This is an action of covenant. In the in-
strument declared on,, the defendants covenant “ that they will in a reasonable time take measures for the formation of a company or companies to use and operate under the said inventions and patents, with a capital stock of one hundred and seventy-five thousand dollars,” &c., and to issue to Sara J. Cooke, (who assigned her interest to the plaintiff,) capital stock to the par value of ten thousand dollars, which was to be in full payment for the machines therein referred to. Other covenants are contained in it, but as no question arises in respect to them it is unnecessary to notice them further. The plaintiff claimed that the clause above quoted is to be so construed as to require the defendants to take effectual measures, &g. ; and the defendants claiined that they were only required to take reasonable and proper measures, &c. - The court sustained the defendants’ claim.' To this ruling the plaintiff excepted, and that presents the important question in the case.
In this, as in other contracts, our object should be to discover the intention of the parties. That must be ascertained from the language used, having regard to the subject matter, and the circumstances surrounding the transaction. The plaintiff’s construction requires us to insert in the covenant the word “ effectual,” or otherwise to interpret it as importing an absolute obligation. Should we-do so, the danger is that we should make a contract for the parties different, from that made by themselves. Had they intended that their contract should be understood in that sense, they doubtless would have used language clearly evincing such an intention. The fact that they did not do so, and the language employed, indicate that the parties contemplated the possibility of a failure, from some cause, in the formation of a company. We must if possible give effect to all the words. We can only give a meaning to the words, “ take measures for the formation of a com*305pany,” by construing them as qualifying to some extent tbe obligation assumed.
A brief consideration of the subject matter will confirm this view. It is a new invention secured by letters patent. Perhaps it is not too much to say that of all business enterprises those which are based upon newly patented inventions are the most uncertain in their results. Comparatively very few of such inventions are really valuable. In most cases their value cannot be determined absolutely, except by actual experience. Experiments and test trials often fail to give correct indications. The success of an enterprise will frequently depend upon a. great variety of circumstances, apparently small and insignificant in themselves, and which cannot be brought within the range of mere experimental tests. And when it is ascertained that an invention is truly valuable, it is then subjected to all manner of competition with rival inventions, and frequently requires protracted and expensive litigation to establish its priority,» or protect it from infringement. Contracting in relation to property so uncertain in its character, and the value of which depends so much upon unforeseen contingencies, we should expect men of ordinary prudence and sagacity to use cautious and guarded language. No one knows the hazardous nature of this kind of property better than the inventor himself. He invests his skill, time and money with knowledge of all the risks. When his inven tion is complete he knows too that its value, and the Aralue of stock in a corporation formed to operate it, must depend largely upon its successful operation. When invention and capital thus unite to engage in business, we suppose that it is ordinarily done through the agency of a corporation, and that the invention goes in as so much capital. The whole capital invested, whether in money or invention, is exposed to the ordinary risks of business, and each stockholder assumes his proportion of the risk. That was manifestly the intention of the parties to this contract. The plaintiff’s interpretation contravenes that intention. If we adopt it, upon the facts found, one of three things must be true. 1st, the covenant must be regarded as equivalent to a covenant to pay *306so much money; 2d, the court must countenance and encourage an enterprise, the success of which must depend upon the extent to which the public may be defrauded; or, 3d, the plaintiff’s stock acquired under the covenant must be worthless. The first contemplates the formation of a company with a paid up capital, and an immediate dissolution and division of the capital among the stockholders. The supposition that such was the intention of the parties is absurd. The second contemplates the dealing in territorial rights with a worthless invention. Such business can receive no encouragement from this court. The third contemplates the business of manufacturing files, which, when ready for market, are worthless. The result must. be speedy bankruptcy, in which case the stock is worthless. In that event the plaintiff would be entitled only to nominal damages, to enable the party to recover which this court will not grant a new trial.
We come to the conclusion therefore, both from the language of the instrument and from -the subject matter, that the interpretation claimed by the defendants is the correct one, and that the parties intended only that the defendants should take reasonable measures and make proper efforts to form a company for the purpose specified.
What must be regarded as reasonable and proper efforts must depend upon circumstances. The prospect of success or failure is certainly a material circumstance, and that must depend largely upon the value of the invention. The evidence of its value therefore was admissible. Upon all the evidence the court below found explicitly that the machine was worthless, that the invention was of no value, that the defendants in a reasonable time took all reasonable measures and made all proper exertions for the formation of a company for the purposes specified, and that no such company could be formed.
We entertain no doubt that the case was properly decided, and a new trial must be refused.
-In this opinion the other judges concurred.