Pressed Steel Car Co. v. Eastern Ry. Co.

121 F. 609, 57 C.C.A. 635, 1903 U.S. App. LEXIS 4643
CourtCourt of Appeals for the Eighth Circuit
DecidedMarch 23, 1903
DocketNos. 1,802, 1,803
StatusPublished
Cited by67 cases

This text of 121 F. 609 (Pressed Steel Car Co. v. Eastern Ry. Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pressed Steel Car Co. v. Eastern Ry. Co., 121 F. 609, 57 C.C.A. 635, 1903 U.S. App. LEXIS 4643 (8th Cir. 1903).

Opinion

SANBORN, Circuit Judge,

after stating the case as above, delivered the opinion of the court.

The grave question in this case is whether the Pressed Steel Car Company agreed to pay the railway company the liquidated damages stipulated in the contract during the time it was delayed in delivering its cars by the unavoidable contingencies named in the agreement, and that question must be determined by a fair construction of the contract.

The purpose of a written agreement is to evidence the terms upon which the minds of the parties to it meet when they make it. Hence the true end of all contractual interpretation is to ascertain that intention, and when it is found it prevails over verbal inaccuracies, inapt expressions, and the dry words of the stipulations. The court should, as far as possible, put itself in the place of the parties when their minds met upon the terms of the agreement, and then, from a consideration of the writing itself, its purpose, and the circumstances which conditioned its making, endeavor to ascertain what they intended to agree to do — upon what sense or meaning of the terms they used their minds actually met. Accumulator Co. v. Dubuque St. Ry. Co., 64 Fed. 70, 74, 12 C. C. A. 37, 41, 42; City of Salt Lake v. Smith, 104 Fed. 457, 462, 43 C. C. A. 637, 643; Fitzgerald v. First National Bank, 52 C. C. A. 276, 284, 114 Fed. 474, 482.

The intention of the parties must be deduced from the entire agreement and from all its provisions considered together, because, where a contract has many stipulations, it is plain that the parties understood and agreed that their intention was not expressed by any single part or provision of their agreement, but by every part and stipulation, so construed as to be consistent with every other part and with the entire contract. Jacobs v. Spalding, 71 Wis. 177, 189, 36 N. W. 608; Boardman v. Reed, 6 Pet. 328, 8 L. Ed. 415; Canal Co. v. Hill, 15 Wall. 94, 21 L. Ed. 64; O’Brien v. Miller, 168 U. S. 287, 297, 18 Sup. Ct. 140, 42 L. Ed. 469.

Where the language of an agreement is contradictory, obscure, or ambiguous, or where its meaning is doubtful, so that the contract is fairly susceptible of two constructions, one of which makes it fair, customary, and such as prudent men would naturally execute, while the other makes it inequitable, unusual, or such as reasonable men would not be likely to enter into, the interpretation which makes it a rational and probable agreement must be preferred to that which makes it an unusual, unfair, or improbable contract. Coghlan v. Stetson (C. C.) 19 Fed. 727, 729; Jacobs v. Spalding, 71 Wis. 177, 186, 36 N. W. 608; Russell v. Allerton, 108 N. Y. 288, 292, 15 N. E. 391.

Let us consider the agreement of these parties in the light of these familiar canons of interpretation. The stipulations of the contract [612]*612material to the determination of the question before us are that the car company undertook to deliver 400 cars to the railway company—

“On or before April 1st, 1900, * * * subject to delays in the delivery of materials to be used in these cars, other than the first party’s manufacture, and to strikes, fires, delay of carriers, or other unavoidable contingencies beyond the control of said first party. But it is agreed that in the event of the failure of the party of the first part to make and deliver the cars aforesaid within the time specified, then .it shall forfeit and pay to the party of the second part as liquidated damages consequent upon such failure the sum of five dollars per day for each and every car so delayed after the said April 1st, 1900.”

The parties evidently contemplated and provided in this; agreement for two classes of delays, those that might be caused by the unavoidable contingencies described in the contract, and those that might result from the default or negligence of the car company. For the purpose of reducing the agreement to its lowest terms and of facilitating the discussion, the former will be termed excusable, and the latter inexcusable, delays; the liquidated damages of $5 per day will be termed demurrage; and it will be assumed that there were both excusable and inexcusable delays in the performance of the contract. The agreement then becomes a contract by the car company to deliver the cars on or before April 1, 1900, subject to excusable delays, and to pay the railway company demurrage for a failure to deliver them within “the time specified”; and the question is, when was “the time specified,” within which a failure to deliver subjected the car company to the liquidated damages? Was it the time between the date of the agreement and April 2, 1900, or was it the time between the date of the agreement and the expiration of the postponement of the time of delivery caused by the excusable delays ? Counsel for the car company insist that it was the latter, because that, as they say, is the obvious meaning of the terms of the agreement, because the word “so,” before “delayed,” points in that direction, and because that interpretation makes the agreement equitable and reasonable, while the opposite construction renders it unconscionable and improbable. On the other hand, counsel for the railway company as earnestly contend that the former is the true construction, because, as they insist, that is the evident sense of the plain words of the contract, because when the agreement was made the railway company needed the cars for actual Use in the transportation of ore as soon as April 1, 1900, when the season for using them opened, because every day’s delay in their delivery entailed a great and irreparable loss upon the railway company, and while it was willing to bind itself to accept the cars after April 1, 1900, during the postponement of delivery by the excusable delays on the condition that the car company would contract to pay demurrage during that time, it would never have made the agreement without such a stipulation, because the word “but,” which introduces the stipulation for demurrage and expresses antithesis, and the words “after the said April 1st, 1900,” at the close of the damage clause, sustain this view, because it cannot be supposed that the parties contemplated a breach of the contract, and stipulated damages for such a breach, and be[613]*613cause the only “time specified” in the writing yas the time on or before April i, 1900.

To the counsel of each of these parties this contract seems plain and unambiguous, and its meaning certain, and yet it has an entirely different signification to the representatives of each of these corporations. This fact, repeated perusals, and a careful study of the writing present very convincing evidence that its terms are not altogether clear, that they were well calculated to raise this controversy, and that they are susceptible of two constructions. It remains to determine which is the more natural, probable, and rational interpretation.

There is no evidence in the record that either of the two interpretations urged upon our consideration would have deterred either of the parties from entering into the agreement. What they intended to stipulate, what they understood the contract to mean, and what they would have done if their interpretation of it had been different, can be deduced only from the contract itself, the situation of the parties, and the circumstances surrounding them when they made it.

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Bluebook (online)
121 F. 609, 57 C.C.A. 635, 1903 U.S. App. LEXIS 4643, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pressed-steel-car-co-v-eastern-ry-co-ca8-1903.