Fox Solid Pressed Steel Co. v. Schoen

• Decision Date: 08 December 1896
• Citation: 77 F. 29
• Parties: FOX SOLID PRESSED STEEL CO. v. SCHOEN et al.
• Court: U.S. District Court — Western District of Pennsylvania

77 F. 29

FOX SOLID PRESSED STEEL CO. v. SCHOEN et al.

United States Circuit Court, W.D. Pennsylvania.

December 8, 1896

Cowen Dickerson & Brown, for complainant.

Strawbridge & Taylor, for defendants.

ACHESON Circuit Judge.

On and prior to October 10, 1891, the date of the written contract between the plaintiff, as part of the first part, and the defendants, as parties of the second part, both parties were engaged in the manufacture of center plates for car trucks under patents owned by them respectively; the plaintiff at Chicago, Ill., and the defendants at Pittsburgh, Pa. By the terms of the contract the plaintiff granted to the defendants the exclusive right to make center plates under the plaintiff's patents, and the defendants agreed to pay to the plaintiff 7 1/2 per centum of the gross selling price of all center plates sold by them; and it was stipulated that the plaintiff should have the right to make center plates 'for application to pressed metal truck frames manufactured by it ' upon the payment of a named royalty but should not otherwise engage in the manufacture of center plates. The contract contains this provision:

'It is further agreed that the parties of the second part will not engage, during the life of this agreement, in the manufacture of truck frames for moving vehicles, or any part of such frames, when made of pressed metal.'

The present controversy grows out of a difference between the parties as to the meaning of this clause. The plaintiff contends that the clause prohibits the defendants not only from making pressed metal truck frames and parts of such frames, but also from making out of pressed metal any part of a truck frame, of whatsoever kind of truck frame may be. The defendants maintain that the prohibition is against the making of pressed metal truck frames and parts of a pressed metal truck frame. If the literal reading of the clause were determining, the plaintiff's construction might be entitled to preference. But in the interpretation of a particular clause of a contract the court is required to examine the entire instrument, and may also consider the relations of the parties, their connection with the subject matter of the contract, and the circumstances under which it was made. Chicago R.I. & P. Ry. Co. v. Denver & R.G.R Co., 143 U.S. 596, 12 Sup.Ct. 479. Moreover, the practical interpretation by the parties of an ambiguous clause of a contract is entitled to great, if not controlling, influence (Topliff V. Topliff, 122 U.S. 121, 7 Sup.Ct. 1057); and such practical construction, though at variance with the literal meaning of the clause, will prevail (District of Columbia V. Gallaher, 124 U.S. 505, 8 Sup.Ct 585). Let us apply these principles here, and see with what result. From an examination of the whole paper of October 10, 1891, it is very clear that its main purpose was to regulate the manufacture of center plates as between the parties. The clause in question is secondary and incidental. Its introduction at all into the paper would be inexplicable were it not that the plaintiff was engaged in the manufacture of pressed metal truck frames, as the contract itself discloses. That style of truck frame was peculiar, and was of comparatively recent origin, and of limited use. The truck in ordinary use was and is the diamond...