Salant v. Fox

• Decision Date: 03 January 1921
• Docket Number: 2563.
• Citation: 271 F. 449
• Parties: SALANT et al. v. FOX et al.
• Court: U.S. Court of Appeals — Third Circuit

271 F. 449

SALANT et al. v. FOX et al.

No. 2563.

United States Court of Appeals, Third Circuit.

January 3, 1921

In Error to the District Court of the United States for the Eastern District of Pennsylvania; Oliver B. Dickinson, Judge.

Owen J Roberts, of Philadelphia, Pa., for plaintiffs in error.

Ruby R Vale, of Philadelphia, Pa., for defendants in error.

Before BUFFINGTON and WOOLLEY, Circuit Judges, and BODINE, District Judge.

WOOLLEY Circuit Judge.

The plaintiffs were clothing manufacturers of New York City under contract with the United States Government for the manufacture of shirts. The defendants were contractors, and owners and operators of a shirt factory in Schuylkill County Pennsylvania. In August, 1917, the parties entered into a written contract whereby the plaintiffs, shirt cutters undertook to ship the defendants, shirt finishers, a given number of shirt cuttings by the first of the next month, and monthly thereafter a number of cuttings equal to the defendants' finishings of the preceding month, and the defendants undertook to make the same into shirts. Both parties duly embarked upon the contract. Later, a rising market and congested freight conditions disturbed its performance. The manufacturers did not furnish cuttings in each month equal to the contractors' finishings of the preceding month, and the contractors did not finish shirts in each month in the number they had agreed to do. Thereupon each charged the other with breach of the contract. The manufacturers sued. On the contract as interpreted by the court, verdict was directed and judgment entered for the defendant contractors. The plaintiffs sued out this writ of error.

The matter under review concerns the interpretation of the contract. Its material clauses-- with their controlling provisions italicized by us-- are as follows:

'2. The contractor (defendants) shall devote the factory building owned by them and the machinery contained therein exclusively to the manufacture of shirts for the manufacturers (plaintiffs) giving them the entire output of said factory, which shall be not less than 800 dozen weekly during the period of this agreement. They shall do no work whatsoever for any other concern, nor sell, assign, lease or sublet said factory or any rights that they may have to said factory.'

'3. The manufacturers shall ship to the contractor not less than 3,000 dozen cut shirting material before the 1st. day of Sept., 1917. After that date they shall make to the contractor shipments of cut material every month in quantity equal to the amount of finished goods received by them from the contractor during the preceding month.'

'13. In case the manufacturers ship the contractors less than at the rate of 800 dozen a week, the contractors shall be entitled to receive eight cents per doz. for the deficiency.'

In looking for the meaning of this contract we are controlled by no novel rules of interpretation. The cardinal rule in every case is to ascertain the intention of the parties. The law presumes that the parties understood the import of their contract and that they had the intention which its terms express. When a contract is clear and unequivocal its meaning must be determined by its contents alone; another meaning cannot be added by implication or intendment; but where the language is ambiguous or susceptible of several significations, its meaning may be found in the subject matter, viewed in the light of the circumstances under which it was entered into. 6 R.C.L. 834-- 849; 13 Corpus Juris, 524.

If we had been the first called upon to interpret this contract we should have regarded its language as clear and unambiguous, and have construed it accordingly; but as the contract has been submitted to another court, where, between counsel and the court, it has given rise to three radically different interpretations, we must assume that its language is ambiguous and is susceptible of different meanings.

At the trial the plaintiffs' view of the contract was that after getting under way, their obligation to supply the defendants with cuttings was fixed by the amount of the defendants' finishings of the preceding month, as the contract expressly provided, but that, failing in any month to supply cuttings equal to finishings of the preceding month, they were entitled to credit the deficiency with cuttings supplied in any previous month in excess of the contract requirement. By this construction the plaintiffs would be exonerated of a breach under the facts which show that their short deliveries for several months would, if credited with the excess of previous deliveries, arise to substantially full deliveries for all months.

The construction urged by the defendants was that the plaintiffs were obligated to make an initial shipment of 3,000 dozen cuttings, and that, thereafter, in addition to making deliveries of cuttings in every month equal to the defendants' finishings of the preceding month as provided by the express terms of the contract, the plaintiffs were required to maintain, either in the defendants' factory or in transit, at all times, a reserve, or, as they termed it, a 'water level' of 3,000 dozen cuttings,-- the number which the plaintiffs were required to deliver initially.

The court's view of the contract was that there were really two undertakings of the plaintiffs, one including the other.

'The one, which may be called the master obligation, was to keep the defendants supplied with sufficient material to enable them to meet their obligation to turn out a minimum of 800 dozen shirts per week; their other was subsidiary to this, and intended not to qualify or lessen it but to give practical assurance that it would be met.'

We...