Coquille Mill & Tug Co. v. Robert Dollar Co.

• Decision Date: 25 February 1930
• Citation: 132 Or. 453,285 P. 244
• Parties: COQUILLE MILL & TUG CO. v. ROBERT DOLLAR CO. [*]
• Court: Oregon Supreme Court

285 P. 244

132 Or. 453

COQUILLE MILL & TUG CO. v. ROBERT DOLLAR CO. ^[*]

Supreme Court of Oregon

February 25, 1930

Department 1.

Appeal from Circuit Court, Coos County; James T. Brand, Judge.

Suit by the Coquille Mill & Tug Company against the Robert Dollar Company. Decree for the plaintiff, and the defendant appeals.

Affirmed.

Hugh Montgomery, of San Francisco, Cal. (A. J Sherwood, of Coquille, on the brief), for appellant.

W. U. Douglas, of Marshfield, and A. C. Shaw, of Portland (Howard F. Chadbourne, of San Francisco, Cal., and L. A. Liljeqvist, of Marshfield, on the brief), for respondent.

ROSSMAN J.

This is a suit in which the plaintiff prays for a decree quieting its title to a tract of land against a claim asserted by the defendant. The only issue before us is whether the defendant's claim is valid and should be recognized as such, or whether the decree of the circuit court, which quieted the plaintiff's title against it, should be affirmed. Since the parties are not in serious discord upon the following facts, and since a statement of them readily discloses the questions which they submit for our decision we relate the succeeding circumstances. October 18, 1910 while the plaintiff was the owner of the timberland involved in this suit, it entered into a contract with the Randolph Lumber Company, which recited:

"The party of the first part for the consideration hereinafter named agrees to sell, transfer and convey unto the party of the second part, its successors and assigns, and under the terms and conditions hereinafter set forth, all the stumpage contained upon the following described premises. * * *

"And the party of the second part agrees to purchase all of the stumpage upon the foregoing described premises at the prices and under the terms, conditions, and provisions hereinafter set forth."

The price stipulated by the contract for all timber cut and removed was $5 per thousand feet for white cedar and $2.25 per thousand feet for all other timber.

The contract did not specify the time within which the timber must be removed, unless that stipulation is contained in the following provision:

"The party of the second part agrees to commence active logging operations upon the premises hereinbefore described in sufficient time to put in and agrees to put in and deliver at the Coquille River twenty million feet of merchantable saw logs and of the kind hereinbefore provided for by the first day of January, 1913, and further agrees to cut and deliver and pay for twenty million feet of merchantable saw logs each and every calendar year thereafter until all merchantable timber and of the kind hereinbefore specified shall be completely logged off the premises hereinbefore described and delivered at the Coquille River.

"It is further covenanted and agreed that the only income which the party of the first part has from its investment in the premises hereinbefore described is from the sale of stumpage from said land and that the said party of the first part desires to realize from the sale of said stumpage sufficient sum to pay all taxes which shall be assessed and levied against the same, to pay a reasonable interest on its investment and the expenses of fire protection thereof during the dry season of the recurring years and it is desirous of having said lands logged off as soon as possible after logging thereon is commenced for the reason aforesaid and for the reason that the danger from forest fires is much enhanced after logging is commenced thereon and the expense of fire wardens and fire protection is much increased after said logging operations are commenced and for the purpose of reimbursing the party of the first part and meeting the tax, interest and expense accounts as aforesaid, the party of the second part agrees to pay the party of the first part twenty-five cents per thousand feet for each and every thousand feet under twenty million feet per annum it shall fail to log and pay for each calendar year during the term of this agreement and agrees to pay said twenty-five cents per thousand feet for said shortage of each calendar year on or before the first day of March of the succeeding calendar year, and the failure to pay such shortage by said time shall be subject to the same terms for the forfeiture and determination of all rights under this contract as the failure to pay the stumpage as is hereinbefore provided."

This contract was recorded in the deed records of Coos county, that being the county where the land was situated, and in the year 1914 was assigned to the defendant. Shortly thereafter the Randolph Lumber Company was dissolved.

In 1912 the Randolph Lumber Company built six and one-half miles of logging railroad, and at the same time assembled the necessary equipment for conducting logging operations; shortly thereafter 14,230,514 feet of logs were cut and removed from the land. For these the plaintiff was paid approximately $40,000. No timber has been cut or removed since 1916; thus 14,230,514 feet constitutes the total amount cut under the contract. In the years 1916 and 1917 the defendant removed all of the equipment used for logging operations, including the logging railroad. At the same time it permitted the right of way to revert to those from whom it had been obtained. It likewise abandoned the camp buildings and other structures which had been used in connection with the logging operations; by 1918 all these buildings had disappeared. Thus the logging operations ceased, and since 1916 the defendant has neither cut nor removed any timber from this land. In 1918 it caused a cruise to be made of the timber; this showed 154,731,000 feet of merchantable timber. This amount, when added to the 14,230,514 feet previously cut, indicates that when the contract was signed the land contained a total of 168,961,514 feet. The evidence warrants the conclusion that the logging railroad built by the Randolph Lumber Company constituted a practical method of bringing out all of the logs upon the entire tract, provided minor extensions were made to it as the operations progressed. When the defendant quit logging, it began to make annual payments of $5,000 to the plaintiff under the provisions of the contract which required it to pay 25 cents per thousand feet for any deficiency in its operations less than a cut of twenty million feet per annum. The last of these payments covered the year 1925. Five thousand dollars tendered by it March 1, 1927, was rejected by the plaintiff, as was likewise a similar sum in 1928. These annual payments were apparently made by bank checks signed by the defendant. The check dated March 2, 1920, bore the following inscription upon its reverse side: "Indorsement hereon by payee constitutes receipt in full for the within account. * * * Penalty on contract dated October 18, 1910 for stumpage for year ending Dec. 30, 1917 ......$5,000." The defendant's check, dated January 15, 1924, bore on its reverse side the same preliminary general statement, which was followed by the words, "Account contract dated October 18, 1910......$5,000." Upon the acceptance of the latter check, the plaintiff issued its receipt which stated: "Received from the Robert Dollar Company the sum of $5,000 covering penalty due to failure to cut twenty million (20,000,000) feet of timber at twenty-five cents (25¢) Per M during the year 1923, as per terms of contract dated October 18, 1910. * * *" The other checks and receipts issued from 1920 to 1926 were similar in their recitals to the above. In the middle of 1925 the parties entered upon some negotiations which contemplated the consummation of a new contract concerning the defendant's purchase of this timber; these negotiations were conducted partly by correspondence. In one of the plaintiff's letters it expressed a hope for "a satisfactory adjustment of our respective rights and obligations under the contract of 1910"; another of its letters contained a similar statement which seems to indicate that the plaintiff considered the contract still in effect at that time. In March of 1926 these negotiations came to an end without having produced any result. In this same period of time, and for some years preceding it, the plaintiff had urged the defendant to resume its operations, and from time to time the defendant expressed a willingness to do so if the plaintiff would secure the necessary rights of way so that the defendant could construct a railroad into the timber. The plaintiff was not required by the contract to secure such grants, but nevertheless conducted with the property owners negotiations and from time to time informed the defendant of the results. Several proposals made by the owners of farms over which the railroad would pass were rejected by the defendant; in one instance it stated that the term of twelve years in the proposed leases was too short; when a new offer for twenty years was submitted, it demanded ownership in fee simple; it rejected another proposal on the ground that the property owners demanded too great a price for the rights surrendered; finally the defendant expressed itself as no longer interested in obtaining a right of way, and stated that it would wait for an increase in the value of the timber.

March 19, 1926, the plaintiff, in writing, notified the defendant that it "hereby terminates its waiver of time of performance of that certain contract dated the 18th day of October, 1910, * * * and you are further notified that the undersigned, Coquille Mill and Tug Company, hereby demands that you begin active logging operations on said real property described in said contract hereinabove set forth not later than the first day of September, 1926, and diligently and actively continue said logging operations,...