equal in quality, if not better, as our own sugar here. On those bases I went out and sold the sugar." [1] Plaintiff insists that this evidence should not have been received; that the contract was clear and unambiguous without it. There is a great difference between the admissibility of extrinsic evidence to explain that which is written and the admissibility of such evidence to contradict that which is written. Likewise there exists a difference between a contract of sale and a memorandum of sale. Williston on Sales, vol. 1, p. 168. The former is a complete statement of the agreement of the parties. A memorandum is understood to be a note or a minute informally made of the agreement. Naturally there is much more likelihood of ambiguity lurking in a memorandum than in an agreement. And this is particularly so where the memo deals with a commercial transaction respecting which trade-names and customs have arisen. [2] It is elementary that, where a party seeks to deny the plain import of a writing which reveals no uncertainty in meaning even when viewed in connection with the circumstances of its making, the rule of substantive law, which declares that all prior extrinsic matters are merged in the writing, governs; but, where he seeks merely to explain that which is imperfectly expressed, the rule of merger is not violated by the introduction of explanatory or clarifying oral testimony. The difficulty of applying these rules to the facts in the instant case arises out of the difference in contentions that are made respecting the agreement. Plaintiff contends that the term "standard white granulated sugar" is defined by the paragraph entitled "Guarantees." In other words, many cases are cited to support the position that where parties agree that the quality of a thing sold shall be determined by a particular person holding a particular position such determination is conclusive. Likewise, where parties deal with reference to a particular market, they will be conclusively presumed to have dealt according to the known general customs and usages and trade phraseology of that market whether known or not. These contentions may well be conceded. It may be that defendant could not repudiate nor question the certificates of the Hong Kong government (except for fraud, collusion, etc., not here present), provided such certificate followed the language of the contract. Nor can defendant urge that the cus toms and usages of the Hong Kong government did not apply, provided his contract made such customs and usages a part thereof. But we are confronted with a matter of phraseology-the meaning of trade-names. This is well illustrated by the certificates furnished. These certificates are not in the language of the contract. First, the word "standard" is omitted. Then the expression "Java 24" is added, and finally "Polarization 98.5 %" is added. What do they mean? Without explanation they are nonunderstandable to those not familiar with the sugar trade. Plaintiff offered evidence to explain "Java 24." Both parties offered some evidence to explain "Polarization 98.5%," and also the polarization percentage when sugar is refined in the United States-99.5 per cent. or better. In construing this contract we should not confuse the second and fourth paragraphs of the memorandum. They deal with different subject-matters. The fourth deals with the subject of "Guarantees." A certificate by the Hong Kong government respecting quality and net shipping weight is required. But what quality? The fourth paragraph does not define the quality. Quality, as here used, refers to the subject-matter, sugar, and the grade thereof, as defined by paragraph 2. The oral testimony shows conclusively that the term "Standard White Granulated Sugar" means one thing in America, the same thing in certain foreign countries, and another thing in other foreign countries. What "Standard White Granulated Sugar" was intended? Surely it was not left for the Hong Kong government agency to determine. There is some evidence that in Hong Kong some Java sugar is received and there refined as in the United States. Doubtless the amount of such sugar is small compared to the amount that is not refined. Yet its existence only emphasizes the ambiguity of this term. [3] Applying the foregoing observations to the case at hand, it is apparent that we have a clear case of latent ambiguity. 4 Jones, Com. on Evidence, §§ 1542, 1545. For a situation is disclosed where one term applies to two different articles of merchandise, or rather to different grades of an article of merchandise. There being a latent ambiguity, parol evidence should be received to explain it i. e., identify the grade of article intended (Jones, Com. on Evidence, § 1544)—unless in doing so other provisions of the agreement are contradicted (Jones, Com. on Evidence, § 1545). [4] In other words, parol evidence to explain 24 F.(2d) 15 er's agent agreed as to the meaning of the meaning of "standard white granulated er's agent agreed as sugar" was receivable, unless that term is specifically defined (expressly or by implication of law) by the fourth paragraph of the contract. Does this paragraph define the commodity sold? It deals with "guarantees." This term as here used is somewhat ambiguous. If used in its strict sense, it indicated that the paragraph dealt with the subject of guaranty. A reading of the paragraph, how ever, shows that no one was guaranteeing quality or weights. It cannot be seriously argued that the Lloyds or the Hong Kong government were to execute a guaranty on behalf of the sellers. Rather does it seem to us that this paragraph called for certificates which were to set forth what the inspection disclosed as to weights and analysis of the sugar. If any other construction were given it, then plaintiff utterly failed to produce the guar- SANITARY REFRIGERATOR CO. v. WINanty called for. Our conclusion is that the fourth paragraph of this contract did not define the article "standard white granulated sugar," but that the two paragraphs should be read together. In other words, paragraph 4 called for a certificate which defined the quality, net shipping weight, and analysis of the sugar which plaintiff imported. Whether it was the article purchased was another question, determinable only by paragraph 2, which in turn was clarified and made certain as to its meaning by the testimony of the two parties who negotiated the sale, both of whom testified to a common understanding of the meaning of "Standard White Granulated Sugar." Plaintiff further contends that its broker had no authority to guarantee the quality of the sugar sold. Ignoring for the moment the question of the implied authority of an agent authorized to sell such an article as sugar to warrant its quality, there are two answers to plaintiff's contention. First, if the broker had no authority to sell the article upon which the minds of the parties met, then no binding contract was made; second, the evidence here received bore, not upon warranty, but merely threw light on the meaning of a trade term possessing a plurality of meanings, and which was not understandable, outside of the trade, until it was explained by such oral testimony. [5] There remains but one further question, the disposition of which calls for an examination of certain evidence to ascertain whether a jury question was involved as to the meaning of the term used. The testimony of the three witnesses was quoted to show that the broker representing the plaintiff and the buy TERS et al. Circuit Court of Appeals, Seventh Circuit. Rehearing Denied March 6, 1928. No. 3935. 1. Patents 328-1,385,102, claims 1, 2, 3, 4, 7, for latch, held not novel in location of keeper and lever or provision for automatic closing of door, but only in structural differences. Winters and Crampton patent, No. 1,385,102, claims 1, 2, 3, 4, 7, for a latch, held not novel in location of keeper on door jamb and lever on door, or provision for automatic closing of door without regard to position of lever, in view of Kiel patent, No. 564,448, Dent patent, No. 67,506, Charles patent, No. 702,185, Schrader patents, Nos. 1,117,709 and 1,170,685, and War patent, No. 1,250,736, but only in structural differences in keeper, latch member, or both. 2. Patents 328-1,385,102, claims 1, 2, 3, 4, 7, for latch, held infringed. Latch with keeper and latch member located similarly to structure covered by Winters and Crampton patent, No. 1,385,102, claims 1, 2, 3, 4, 7, and head formed with upper and lower curved outer sides coming substantially to a point as in such structure, held infringement of such patent, though lug is placed on near side of head of keeper having surface curved similarly to outer surface of head and adapted to contract with arm projecting from handled portion of lever. 3. Patents 165(1)-Valid, narrow claim, though strictly construed, should be defined in light of patentee's meaning and purpose of element in patented structure. While a valid, narrow claim will be strictly construed, its terms and expressions should not necessarily be limited to hard and fast defini tion, but language should be defined in light of meaning given it by patentee, with appreciation of purpose or object of element in patented structure. Appeal from the District Court of the United States for the Eastern District of Wisconsin. Suit by Alexander F. Winters and another against the Sanitary Refrigerator Compaer against the Sanitary Refrigerator Company. Decree for plaintiffs, and defendant appeals. Modified in part, and affirmed in part. See, also, 20 F.(2d) 671. E. Hayward Fairbanks, of Philadelphia, Pa., for appellant. Frank E. Liverance, Jr., of Grand Rapids, Mich., for appellees. Before ALSCHULER, PAGE, Circuit Judges. EVANS, and EVAN A. EVANS, Circuit Judge. A patent, No. 1,385,102, to Winters and Crampton, issued July 19, 1921, covering a latch, was the basis of the instant suit. Seven claims are involved, two of which (5 and 6) are broad, generic claims, while the other five (1, 2, 3, 4, and 7) are narrow, specific claims. The District Court sustained all claims, and found appellant to be an infringer thereof. Thereafter appellees brought suit upon this same patent in the District Court for the Eastern District of Pennsylvania, and the court there held that claims 5 and 6 of the patent were invalid and the other five claims were not infringed by latches similar to the ones made by appellant. Counsel, with commendable frankness, have made concessions in this court which greatly narrow the controverted issues. Appellant admits the validity of claims 1, 2, 3, 4, and 7, while appellees concede that claims 5 and 6 are invalid. The sole issue remaining, in view of these concessions, is one of infringement of the five valid claims. The concession that these five claims are valid was accompanied by the statement that validity was recognized only in view of an asserted construction which gave to each claim so narrow a field that infringement was not disclosed. The inventor said: "This invention relates to a latch of the swinging lever type, particularly adapted for use on refrigerators though applicable in many other relations where a door is to be closed and held in closed position. The swinging lever latch, or as it is better known, the Condit latch, is pivotally connected at one end to the door jamb or casing, allowing the door to be opened when the latch is thrown to an upper vertical position, and coming down across the meeting edges of the casing and door when swung to horizontal position, engaging with a cam member on the door to wedge the door tightly shut. This latch is a very serviceable latch but is relatively hard to operate due to its attachment to the casing instead of the door, and the same is liable to drop to horizontal position in which case the door cannot be closed without first raising the lever to upper vertical position while, many times, the door is inadvertently swung toward closed position and against the lever in its horizontal position with injury either to the lever or door or both. In the present invention, it is a primary object and purpose to provide a latch which may be pivotally connected to the door and which is automatically operated to engage with a retaining member or keeper fixed on the door casing when the door is closed irrespective of the vertical or horizontal position of the latch lever, working as well in the one case as the other. A further object of the invention is to construct a latch of few parts, whereby it may be economically made and which will be durable and efficient in service." Two typical claims are 1 and 7, herewith quoted: "1. In combination, a door and casing therefor, a keeper attached to the casing comprising a base, an outstanding post and a head at the outer portion of the post, said head depending below the post and formed with upper and lower curved outer sides coming substantially to a point and with an inner upwardly and inwardly inclined side, a member attached to the door comprising a base, an integral outstanding post projecting from the base and a laterally extending arm at the upper end of the post paralleling the base, and a latch lever pivotally mounted between its ends between the said arm and base of said member, said lever having one arm formed with an under cam side extending from the pivot and adapted to be engaged under the depending portion of the keeper, a handle portion extending in the opposite direction from the pivot and another arm projecting from the handle portion a distance from the pivot and lying substantially at right angles to the first arm of the lever and likewise being formed with an inner cam side, substantially as and for the purposes described." "7. In combination, a door and a casing therefor, a keeper attached to the casing, a latch lever pivotally mounted on the door between its ends, one end of the lever being 24 F.(2d) 15 formed into an operating handle and the other into a keeper engaging arm, a second arm projecting from the handle portion of the lever a short distance from its pivot and at an angle to the first arm, said keeper being formed at its outer sides for engagement with the respective arms when the lever is in horizontal and vertical positions, respectively, as the door is closed, to automatically operate the lever so that it will engage under the keeper when the door is entirely closed, substantially as described." While appellees conceded that claims 5 and 6 were invalid in view of the prior art, we would have no hesitancy in so finding in the absence of this admission. Whether the other claims are infringed depends entirely upon the position of the patent in suit in the art. No difficulty would be experienced in finding infringement if the patent were a pioneer or was one covering such an improvement as entitled it to a broad range of equivalency. But the patent does not occupy any such position. It is an extremely narrow one, as a reading of the claims at once discloses. Moreover, the record shows a prior art loaded with latches possessing some of the features of appellee's latch. [1] Describing appellees' latch, counsel say: "The latch is attached to the door of the refrigerator and the keeper for the latch is attached to the door jamb. The swinging latch of the patent in suit is an automatic latch acting to close and tightly close when the door is moved to shut it irrespective of the position the latch lever may have whether horizontal or level." The prior art as disclosed by the Kiel patent, No. 564,448, the Dent patent, No. 67,506, and Charles patent, No. 702,185, the Schrader patents, Nos. 1,117,709 and 1,170,685, the War patent, No. 1,250,736, all refute the contention of asserted novelty, in the location of the keeper upon the door jamb and the lever upon the door or in providing for the automatic closing of the door without regard to the position of the lever. It may be true that in some of these disclosures because of the law of gravity the lever invariably takes but one position. In the Dent patent, the keeper was attached to the casing while the member carrying the latch lever was attached to the door. In the Charles latch, the keeper was on the door while the other member was on the casing. The Kiel latch had its keeper on the casing and the latch member on the door. Each structure, examples of which are in 24 F. (2d)-2 evidence, works automatically when the door is slammed shut whether the latch lever is in a horizontal or a vertical position. It follows, therefore, that patentable novelty, if any exists, is restricted to the particular structure disclosed. What, then, is the novel structure? In nearly all of the cited prior art structures, the keeper member has a curved post against which a portion of the lever strikes when the door is swung. Patentees (claim 1) describe this portion of the keeper as "an outstanding post and a head at the outer portion of the post, said head depending below the post and formed with upper and lower outer sides coming substantially to a point." The keeper described in the Kiel patent is decidedly similar. The differences between appellees' lever latch and the prior art structures are more pronounced. Automatic operation is dependent upon the cooperation of the latch and the keeper. Consequently there naturally follow differences in the structural design of one member due to difference in structure of the other member. We repeat, then, that patentable novelty resides in the structural differences of the latches (either in the keeper member or the latch member or in both); that the claims are narrow and their validity is conceded. Our operation of the physical exhibits discloses a basis for the concession of validity. But it is this narrow field and nothing more which the inventor possessed when he secured his patent. [2] As thus analyzed, limited, and explained, are the claims infringed by appellant's latch? Appellant's structure has a keeper and a latch member located similarly to the appellees'. But it contends that both its keeper and its latch member differ from those of the patent. Its keeper does not have (so it says) "an outstanding post and a head at the outer portion of the post, said head depending below the post and formed with upper and lowto a point," nor does its latch lever have one er curved outer sides coming substantially "arm formed with an under cam side extending from the pivot and adapted to be engaged under the depending portion of the keeper." It supplies its keeper with a lug on the inner or door side and its latch lever is supplied with an arm extending from the pivot of the latch member, but such arm does not engage "the depending portion" of the keeper. Rather is it so constructed and so angled as to come in contact with the lug on the head of the keeper. It is this contact between the lug and the arm on the latch which causes the latch to automatically swing and lock when the door is slammed. Appellant's keeper, though supplied with "a head formed with upper and lower curved outer sides coming substantially to a point" does not, as in the patent in suit, make use of the curved upper sides to direct the movement of the latch when the door is shut. If the arm on its lever extended a little further, it would contact with the upper curved outer side portion of the head of the keeper. The precise question then is, Does appellant avoid infringement by placing a lug on the near side of the head of its keeper, the surface of which is curved similarly to the outer surface of its head and which is adapted to contact with the arm projecting from the handled portion of its lever? [3] Concede the existence of claims that are narrow and restricted to structural design only, yet even in such claims there must be some range of equivalency. Perhaps the expression "range of equivalency" is not a happy one, nor does it describe the thought as accurately as it should. Instead, it would doubtless be better to say that a valid claim should rarely, if ever, have its language construed with absolute literacy. While a valid, narrow claim will be strictly construed, it by no means follows that its terms and expressions should be limited to a hard and fast, unbending definition. Rather must the language of each claim be defined in the light of the meaning given it by the patentee, with an appreciation of the purpose and object of the element in the patented structure. To illustrate: Patentee speaks of a keeper with its base, its post, and its head. The latter member is described as having "upper and lower curved outer sides coming substantially to a point." In our effort to ascertain whether infringement occurred, we must define the head as well as the "sides of the head." Is the outside of appellant's lug a part of the side of the head of the keeper? Certainly it is a part of the head, and, in the light of the mechanics of the entire structure, the purpose it serves, we conclude that it is a part of the side of the head. The decree is modified in so far as it sustains the validity of claims 5 and 6 of the patent in suit and enjoins the infringement of said claims 5 and 6 and to the extent that appellant is directed to account for its gains and profits due to the infringement of said claims 5 and 6. Otherwise the decree is affirmed. The costs in this court shall be divided equally between the parties. AMERICAN SURETY CO. OF NEW YORK v. COVE IRR. DIST. Circuit Court of Appeals, Ninth Circuit. Rehearing Denied February 27, 1928. 1. Waters and water courses =230(4)=Transfer of irrigation district bonds with interest coupons attached, transferee repaying unearned interest, held compliance with statute (Rev. Codes. Mont. 1921, § 7214). Transfer of bonds of irrigation district, in which interest coupons remained on bond, not canceled, and unearned portion of them was cedure, under Rev. Codes Mont. 1921, § 7214, repaid to district by transferee, held proper prorequiring that irrigation district bonds should never be sold at less than 90 per cent. of value "and accrued interest thereon to date of de livery." 2. Waters and water courses 230(4)-Statute requiring irrigation district commissioner to fix date bonds may be issued held inapplicable to bonds issued under prior act (Laws Mont. 1921, c. 153; Laws Mont. 1923, c. 157). Provision of Laws Mont. 1923, c. 157, requiring commissioner of irrigation district to fix date bonds may be issued, held immaterial in consideration of bonds issued under prior act (Laws Mont. 1921, c. 153) containing no such requirement. 3. Waters and water courses 2281/2-Surety. in determining liability to irrigation district after contractor's default, could deduct interest from proceeds of sale of bonds, proceeds of which were payable to contractor. Where contractor agreed to accept irrigation district's bonds at intervals, repaying unearned interest, and afterwards agreed to sale of remaining bonds, future payments to be made in money, unearned interest to time of payment being refunded, less accrued interest on proceeds of sale of bonds, contractor's surety, after contractor's default, held entitled to deduction from liability of interest on proceeds realized from sale of bonds, to be subtracted from accrued interest to be allowed district. 4. Waters and water courses 22812-Agreement between irrigation district and contractor, incorporated after contractor's default in surety's agreement with other contractors, held to govern rights as to payment for completion of work. Where agreement between contractors and irrigation district, approved by contractor's surety, for sale of certain bonds, was made part of contract between surety and other contractors to complete work after original contractor's default, former agreement held to control rights of irrigation district and surety company in paying for completion of construction work. In Error to the District Court of the United States for the District of Montana; Charles N. Pray, Judge. |