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UNITED STATES v. HARVEY STEEL COMPANY. MIDVALE STEEL COMPANY V. HARVEY STEEL COMPANY.

decided: February 3, 1913.

UNITED STATES
v.
HARVEY STEEL COMPANY.

MIDVALE STEEL COMPANY
v.
HARVEY STEEL COMPANY.



APPEALS FROM THE COURT OF CLAIMS.

Author: White

[ 227 U.S. Page 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. Cls. 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. 310) and the construction then given to the contract is here either authoritatively controlling 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

[ 227 U.S. Page 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 inclosing 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. 314, in pursuance of the contract of March 21, 1892, "the Navy Department required and received from Harvey a revelation of the secret process 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

[ 227 U.S. Page 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 one-half 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 the contract was made 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. 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 ...


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