The opinion of the court was delivered, by
Siiarswood, J.— Every generation seems to have some special bubble. That of- the latter part of the last century was speculation in wild lands. It danced and glittered in the sunbeam for a brief existence and then burst. Out of this excitement grew the North American Land Company. The originators of it had gone very largely into the taking up of unappropriated lands, and the company was a scheme evidently to enable them to dispose of them to advantage. They were the owners severally or otherwise of six millions of acres situate in different states of the Union. The property was to be conveyed to trustees, and upon the basis of it 80,000 shares of 200 acres each were to be issued. Only four and a half millions were in fact transferred, the title to the residue having proved imperfect. The whole number of shares issued was 22,365. The number disposed of by the projectors to other persons at home and abroad, generally as payment or pledge for debts or advances, was 8447. In order to promote the sale of the stock, Morris, Nicholson and Greenleaf, by the 23d of the articles of association of February 20th 1795, guarantied “that the dividend or dividends shall not be less than 6 per cent, per *259annum, or $6 on each share in every year,” and that in case of any failure of ability in the association to make such a dividend, they would advance and lend to the managers such sum as with the money in hand would enable them to do so. Every certificate of stock issued contained ' on its face notice of the existence of this stipulation or guaranty. It was to continue during the agreed term of the company, which was fifteen years. It was fulfilled for the first two years; but soon after Morris, Nicholson and Greenleaf failed, and became utterly and hopelessly insolvent. The company were able to declare no annual dividends, and the guaranty of the three projectors was entirely worthless. As a security for their engagement they had stipulated to deposit in the hands of the trustees each 3000 shares of the stock of the company; but this stock could neither then nor at any subsequent time command any price in the market. In 1807, when new or supplementary articles were adopted in accordance with a provision contained in the original agreement, this was the condition of things: the guarantors were hopelessly insolvent — the claim on them for arrearages as well as for the two remaining years of the contract, was literally good for nothing — the collateral pledged had no market value, and was entirely unavailable. In placing a construction upon these supplementary articles we must take these circumstances into consideration. All idea of any claim on the continuing guaranty was simply ignored; and as to the arrearages, instead of providing that notice should be given, the collateral sold, and the proceeds credited on account, they declare that the stock should be taken and held in lieu of the arrearages. “ In lieu of” means in the place of — the one a substitution for the other. Such is the language of the 3d additional article as proposed and adopted. By the 2d article, immediately preceding, it had been provided that the old should assign to the new trustees “all shares of stock of the company that may have been transferred to them or in their names under the 23d article of the agreement” of February 20th 1795. It is objected that such shares never were transferred, and therefore the consideration of the release of the arrearages failed. In point of fact the 7455 shares which had been left in pledge under the 23d article, by the advice of eminent counsel, had been put up at public sale and bought evidently by a mere trustee for the company for the purpose of being voted on at the annual meeting in December 1807, at which the question of adopting the supplementary articles proposed at the preceding annual meeting was to be decided. By this act the beneficial interest was certainly vested absolutely in the company] freed from any right to redeem in the pledgors. The transfer of the legal title from the old trustees to the new was a mere formal act, which the company could command at any time. That which a chancellor would decree shall be considered in equity as actually *260done. That this was the cotemporaneous construction of the transaction is manifest from the fact that the 8d article as proposed was adopted after the public sale had taken place. Thus, as we construe these agreements, the arrearages of interest then due and unpaid on the guarantee were intended to be and were released.
It appears to us equally plain that the continuing guaranty, of which only two years remained at the time of the adoption of the supplementary articles, was also intended to be and was actually released. The principal contract was materially changed, and where that is shown the surety’s agreement to transfer his engagement to the new undertaking must very clearly appear. Now here the original undertaking was to make annual dividends, and the guaranty was .that they should be at least 6 per cent, per annum. By the new agreement, annual dividends were done away with; and instead thereof, by the fourth article, it was agreed “ that whenever the lands and property of the company shall have been all sold and the conditions of sale complied with, the said managers of the company shall, by public advertisement, call a meeting of the stockholders and shall divide among them the proceeds of the same, according to their respective interests therein.” And the fifth is added, which seems to have been written with an eye to this very question, “ that whatever may, in any of the articles of the aforesaid agreement of 20th February 1795, prove repugnant to or inconsistent with the supplementary articles now agreed to, shall be and is henceforward declared to be for ever rescinded and annulled.” Here, too, as in regard to the question of the release of the arrearages, that this was the cotemporaneous understanding is abundantly evident. The supplementary articles Were adopted December 81st 1807, and at a meeting of the managers, February 4th 1808, “ the secretary communicated the form of a new certificate of shares, to be issued in all future transfers, which was approved of.” The new form of certificate omitted all reference to the guaranty. At the same meeting it was resolved “ whereas Robert Morris and John Nicholson, both jointly and severally, are deeply indebted to the North American Land Company,” that therefore “no transfers of stock shall hereafter be admitted or made, nor interest thereon granted or paid (unless by consent of a majority of the present managers, their survivors or a majority of such survivors) in cases where there is any reason to believe that Robert Morris and John Nicholson or either of them or their legal representatives, have any equitable interest in or claim to such shares.” If there had been any idea either that the arrearages were then a subsisting debt, or that the guaranty was still a continuing one, the name of James Greenleaf would not have been omitted in these proceedings. Some order would have been made at least for the future, as no one could have enter*261tained any expectation that he and his co-obligors ■would be able to fulfil their engagement under the twenty-third article. Cotemporaneous construction is not indeed conclusive, but if any doubt rests upon the question, or, as in this case, a very long period of time has elapsed before it was made, it is certainly an argument entitled to very great weight. More than half a century has gone by, and the men engaged in these transactions have all departed. With them have died the feelings which grew out of the controversies connected with this unfortunate company. We have decided the case as one of mere abstract law, and the considerations we have thus presented seem to us amply to sustain the conclusion at which we have arrived.
The special report of the auditor confirmed and the case recommitted to him to make distribution accordingly.