[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 360 The claim of the plaintiff, in this case, rests entirely upon the clause in the instrument called a chattel mortgage, executed April 13, 1850, in which it is recited that the defendants "are justly indebted" to the plaintiff in the sum of $1,195.85; and if he could be permitted to separate so much as contains this bare acknowledgment from all that precedes and follows it in the same instrument, as well as from the history of the transactions between the parties, his suit might, perhaps, be sustained, since a chattel mortgage, taken as a security for an antecedent indebtedness, might not discharge the debts unless it was so agreed. But the same clause upon which the plaintiff relies, as containing the acknowledgment, shows that the indebtedness admitted was for advances made upon a previously existing written contract, which was canceled simultaneously with the execution of the chattel mortgage.
The defendants' counsel insists that this contract may be referred to in order to explain the words relied upon to *Page 361 prove the indebtedness; while on the other hand it is contended by the plaintiff's counsel, that the language of the chattel mortgage is so explicit and unequivocal that no extrinsic evidence can be resorted to for the purposes of explanation. Upon this issue between the counsel the whole case depends.
It is a familiar rule, that we are not to select out a part of any written instrument and construe it by itself, but the whole is to be taken into consideration in putting a construction upon each of the parts. So also where two or more documents relating to the same subject are executed at the same time, they are all to be taken and construed together as one instrument. These are but branches of the still more general rule, founded in reason and common sense, which holds that no accurate judgment can be formed by considering only a part, not merely of a written instrument, but of any other subject. The rules that where part of a conversation is given in evidence the whole must be received, and that where part of any transaction is proved, nothing which constituted any portion of the res gestæ can be rejected, flow from the same general principle.
The present case may not fall strictly within the terms of any of the separate branches of this rule to which I have referred; but it is clearly within the reason and spirit of the doctrine upon which they are based. The chattel mortgage, in this case, constitutes but a part of an entire transaction It grew out of and was the legitimate product of the agreement which preceded it. It is obvious that its purpose and object can be better understood after knowing the previous contracts of the parties, and the relations subsisting between them. It refers in terms to the previous contract, and is thereby on its face connected with it. It would seem clear, therefore, that the original agreement could not fail to throw light upon the object and meaning of the subsequent mortgage. *Page 362
The rule referred to by the plaintiff's counsel, that to warrant the introduction of parol evidence to explain a written instrument there must be something equivocal or uncertain in the language to be explained, does not apply to this case. The evidence given for the purpose of explanation was of as high an order as that which it was admitted to explain. It was not received upon the ground of any apparent ambiguity in the mortgage, but as a part of the documentary history of the transaction between the parties, and as inseparably connected with the mortgage itself. The other instruments executed at the same time with the mortgage were, of course, admissible. Looking, then, at the whole case, it is apparent that no actual indebtedness existed prior to the execution of the mortgage. The advances made upon the contract of September 11, 1849, were to be repaid out of the proceeds of the sales, and created no personal demand against the defendants.
The arrangement entered into on the 13th of April, 1850, did not have the effect of converting these advances into such a demand. It was not a mere settlement of accounts between partners, and a statement of a balance due from one to the other, as claimed by the plaintiff's counsel; but was the substitution of an entirely new agreement in place of that previously existing. The interest of the plaintiff in the business did not cease with the cancellation of the original contract, but was to be continued under the new arrangement; a per centage upon the amount of sales was substituted for a share in the profits. This provision is hardly consistent with the idea that the defendants intended to assume the payment of the advances as a personal obligation. That supposition is, I think, also repelled by the declaration contained in the mortgage, that it was made solely to secure the application of the proceeds of the first sales to the payment of the plaintiff's claim, and that its condition could only be violated by a refusal to pay over such proceeds. *Page 363
This clause seems to have been inserted for the express purpose of avoiding any responsibility on the part of the defendants, except that of a faithful application of the proceeds of sales, pursuant to the conditions of the mortgage. The plaintiff, therefore, must seek his relief under the provisions of the agreement of the 13th of April, 1850. If there has been a violation of the express conditions of that agreement, or of any implied obligation on the part of the defendants to proceed with the manufacture and sale of machines, the plaintiff may have a remedy in some appropriate form.
But in the present case neither the allegations nor the proofs are such as entitle them to judgment. The defendants have not been called upon, by anything in the pleadings or in the course of the trial, to contest their liability for a failure to perform their implied obligations to go on with the business, and of course cannot be held responsible for such failure, in this suit.
The judgment of the Supreme Court should be affirmed.
COMSTOCK, J., did not sit in the case; all the other judges concurring,
Judgment affirmed.