
    Reuel Williams versus Marshall S. Hagar.
    The directors of a railroad company, which was failing in its circumstances, agreed in writing with its president, that if he would indorse for the company for an amount not exceeding sixty thousand dollars, they would severally indemnify him in the “proportions set against their names.” The total of the various sums subscribed was $38,000, — the liability assumed by the president was $40,000. In an action against one of the signers, it was held: —
    That the assumption of liability was a sufficient consideration for the contract of indemnity; —
    That the contract being perfect in itself, in the absence of any parol evidence explaining it, the director would be liable for the full amount of his subscription.
    But parol testimony was admitted without objection, showing that the plaintiff verbally contracted to indorse to the amount of sixty thousand dollars; — these agreements constituted two mutually dependent contracts ; one verbal, the other written.
    Under the two contracts, the plaintiff having performed in part, was, in the same proportion, entitled to be indemnified.
    As no particular mode of indorsing the notes of the company was indicated, his signing on the back as guarantor, was an indorsement within the terms of the contract.
    
      Money raised on his own private securities, with, which he paid the debts of the company, although equally advantageous to the company, the directors would not be liable for — not being within the form of the contract. Otherwise, where he had taken the notes of the company payable to himself, for money so paid by him, negotiated them and paid them as indorser.
    
    As to the mode of computing the amount of damages to which the plaintiff is entitled.
    Reported from JSTisi Prius, Rice, J., presiding.
    This was an action of assumpsit. The writ contains the general counts, and a special count upon a written agreement, alleged to be signed by the defendant; which agreement is as follows, viz. :—
    " A large part of the bonds of the Kennebec and Portland Railroad, and of the preferred stock authorized by the stockholders, not being disposed of or issued, and the holders of the floating debt of the company requiring payment of their dues, faster than money can be realized from those bonds and preferred stock, it has become indispensable to the preservation of the property and success of the r.oad that immediate provision should be made to meet a part of the floating debt, and to give confidence in the security of the bonds and of the preferred stock, so that they may be sold and issued, and, seeing no other mode to effect that object than for the directors to assume a personal responsibility.for the payment of the treasurer’s notes, on which money may be raised for the use of the company, and the undersigned stockholders in, and directors of, said road, not willing to put our names, upon paper to be used in the market, but willing to assume our several proportions of the hazard and liability for so doing, hereby propose' to Reuel Williams, president of the corporation, that, if he will indorse notes to be made by the treasurer, not to exceed sixty thousand dollars, in such sums and payable at such times as he and the treasurer may find best suited to raise money upon, we will severally indemnify and save him harmless for so doing, as also for his indorsing any notes that may be given by the treasurer as renewals of or substitutes for any of the aforesaid notes, in whole or in part, but in no case to exceed the amount of sixty thousand dollars, in the proportions sot against our respective names, the said Williams having a mortgage on the personal property of the company as indemnity for his said indorsements and other purposes, and no notes to be indorsed that are not payable within two years; and, in case any loss happens, we are to have our several proportions of the'benefit of the mortgage, after said Williams is paid for his advances and prior indorsements for the road, except the notes of Dec., 1852, and renewals thereof.
    "June 18, 1855.” (Signed,)
    " Geo. F. Patten, eighteen thousand dollars.
    " Wm. D. Sewall, thirty-three hundred dollars.
    "M. S. Hagar, thirty-three hundred dollars.
    "F. T. Dally, thirty-three hundred dollars.
    "Benj. A. G. Fuller, thirty-three hundred dollars.
    , " F. T. Lally, six hundred and sixty-seven dollars additional.
    " Benj. A. G. Fuller, six hundred and sixty-seven dollars additional.
    "Wm. D. Sewall, six hundred and sixty-seven dollars additional.
    " M. S. Hagar, six hundred and sixty-seven dollars additional.
    " J. D. Lang, four thousand dollars.”
    At the return term a bill of particulars was filed by the plaintiff, being a schedule of certain notes indorsed by the plaintiff and taken up by him, as alleged in the special count.
    The plaintiff, who was called as a witness, produced and verified the several notes enumerated in the bill of particulars ; all of which are signed by Gilman, treasurer, as maker, together with the notarial protests and notices to the plaintiff, as indorsor, upon each one of the notes, except one for $430,76, dated Nov. 8, 1855.
    The witness testified, that " after making the agreement of June 18, 1855, and in pursuance of it, he indorsed these several notes; that he was duly and seasonably notified of non-payment by the maker, upon all of them; and that he paid them all as indorser, together with the interest that had accrued and the notarial expenses, as stated in the bill of particulars.
    " The agreement was signed at a meeting of the railroad directors, held at Bath, June 17th and 18th, 1855, by all the parties who were expected to sign it, except Mr. Lang, who signed it afterwards. Thei’e is no disagreement between us, — that I was to bear a proportion of the liabilities contemplated in that paper. I was to go on and indorse for the whole sum which should be raised. They were to pay me in the proportions of their several amounts, to the whole amount intended to be raised. They were answerable to that extent. That is what I claim. The counsel who made the writ, made it as he understood the contract, or, as he thought it might be understood. I was to bind myself by-indorsing for the whole. They were to take and relieve me for what they signed, and I was to take the rest. I was not to sign the agreement.”
    
      On cross-examination, witness testified that, as a part of the' arrangement made by the directors at the meeting, a mortgage was authorized to be made to him for his indemnity for previous advances and liabilities for the company, amounting to $43,090,41, and for the further liabilities then contemplated. The mortgage was of the rolling stock; was not made until he returned to Augusta, on the next day.
    Among the notes specified in the bill of particulars, before mentioned, were four, amounting to $18,410,63, all of the date of July 2d, 1855, which were called, the "Amoskeag notes ;” two notes of $1500 each and another note for $430,76, called the "Hathorn notes ;” three notes called the "Thayer notes,” amounting to $18,427,87, and a note of $500f*to Woodbury.
    From the testimony of the witness, it appeared that the four notes first named, were given to the Amoskeag company for sundry notes which that company held against the railroad company for an engine called the "Lang.” That, soon after the engine was received, it ran over a bank, and was so badly damaged, it was sent back to the makers to be rebuilt. It was rebuilt at a cost of $3000. The company refused to accept the note of the railroad company, and held on to the engine for the repairs upon it. One of the original purchase notes became due and was not paid; a suit was instituted thereon and another engine attached. They proposed to Oilman, (the treasurer,) to give an extension of credit, if he would procure the witness to indorse the notes for the purchase money and for the repairs.
    At that time witness was in advance for the company over $40,000, for money he had let the company have, and was indorser of the company’s notes for $23,000 more*. Being unwilling to incur any more debt he called the directors together and stated to them the condition of matters. This was the occasion of the meeting held on the 18th of June and the arrangements made on that day.
    All the notes held by the Amoskeag company were due at that time, but some of them were not then payable. They were outstanding, and, to provide for them and other like debts, was the very object of raising this money. These notes wore renewed by his indorsing the four notes. The form of the guaranty, in which he was required to indorse, was furnished by the agent of that company.
    The witness further testified: — "Prior to the 1st of Dec., 1855, I was requested by some of the signers to the agreement sued on, not to indorse any more notes under it. I said I would not, if the other signers would agree to it. They agreed to it and I engaged not to indorse any more.
    " The notes given Hathorn were for sleepers for thb road. I paid them as indorser, on notice of non-payment by the company.”
    While the witness was receiver of the earnings of the railroad, he testified, he paid out faster than he received; the balance overpaid was from his own funds. At the end of Ms receivership there was $4000 more due him than when he began.
    With reference to the Thayer notes, the witness testified, that, " at the making of the agreement of June 18th, it was supposed that, if we couM immediately raise $20,000 in cash, out of the $60,000, we could get along for the time. I went at once to Boston. The treasurer made three notes for $10,000 each; payable to myself, on which I supposed I could raise money in Boston, on my indorsement of them. Thayer Brothers would lend me the money, but they would not have anything to do with railroad paper; not with my indorsement.” The witness specified the debts of the road paid by him out of the money thus obtained. The witness further testified: — " When I got through paying these debts I carried all the vouchers to Gilman and took these three notes. The money these notes represent went to pay existing debts of the company. The notes were to reimburse the advances from Thayer. The notes were discounted and I paid them as indorser.”
    There was testimony introduced in defence; the nature of it, as well as other facts proved in the case, will appear from the arguments of counsel and from the opinion of the Court.
    
      H. W. Paine and Whitmore, for the defendant.
    I. The paper writing of June 18th, 1855, though bearing the defendant’s signature, is not his contract.
    
    This writing is free from all ambiguity and admits of but one construction. The signers severally undertake folly to indemnify the plaintiff. The contributive portion of each is fixed. As the whole sum subscribed is to the whole loss, so is the amount subscribed by each individual to his share of the loss.
    The language’is: — "We will severally indemnify and save him harmless for so doing * * * in the proportions set against our respective names.” Whatever the loss may be the plaintiff bears no part of it. '
    
      The whole amount subscribed is, say, §38,000 ; || of the loss is to be borne by Patten, and 4e by each of the other subscribers. The testimony shows conclusively; indeed, it is not denied by the plaintiff, but substantially admitted, that he was to assume a part' of the risk.
    Hagar swears that Williams said — "I will take the paper and see Lang and get him to take what he will, and I will take the balance of the $60,000. We signed severally for $3,300; Patten had signed for $18,000. Lang was not expected to take above $6000. Williams said, ' I cannot bear the balance and I will not.’ We divided up McKeen’s part, and signed the additional sums. Williams professed himself satisfied.”
    Sewall swears: — "Williams took the paper in its then, condition, saying that he would have it filled up by the subscription of Lang, together with what he would take, to provide for $60,000. After consulting, it was said by some one of the persons who afterwards subscribed for $3,300, that if Patten and Williams would take $40,000 of this sixty, we would take the balance among ourselves; and we first subscribed on that basis. Patten declined to take over $18,000. McKeen did not take any. Mr. Williams said, after thus looking at the paper, 'you have left that for me, have you?’ We said, 'yes.’ He said, 'I will not take it.’ We then subscribed the additional sums put down to each of us, and estimated Lang’s at $6000, which would have left Williams $20,132. Mr. Williams accepted, undertaking, as I understood’, to get Lang’s subscription, and he would take the balance.”
    Mr. Williams, himself, says : — "They were to take and relievo me for what they signed, and I was to take the rest.” That all parties understood and agreed that the whole amount was to be taken, and that the plaintiff was to take a part; that he was to take so much of the balance as Lang did not take, is clear beyond a doubt.
    It is true Mr. Williams says, " I was not to sign the agreement.”
    
      Hagar and Sewall say lie was to sign it; both were surprised in 1858, when, on the production of the paper, it was found not to bear his signature. The fact, undoubtedly, was this : — It was not expressly agreed that Williams should subscribe; neither was it agreed that either of the others should sign. They agreed to take' and did subscribe. He agreed to take but could not subscribe till Lang’s portion had been ascertained. The amount of their several risks depended, not only on the amount set against their names, but upon the number of signers, the total amount of subscription. If Williams did not subscribe for $22,000, Hagar had tjV
    Williams says he was not to sign. This is his construction of the obligation of the verbal agreement. He did agree to take. Was not this an agreement to .subscribe? How else could he take his proportion?
    If he did not sign the others took the whole. This is the dilemma. It was agreed between all the parties that he should take all of the $60,000 which Lang would not take. Without signing, he could and did take nothing. Did not the agreement " to take,” involve necessarily the agreement to subscribe? If he was to sign, the contract has never been completed, and^Hagar well says it is not his contract.
    It may be urged, that the parties could not'have expected Williams to sign, because they describe themselves as unwilling to put their names upon paper to be used in the market, and this description excludes Mr. Williams.
    But the paper assumes the form of a proposition by the directors to the president of the road; a proposition to be accepted or declined. It was then and there verbally accepted. No other acceptance could take place till Lang had subscribed; It would have been consistent with the foi’m adopted, for Mr. Williams to have accepted in writing, adding that he assumed the risk to the amount of $22,000.
    2. Assuming the paper writing of June 18, to be the contract of the defendant, the plaintiff has proved no sxxch loss as he was indemnified against.
    
      The contract recites the condition of the corporation, states the objects to be accomplished and prescribes the manner in which it is to be done.
    The company was owing a floating debt and had certain bonds and preferred stock then unavailable. This was the condition.
    To pay off a portion of the floating debt and give confidence in the security of the bonds and preferred stock, so that they might be sold and issued, was the declared object of the arrangement proposed. And these objects were to be accomplished by raising money on the notes .of the company indorsed by Williams.
    All this appears on inspection of the contract; the language is explicit; and there is no occasion to resort to the conversation of the parties if it were allowable.
    The contract manifestly looks to the raising of money on the company notes indorsed for the use of the company. And such a course of proceeding would tend to accomplish the declared purpose; would tend to create a confidence in the securities which the company had to dispose of.
    It was for the signers of this contract to prescribe the terms upon which, and upon which alone they would be bound.
    Now it does not appear in the proof that one dollar was paid by the plaintiff on the notes of the treasurer, made to raise money upon. It does not appear that one dollar was raised to go into the treasury of the road.
    One item of the plaintiff's claim, and a large item, is for money which he paid as guarantor of notes to the Amoskeag company. This company held the notes of the treasurer for some S18000, matured and about to mature. An arrangement is made whereby the time of payment is extended and the plaintiff becomes surety. This was an acknowledged inability to pay on the part of the road. An extension is but another name for insolvency. Did that operation increase the public confidence in the road or its securities ? Did it not, on the contrary, have the effect to defeat the object aimed at?
    The Hathorn notes and the note to Woodbury are subject to the same remarks. They fall into the same category.
    The residue of the plaintiff’s claim is of a different character.
    Mr. Williams, understanding the contract to require' the raising of money on the notes of the treasurer, immediately after the Bath meeting went to Boston with the treasurer’s notes and endeavored to borrow money on them. He failed of success. He did not inform the signers of the contract, but borrowed money on a pledge of his own stocks, and disbursed the money from time to time in discharge of the debts of the company.
    On the 24th Oct. he settled his account with the treasurer and the disbursements were allowed, and he took the treasurer’s notes therefor.
    The answer to this part of his claim, is, that the .defendant never agreed to pay any part of it. And it is not for the Court to substitute a new contract. The defendant never promised to refund the plaintiff moneys which he might advance the company.
    3. The items, "coupons given up,” " 60 days interest on do.,” "coupons,” " 6 months interest on notes,” "dividend on preferred stock,” .under head of " R. Williams’ account,” were payments not authorized by'the contract, or contemplated by the signers. These items , aggregated amount to $2,459,95. .
    The first, second, and third of these items were no part of the floating debt of the company.
    The fourth, item is interest on notes held under an arrangement of December, 1852.
    By the concluding sentence of the contract of June 18th. these notes are excluded.
    
      P. Barnes and J. II. Williams, for the plaintiff.
    The defence, in almost all its parts, is purely technical;
    
      Whether the plaintiff was required to sign the agreement of June 18th, is a mere question of form. The testimony is decisive that he was not to sign it. The use of the word " take,” by all the parties, shows that the idea of signing was a mere inference and afterthought in the minds of llagar and Sowall. The terms of the paper itself explicitly repel the idea that Williams was to sign it.
    By what ratio are the " proportions” of the signers to be expressed? One would be to make the aggregate of their subscriptions, 37,868, the denominator and each separate subscription the numerator; the defendant’s ratio, in that way, would be, in approximate even numbers, 3%. The other would be, to make the maximum sum named in the paper, the denominator; so, the defendant’s ratio would he ¿g.
    
    If the ratio of 38 parts is the true construction, then the six signers would " take” the whole f-|.
    If the ratio is 60ths, then the signers would "take” g§, leaving Williams to " take” §§.
    The latter, the plaintiff contends, is the true ratio, and he claims only on that interpretation.
    A careful analysis of the terms of the paper requires this construction.
    They engaged to indemnify in " proportionsbut, when they subscribed, they did not put down " proportions” but absolute sums, in dollars. Showing that they were thinking of the maximum sum named in the paper, and intended to express what part, in dollars, of that sum, in dollars, they would take, if so much should be raised, and a corresponding part, of course, if any less sum.
    Contemplating indemnity, they must have regarded not only “proportions” but an extent or limit of some aggregate. They could not then know what the aggregate would be. It is most simple and natural to infer, that they assumed the known limit of 60,000, as the aggregate basis of their proportions. So each one would know his utmost sum in dollars, and his obvious and exact ratio of any smaller aggregate.
    
      It is plain that when the defendant and the others subscribed at Bath each understood that his ratio was exactly fixed. But that could not be unless the ratio was 60ths. Any other ratio would be uncertain, depending on the amount Lang should subscribe, from 6000 down to any smaller sum.
    No testimony, phraseology or circumstance sustains the interpretation of 38 parts.
    As to the point that the notes were not indorsed or negotiated as required: —
    Regard being had to the object of the agreement "to make provision to meet a part of the floating debt” and to the mode of doing it, — the assumption of "a personal responsibility,” — there is nothing in the paper which requires the term "indorse” to be interpreted in any technical sense. The indemnity is binding if Williams gave his "personal responsibility” in any form consistent with any definition of the term.
    As to the negotiation of the Amoskeag and Hathorn notes it is enough to say, that the parties took the notes as money, and allowed them as money in discharge of their previous debts; that was a proper "negotiation.”
    On the Amoskeag notes Williams was iúdorser as well as guarantor. ■ So both parties intended.
    As to the Thayer notes Williams certainly " assumed a personal responsibility” to "meet a part of the'floating debt.”
    He started with the treasurer’s, notes strictly indorsed, to "raise money.”
    Nothing in the agreement forbade him to negotiate the notes to himself, or to raise money of himself.
    The original notes, it is presumable, he held as his voucher and security until October 24th, when the "substituted” notes were given for the actual amount raised.
    The preponderance of the testimony is that the substituted notes were negotiated out of the plaintiff’s hands; but whether or not, is wholly immaterial; "money was raised” to "meet the floating debt” by plaintiff’s "personal responsibility” on the strength of the treasurer’s notes to him as payee.
    But, in fact, no .question about the negotiation of these notes is open to the defendant. lie promised to indemnify for indorsing, and exacted no duty from plaintiff about negotiating. When plaintiff had indorsed the notes, and made them available to the treasurer, his right to the indemnity was complete. What he did in fact, with respect to the disposal of the notes, he did as agent of the treasurer, or as a financial officer of the company, not as a party to the agreement of June 18th.
   The opinion of the Court was drawn up by

Davis,

1855, the Kennebec and Portland Railroad

Company, of which Reuel Williams, the plaintiff, was president, owed a large floating debt, of which the current receipts afforded no means of payment. A failure was inevitable, unless funds could be raised on credit; and this could not be done upon the notes of the company, without a good indorser. In this emergency a meeting of the directors was held, of whom the defendant was one, to determine what should be done. At this meeting, held June 18th, an agreement was made that the plaintiff should indorse for the company to an amount not exceeding sixty thousand dollars ; and the directors would " indemnify and hold him harmless, in the proportions set against their names.” The sum set against the name of the defendant was $3,967.

The agreement of the directors was in writing, and was perfect in itself. The assumption of the liability by Williams would have been a sufficient consideration for the contract of indemnity. And in the absence of any parol evidence explaining it, the directors would have been liable for the full amount of their subscriptions.

But it appears by the parol testimony, admitted by both parties without objection, that the plaintiff made a verbal contract to indorse notes for the company to the amount of sixty thousand dollars. This was an additional consideration for the contract of indemnity. These together constituted two mutually dependent contracts, — one verbal — the other- written. One was an agreement to assume a given amount of liability; the other was, in case the whole liability should be assumed, to indemnify in part, to a given amount. .The assumption of the liability by the plaintiff was a condition precedent to the -liability of the others to indemnify him.

Taking the two contracts together, as proved, if there was only part performance by the plaintiff, he could exact only part performance of those who agreed to indemnify him. If he indorsed the company notes for only forty thousand dollars, instead of sixty thousand, then they became liable to him for only forty-sixtieths, or two-thirds of the sums by them subscribed. These sums, though denominated "proportions,” in their relation to each other, were actual subscriptions in their relation to the plaintiff; to be paid fully if he should pay sixty thousand dollars upon company notes indorsed by him; to be paid in proportion if he should pay a less sum.

Such we understand to have been the intention of the parties, as expressed by the written contract on the one side, with the verbal one on the other.

Under this arrangement the plaintiff assumed various liabilities for the company, amounting to over forty thousand dollars. ' These he afterwards paid, at various times, from Nov. 5, 1855, to July 5, 1856. These payments, with interest, costs of protest, &c., amounted to $41,138,88. If he could rightfully claim indemnity for all of them, then those who agreed " to hold him harmless ” became liable for a portion of each payment when made by him, with interest afterwards. And the amount of each payment for which they became liable .was that part bearing the same proportion to the whole, that $41,138,88, bears to $60,000. And of this the defendant became liable to pay a part only, his proportion being only $3,967 out of $37,868, the whole amount subscribed.

Nearly one half of the plaintiff’s claim is for notes of the company which he signed upon the back as guarantor. We have no doubt this was an "indorsement”, within the terms of the contract. The particular mode of indorsing was left, to his discretion.

Another portion of the claim, equally large, was originally for money advanced by the plaintiff. Being unable to get the company notes discounted, he raised money upon his own private securities, and therewith, in connection with the treasurer, paid nearly twenty thousand dollars for the company. For money so advanced by him, though equally advantageous to the company, the defendant and his associates were not liable. It was not-within the form of the contract made by them.

And the plaintiff seems to have been aware of this. For he afterwards indorsed notes for the company to reimburse himself; and, having negotiated them, he paid them at maturity. He probably did this to bring the transaction within the terms of the contract. We do not perceive that this is any objection to it. It varied from the contract, originally, inform merely. The money was raised for the purpose contemplated by the parties. And the indorsements after-wards actually made, being in execution of .the original understanding, were within the letter as well as the spirit of the agreement.

Objection is made to some small sums paid to the plaintiff himself. Whether these constituted any part of the floating debt we need not determine. That indebtment was the reason for making the contract. The disbursement of the money raised was not limited to that. The plaintiff does not appear to have abused the power given to him, by preferring his own previous claims against the company. According to the agreement of the parties, judgment must be entered for the plaintiff. The amount is to be determined according to the principles previously stated, for the defendant’s proportion of $41,138,88, with interest from the date of the several payments. The mode of computation is hereto annexed.

Tenney, C. J., May, Goodenow, and Kent, JJ., concurred.

Rice, J., having become interested in the subject matter of the suit, did not participate in the decision. 
      Note. — Method of computing the amount for which judgment is to he rendered for the plaintiff: —
      The payments made by the plaintiff commenced Not. 5,1855, and continued until July 5, 1856. He made eleven different payments.
      Upon each payment his right of reimbursement was for §■;§§ of the amount paid. Eor this, the defendant was liable with the other signers of the agreement.
      The defendant’s proportion of the amount for which all were liable to the plaintiff was ;|§£
      The plaintiff is entitled to interest from the date of each payment.
      Each of the eleven payments to be computed in this way, and the whole added together for the amount of the judgment in this case.
     