Pressed Steel Car Co. v. Union Pac. R. Co.
297 F. 788
2d Cir.
1924
Check Treatment
HOUGH, Circuit Judge

(after stating the facts as above). The substance of plaintiff’s contention is that all the cars above referred to furnish iten* of damage properly assignable to its second cause of action. 270 Fed. 522. This court held, when the case was here before, that the contract meant that, when defendant wanted cars embodying plaintiff’s patented devices, or any of them, plaintiff was entitled to bid, and to bid in a way that was not “good business,” viz. to take the work if it was wanted, at the lowest bid made plus 10 per cent. But we did not hold that, if plaintiff had an opportunity to bid and refused or. neglected to do anything in the premises, it could then wait until the work was done by others, and sue for damages wrought by its not doing what it had had opportunity to do, but had refused.

*790'The contract is not easy of interpretation, which means the process of applying to the words or symbols used the ordinary legal Standard, to determine their sense. Williston, Cont. § 602. It is not easy, because ordinary business sense hesitates to accept, as the meaning of the parties, what some of the words and phrases signify according to the rules of grammatical construction. So much was intimated by Ward, J., in writing our opinion in 270 Fed. 518. But, since the meaning of any contract is to be primarily derived from the words used by the parties, however ill suited or badly chosen they may seem to judicial or other critics, we adhere to our previous ruling that when no opportunity of bidding was given plaintiff by defendant, a cause of action arose for damages, if and when plaintiff showed it was ready, able, and willing to do the work; further, that damnum was addedffo the injuria when, and if, plaintiff proved that it would have made profit by doing said work. In respect of the 700 work cars, plaintiff showed below that it was entitled to recover in accordance with the above ruling, and no error is perceived in respect of the judgment in this regard.

But there is a secondary rule (Williston,' Cont. § 623) that interpretation may be given to a contract by the acts-and/or declarations of the parties, done or made while the agreement is in process of fulfillment, and before any differences have arisen-between them, to which “mutual’interpretation” (as Dean Wigmore has called it) courts strongly and properly incline to give effect. There' is room for applying this secondary (and always secondary) method to the situation presented by the 200'gondola cars, and we think it overwhelmingly proven that, as found below, the mutual interpretation given by the parties to this contract was that, when plaintiff had an opportunity to bid and did not avail itself of the same, both parties assumed and in effect agreed that plaintiff was to get royalties and nothing else.

This rule of mutual understanding must always be carefully subordinated to the primary rule of compelling parties to live up to what they have chosen to write, and is not to be confounded with attempts to vary a contract by parol, and this may be accomplished by stressing the mutuality of thp interpretation acted on by the contractors. It is nothing against this rule that sometimes the result is a finding equivalent to holding that the parties made a new contract, or modified the pre-existing one. Williston, supra. See, also, on the propriety of adopting the practical interpretation of parties, Sanders v. Munson, 74 Fed. 649, 20 C. C. A. 581; Lowry v. Hawaii, 206 U. S. 206, 223, 27 Sup. Ct. 622, 51 L. Ed. 1026; Nelson v. Ohio, etc., Co., 188 Fed. 620, 112 C. C. A. 394; Guaranty Co. v. Koehler, 195 Fed. 679, 115 C. C. A. 475; and the citations in Williston, § 623. No error was made in ruling as to the 200 gondola cars.

«As ’ to the automobile cars, the finding below was as recited1 in our statement of facts. The facts as found bind us, and on them we see no reason to elaborate our decision as made in 270 Fed. at page 525, viz. that on “cars built after the expiration of the patent” relied on no royalties accrued. As for damages, the plaintiff had an opportunity to bid, and refused or neglected so to do; and therefore the ruling as to-gondola cars applies.

*791Finally, we decline to certify to the Supreme Court the question as to the admissibility of prior art in patent license cases. The opinion of this court on that subject has been often recorded, we treated of it in our previous decision, and, whatever may be the ultimate ruling in the highest court, we are “not in doubt about the specific question.” Sigafus v. Porter, 85 Fed. 689, 29 C. C. A. 391.

Judgment affirmed, without costs.