STANDARD LUMBER & MANUFACTURING CO. v. Johnstun

• Court: U.S. Court of Appeals — Ninth Circuit
• Writing for the Court: ORR, MERRILL and KOELSCH, Circuit
• Citation: STANDARD LUMBER & MANUFACTURING CO. v. Johnstun, 285 F.2d 301 (9th Cir. 1960)
• Decision Date: 29 December 1960
• Docket Number: No. 16818.,16818.
• Parties: STANDARD LUMBER & MANUFACTURING COMPANY, a corporation, Appellant, v. Jess JOHNSTUN, Leola Johnstun, Theron Johnstun and Maxine M. Johnstun, Appellees.

285 F.2d 301 (1960)

STANDARD LUMBER & MANUFACTURING COMPANY, a corporation, Appellant, v. Jess JOHNSTUN, Leola Johnstun, Theron Johnstun and Maxine M. Johnstun, Appellees.

No. 16818.

United States Court of Appeals Ninth Circuit.

December 29, 1960.

Jerome S. Bischoff, S. J. Bischoff, Portland, Or., for appellant.

Koerner, Young, McColloch & Dezendorf, James C. Dezendorf, Joseph Larkin, Portland, Or., Eddleman & Wheeler, William R. Eddleman, Seattle, Wash., for appellees.

Before ORR, MERRILL and KOELSCH, Circuit Judges.

ORR, Circuit Judge.

Appellant purchased six mining claims from appellees and later brought an action for rescission, alleging it had been defrauded. The trial court found no actionable misrepresentations had been made and denied appellant relief. The solution of this appeal falls into the well settled rule that if there is substantial evidence to support the trial court's findings we must affirm them. We find such substantial evidence in the record.

Appellees sold appellant six mining claims with the timber situate thereon. In asking for rescission appellant attempts to paint a picture of a slick promoter taking the trusting representative of a gullible business man out into the timber land and pointing out a fine growth of timber on land not belonging to the seller. As we read the record the picture which appellant endeavors to portray fades and another emerges; it is that of a shrewd lumber company executive who takes precautions and employs and sends to inspect the property men who are experts in appraising timber and eminently qualified to determine land locations and boundaries, with the means at hand to make such determinations, had they cared to utilize them.

The events surrounding the sale to appellant were the subject of conflicting testimony. William M. Elwood, a timber scout for appellant, learned that Dwight Johnson (hereinafter "Dwight"), appellees' agent, had some timber for sale and asked to see it. Dwight took Elwood out to inspect the claims, taking him to a blazed stump; this stump had been pointed out to Dwight by one Bratz as being the center line corner of the Cammeo claim at or about the time appellees purchased the claims in January of 1955. Elwood was highly impressed and reported favorably to John S. Pankratz, President of appellant company. Mr. Pankratz engaged Ross Ensley, a consultant forester, to appraise the claims and cruise the timber (a process whereby the total amount of timber on a claim is estimated by examining a representative strip). On December 8th, Dwight took Ensley and Elwood to what was supposed to be the Cammeo claim, again pointing out the blazed hemlock stub. Dwight testified that he told Elwood and Ensley that this was the place pointed out by Mr. Bratz as the line but that he (Dwight) had been unable to find anything to confirm it. Dwight further testified that he did not point out any timber as being the timber for sale, that he told them that Bratz had said this was the general area but that "we had not had it surveyed and to my knowledge it hadn't been surveyed since the patent in 1905 or '06." It is admitted that Dwight accompanied Ensley as he cruised a 66' strip through the surrounding Douglas Fir, and that Dwight at no time informed either Ensley or Elwood that appellees had told him and a Mr. Allen that the latter's surveyor had said the true Cammeo claim was farther east in much poorer timber. On the other hand, Ensley admitted that he asked Dwight to point out the side corners and that Dwight said neither he nor anyone else had been able to find these legal corners, and they proceeded to look for the corners in the location where they should have been and were unable to find them. Ensley testified that there were blazed lines near the location where the corners should have been which Dwight said were the intersecting claim lines; however Ensley also testified that there were blaze lines all through that area.¹ While Dwight, Elwood and Ensley were looking over the property Dwight had in his possession a mineral map, but Ensley testified that Dwight kept it pretty much to himself and didn't make it very available while they were in the field. The mineral map depicted a mineral monument nearby, and Ensley testified that he could have used a process called "offsetting" to locate the true corner of the Cammeo claim sufficiently to reveal that the purported center line was much too far west; however, he said that this would have taken considerable time, especially since there was deep snow. Ensley also admitted: (1) that he could have gotten field notes from the U. S. Department of Land Management at Spokane and conducted a survey in three days, which would have revealed the true location of the Cammeo claim; (2) that he could have obtained information with respect to the location and description of the section corners and quarter-corners at the King County Courthouse nearby, and once having found the quarter-corner he could have certainly oriented himself; and (3) that he knew he could inquire of the Forest Service people in charge of a particular area as to the location of quarter-corners and usually obtain helpful information from them. Ensley said the reason he did none of these things was that he was only hired to cruise the timber, and not to survey the claims or check to determine whether this was the correct location. However, Mr. Pankratz, appellant's President, testified that he expected Ensley to verify the location of these claims and he relied on Ensley to determine the location, though he also stated that they relied on Dwight to point out the correct starting point.

Upon receiving Ensley's favorable report appellant purchased the six claims for $50,000. In the spring of 1956, after the snow melted, appellant employed Ensley to survey in a logging road so that the timber could be removed. Dwight was to assist in locating the corners. Ensley testified that he became suspicious of Dwight's attitude and conduct and caused a...