released all their interest in the farm to Earr.
December 8, 1848, Earr and wife conveyed it to Rodney B. Dutton, subject to the mortgage.
November 22,1849, Dutton conveyed it to Levi Cushman, subject to the mortgage.
April 18, 1851, Cushman and wife conveyed all but twenty-five acres to Lansing Richmond.
When the notes payable July 1, 1849,1850, and 1851, matured, they were respectively presented for payment, and payment in wool demanded, which was refused,-and á right asserted to pay in money one-half of each note at the rate of twenty cents for each pound of wool, viz., $100 on each note. This claim the complainant denied, but he agreed to and did receive the money offered, with the understanding, however, that he should not be thereby prejudiced in his right, if such right he had, to recover the excess which might exist by estimating the wool at the then current market price of wool.
*This bill is filed to foreclose the mortgage, the complainant contending that one-half of the matured notes has not been paid, and that consequently he is entitled to foreclose for the full amount of these notes less the sums paid. This position rests upon the assumption, that the debt could be discharged only by the payment of wool, or the current market value of wool. If it could be discharged by the payment of money, at the rate of twenty cents for each pound of wool, then, as one-half of the notes, thus estimated, was duly paid, it is admitted that the bill can not be sustained; the terms of the condition of the mortgage forbidding it.
The notes and mortgage must be construed together. They refer to each other, and are but parts of one contract. This is more plainly the ease than is usual in such transactions, since very important provisions contained in the condition of the mortgage are made parts of the notes by their very terms. Thus construed, we are of the opinion that the legal effect of the contract is an undertaking to pay $1,500 in money, or in wool at twenty cents per pound, to wit, 7,500 pounds, at the option of the payer. Upon no other construction can certain terms of the moi'tgage-condition be accounted for. Thus it is therein recited that " Holcomb is indebted to the said Earr in the sum of $1,500 to be paid in wool," etc. Now, if the complainant is right, this recital is worse than useless; it is a falsehood. Upon the complainant's construction, Holcomb did not owe Earr $1,500, but owed him 7,500 pounds of wool, the nondelivery of which might create a liability for more or less than according to what might be the market price of wool at the matiuity of the notes.
Again, " It is further agreed by the said parties," says the condition, "that if said Holcomb shall not have wool enough to pay the full amount of each payment as they become due, that the said Farr shall receive whatever wool he (said Holcomb) may have to turn out on each payment when it becomes due, at twenty cents per pound, and cancel so much of said indebtedness *as said wool will come to at that price." "Why this mention of " twenty cents per pound," this reference to " said indebtedness " — to wit, the before-mentioned indebtedness of $1,500 — and these words, " that price," if it was not the understanding of the parties that the debt was $1,500, to be discharged either by the payment of money or of wool at the rate of twenty cents per pound ?
In any other view these expressions ought not to be in the instrument, and we would be forced to disregard their plain import, and to decide that they were inserted without any object. This we are not at liberty, upon any just principle of construction, to do.
That an agreement to pay $1,500 in wool, at twenty cents per pound, may be discharged by the payment of that sum in money, that that sum is the measure of damages if the wool be not delivered, is, we think, the law, both on reason and authority. We are aware that there are decisions that'the market value of the wool is the measure of damages, but we do not think they are sound. Upon this question, the rule of the civil law is thus stated in Pothier on Obligations, No. 497 : "All agreements to pay in specific articles are presumed to be made in favor of the debtor, and he may, in all cases, pay the amount of the debt in money in lieu of the articles which, by the terms of the contract, the creditor had agreed to receive, instead of money."
With perhaps some qualification of the generality of this language, this is also the rule of the common law.
In Ohipman on Contracts, 35, it is said: " If A give B a note for $100, payable at a future day, in wheat at 75 cents per bushel, and wheat on the day of payment be $1 per bushel, A may, at his election, pay in wheat at 75 cents per bushel, or $100 in money."
To the same effect are Perry v. Smith, 22 Vt. 301; Smith v. Smith, 2 Johns. 235 ; Pinney v. Gleason, 5 Wend. 393; Brooks v. Hubbard, 3 Conn. 58; Baber v. Mair, 12 Mass. 121; Mettler v. Moore, 1 Black. 342.
*A collection of the authorities on both sides of this ques tion may be found in 2 Parsons on Contracts, 490.
In this state, we tbink that the rule to which we hold has always prevailed.
BUI dismissed.