The construction given to a contract by this Court is either
authoritatively controlling or conclusively persuasive in a
subsequent suit between the same parties, and so
held that
the contentions relied on in this case as to the contract
heretofore construed in
United States v. Harvey Steel Co.,
196 U. S. 310,
are, in the light of that decision, so frivolous that the judgment
of the Court of Claims following it should be affirmed without
further argument.
United States v. Harvey Steel Co., 196 U.
S. 310, followed to effect that the government is liable
for royalties on the Harvey process even though every element
thereof was not used on the plates involved in this action, and
even though the contractor furnishing the plate and who used the
process by permission of the United States was not specifically
required to use it.
46 Ct.Cl. 298 affirmed.
The facts, which involve the construction of a contract with the
United States for use of a steel hardening process and the effect
of the prior construction thereof by this Court in a suit between
the same parties, are stated in the opinion.
Page 227 U. S. 166
MR. CHIEF JUSTICE WHITE delivered the opinion of the Court.
These appeals are from a judgment in favor of the Harvey Steel
Company and against the United States for $123,467.23. This was the
amount of royalty found to be due to the Harvey Steel Company under
a contract, dated April 12, 1893, to pay royalty on all armor plate
treated by the Harvey process and used by the United States. The
armor plate under which the royalty in question was allowed was
manufactured for the United States under four contracts with the
Midvale Steel Company. 46 Ct.Cl. 298. The Midvale Steel Company,
for the protection of its interests under the contracts, was
permitted to intervene, and it was also allowed to appeal from the
judgment. The case is before us on a motion to affirm under
paragraph 5 of Rule 6.
The questions for decision involve the construction of the
contract between the United States and the Harvey Steel Company. As
the meaning of that contract was passed upon by this Court in a
previous case between the same parties (
196 U. S. 196 U.S.
310), and the construction then given to the contract is here
either authoritatively controlling or conclusively persuasive, we
recur to that case and what was decided in it as the most direct
means of not only analyzing and disposing of the issues here
presented for decision, but, moreover, of causing it to be apparent
that whatever may have been the original force of the contentions
relied on, they are, in the light of the previous decision, "so
frivolous as not to need further argument."
Following tests of armor plate treated by the Harvey process, an
option was given to the government at the request of the Navy
Department, for the purchase of the right to use the process upon
vessels the construction of which had at that time been authorized
by Congress. The
Page 227 U. S. 167
option was given on March 3, 1891, and the patent for the
process -- No. 460,262 -- did not issue until September 29, 1891.
The Harvey Steel Company, appellee, became the owner of the patent
on October 7, 1891. The process was defined in the patent as
follows:
"1. The herein-described method of producing a decrementally
hardened tenacious armor plate, which consists of enclosing a low
steel plate between a mass of noncarbonaceous material on one side
and a mass of granular carbonaceous material firmly packed upon the
other side, contained in a compartment formed within the heating
chamber of a suitable furnace, and in maintaining the said heating
chamber for a predetermined period of time at a temperature above
the melting point of cast iron, and in subsequently chilling said
plate, whereby a stratum of steel of prescribed thickness upon the
side of the plate against which said carbonaceous material has been
pressed is made to acquire a heterogeneous crystalline structure
and a condition of excessive hardness upon its exposed surface and
a condition of gradually diminishing hardness as the depth from
said surface increases."
After further tests, the United States entered into an agreement
on March 21, 1892, with the Harvey Steel Company, to purchase the
right to employ the Harvey process in Harveyizing -- as it is
sometimes called -- the armor for twelve designated vessels.
Subsequently, on October 8, 1892, the Harvey process was definitely
and formally adopted by the Navy Department, and, as said in the
opinion in 196 U.S. p.
196 U. S. 314,
in pursuance of the contract of March 21, 1892, "the Navy
Department required and received from Harvey a revelation of the
secret processes and improvements" used in the treatment of armor
plate by the Harvey process. Subsequently at the request of the
United States, the contract of March 21, 1892, was abrogated, and
in its stead a contract was entered into on April 12, 1893. By this
contract, the United States was
Page 227 U. S. 168
granted the right to use for the treatment of armor plate for
its vessels the "Harvey process" and any and all improvements made
by the Harvey Steel Company upon such process, and to use and
employ the armor plates manufactured according to said process. The
United States agreed to pay the Harvey Steel Company a royalty of
1/2 cent per pound on the finished plate.
The case in 196 U.S. was brought to recover royalties alleged to
be due to the Harvey Steel Company under the contract of April 12,
1893, calculated on the weight of armor supplied to the United
States by the Bethlehem Iron Company and the Carnegie Steel
Company. The Harvey Steel Company obtained judgment in the Court of
Claims, and that judgment was affirmed by this Court. The questions
presented and decided were (a) whether, under the contract of 1893,
the United States could set up the invalidity of the patent as a
defense, and (b) whether the United States ought to have been
allowed to show that it had not used the patent, properly
construed, although it had used "the process communicated to it,
and known in common speech as the Harvey process." After answering
the first of these propositions in the negative, the Court came to
consider the claim asserted under the second proposition,
viz.:
"That, at the time of the contract, it was supposed that the
heat required for the process was greater than that actually used,
that the patent was valid only for a process with the greater heat,
and that the contract covers no more than the patent."
In deciding against this contention, the Court said (p.
196 U. S.
317):
"But the fact that the parties assumed that the process used and
intended to be used was covered by the patent works both ways. It
shows that they thought and meant that the agreement covered and
should cover the process actually used. We think that this can be
gathered from the agreement itself, apart from the mere supposition
of the parties. The contract dealt with a process 'known as
Page 227 U. S. 169
the Harvey process.' It imported the speech of the parties and
the common speech of the time into the description of the subject
matter. The words, Harvey process, commonly are put in quotation
marks in the first contract, thus emphasizing the adoption of
common speech. They mean the process actually used. The contract
states that it is dealing with the same thing that had been the
subject of the former agreement. That agreement further identified
that subject as a process which was tested at the Naval Ordinance
Proving Ground. It also identified it, it is true, as a patented
process; but, if the incompatibility of the two marks is more than
trivial, as it was regarded by the court which found the facts with
which we have to deal, the identification by personal familiarity
and by common speech is more pungent and immediate than that by
reference to a document couched in technical terms which the very
argument for the United States declares not to have been
understood. It is like a reference to monuments in a deed. As we
have said, this identification by personal experiment and by common
speech is carried forward into the contract in suit. The latter
contract manifests on its face that it is dealing with a process
actually in use, which requires the communication of practical
knowledge, and which further experience may improve."
In concluding the opinion it was observed (pp.
196 U. S.
318-319):
"But the fuller the statement should be made, the more fully it
would appear that the United States was dealing with a matter upon
which it had all the knowledge that anyone had, that it was
contracting for the use of a process which, however much it now may
be impugned, the United States would not have used when it did but
for the communications of the claimant, and that it was contracting
for the process which it actually used -- a process which has
revolutionized the naval armor of the world. "
Page 227 U. S. 170
This decision plainly refutes the contention now again urged,
that the Harvey process of the contract of 1893 is limited and
strictly confined to the method of the patent, and it is here
controlling. Furthermore, in no possible view do the findings in
the present case present facts which even suggest the possibility
of a different construction of the contract than that heretofore
given. Those findings may be thus summarized: the method described
in the patent for "producing a decrementally hardened tenacious
armor plate" consisted in
"enclosing a low steel plate between a mass of noncarbonaceous
material on one side and a mass of granular carbonaceous material
firmly packed upon the other side, contained in a compartment
formed within the heating chamber of a suitable furnace,"
etc. The noncarbonaceous material actually used in the "Harvey
process" consisted of sand packed at the back of the plate to
protect the same from the carbonaceous material and excessive heat,
of which the government was advised by the patentee by an
exhibition of the process with the use of sand prior to the
contract of April 12, 1893.
The use of sand was gradually discontinued because the same
result could be accomplished without it, and some of the companies
manufacturing plates were so advised late in 1893. Since 1904, no
sand or other noncarbonaceous material has been used by the
Carnegie and Bethlehem companies manufacturing armor plate.
The process used by the Midvale Steel Company in the manufacture
and production of armor plate was as follows: the plate to be
carbonized was mounted, face up, on brick piers about 18 inches
high, resting on the car bottom, about 1 foot apart. A row of
bricks, 2 high, was then placed around the plate, and the
carbonizing material was put inside of these bricks on the face of
the plate, and raised about three fourths of an inch above the
bricks. Mortar was edged up on the second bricks. Then the
Page 227 U. S. 171
second plate was placed on the carbonizing material, face down.
The plates were then run into the furnace, and the fire
started.
The brick box containing the carbonaceous material prevented the
same from reaching the back and sides of the plates, thus
accomplishing the same result as with the sand which was used to
protect the back of the plate from the carbonaceous material and
excessive heat, as aforesaid.
The contention of the appellants on this branch of the case was
thus stated by the court below in its opinion:
"In the present case, the contention of the defendants and the
intervener is that in the hardening or Harvey process referred to,
one of the elements required was the use of sand, a noncarbonaceous
material packed in the back of the plates, and that, if not so
used, it cannot be contended that the Harvey process was applied by
the Midvale Steel Company in the process which it used in hardening
the plates under its several contracts with the United States,
though in other respects it concedes that the Harvey process was
substantially used. Its contention is that it did not use sand.
That is to say, that it accomplished the same result without, as
had been accomplished with, sand, and it may be added that the same
result was accomplished without the use of any noncarbonaceous
material in the back of the plates by confining the carbonaceous
material within the brick box, as set forth in the findings."
In view of the construction given to the contract of 1893 by the
previous decision, we are of opinion that the court below did not
err in deciding as it did that the circumstance that sand was used
in the back of the plates in the various tests made by the
government to which reference has been made, and was also employed
in the treatment of the armor plate which was the subject of the
suit decided in 196 U.S. while in the treatment of the armor plate
involved in this suit neither sand nor any
Page 227 U. S. 172
other noncarbonaceous material was packed on the side of the
plate which was not to be carbonized, did not entitle the United
States to claim that the Harvey process of the contract of 1893 was
not used. As said by the court below, the government received all
it had bargained for, since it was not only entitled by the
contract to a disclosure of the inventor's process, but to his
instructions and assistance in the practical application of the
patent, and was at liberty to use the process, little or much, in
whole or in part.
The unsoundness of the remaining contention becomes apparent
from its mere statement. The proposition is that even although the
armor plate made for the United States by the Midvale Steel Company
was hardened by the Harvey process, the obligation to pay royalty
as to such armor does not exist because the United States had not,
by its contracts with the Midvale Company, specifically required
that company to use the Harvey process. But, under the terms of two
of the contracts with the Midvale Company, that company was
permitted to use the Harvey process if desired, while under the
other contracts, the process used was required to be satisfactory
to the Navy Department, and under all the contracts the United
States had the right to inspect the process used. Under the
contract of April 12, 1893, the right was conferred upon the United
States to use and employ the
"aforesaid 'Harvey process' in the treatment of armor plates for
vessels which have been, since July 18, 1892, or which may
hereafter be, authorized by Congress, and to use and employ armor
plates for such vessels manufactured according to such process,
paying therefor to the party of the first part the royalty of
one-half of one cent per pound of the finished plate."
We think the plain meaning of the contract was that the
government should pay royalty when it used armor plate treated
according to the Harvey process of the contract.
Affirmed.