Corder v. A & J Lumber Co.

• Decision Date: 10 August 1960
• Citation: 354 P.2d 807,223 Or. 443
• Parties: Loren H. CORDER, dba Rocket Lumber Co., Respondent, v. A & J LUMBER CO., Inc., a corporation, Appellant.
• Court: Oregon Supreme Court

Page 807

354 P.2d 807

223 Or. 443

Loren H. CORDER, dba Rocket Lumber Co., Respondent, v. A & J LUMBER CO., Inc., a corporation, Appellant.

Supreme Court of Oregon, Department 1.

Argued the Submitted July 7, 1960.

Decided Aug. 10, 1960.

William D. Green, Jr., Roseburg, argued the cause and filed a brief for appellant.

Don H. Sanders, Roseburg, argued the cause and filed a brief for respondent.

Before McALLISTER, C. J., and ROSSMAN, PERRY, SLOAN and HOLMAN, Justices.

HOLMAN, Justice pro tem.

The defendant, A & J Lumber Co., Inc., owned 513 acres of land in Douglas county which had been the subject of a foreclosure, and only a short time remained of the redemption period. Under these circumstances, on or about July 19, 1955, it entered into a written agreement with the plaintiff Corder, who operated a sawmill, whereby Corder purchased all the timber and cordwood on the premises for the cash sum of $6,500. In addition, defendant agreed to log the timber and deliver it to plaintiff's mill for the sum of $30 a thousand board feet. Defendant guaranteed there were at least 700,000 board feet on the premises and that he would deliver that much to plaintiff's mill on or before October 31, 1956, delivering not less than 150,000 board feet in any one three months' period, beginning August 1, 1955. If there was not that much timber on the premises, defendant obligated itself to obtain the balance elsewhere and to deliver it to plaintiff's mill at no additional cost to the plaintiff except for the logging and delivery cost of $30 per thousand. In the event of conditions beyond defendant's control making it unreasonable or difficult to log, defendant was to have an extension of time, not to exceed three months.

As security for the performance of its agreement to log and deliver the timber, defendant pledged the title to the real property, putting a deed in escrow to be delivered to plaintiff if defendant did not perform.

After defendant commenced the logging under the contract, it encountered a large number of cull logs. Often it was not possible to tell if the logs would be culls until after the tree was felled and bucked. Defendant wished to salvage his investment in these logs and to deliver them to a mill, closer to the logging operation, which used this type of log. Plaintiff did not want and could not use this type of log. As a result the parties orally modified the contract to the effect that defendant had the right to deliver the culls to this other mill and keep the entire proceeds except for the sum of $3 per thousand to be paid plaintiff as stumpage. The culls so delivered were not to count upon the 700,000 board feet defendant had guaranteed to deliver to plaintiff's mill. A memorandum of that part of the oral modification which provided that the culls were not to count toward the amount required to be delivered to plaintiff's mill was put in writing in the form of a letter from defendant to plaintiff.

Defendant delivered to plaintiff during the prescribed period only 363,368 board feet of timber. In no three months' period did it deliver as much as 150,000 board feet. In the winter of 1955-1956 it was prevented from logging for not to exceed six weeks because a flood washed out some bridges. Upon the date specified in the contract for its termination, defendant asked for an extension of time because of the flood but was refused. Immediately after the expiration of the period stated for performance, plaintiff secured and recorded the deed to the real property.

After recording the deed, plaintiff brought this suit to quiet title to the real property covered by the deed. Defendant filed an answer asking that the deed be declared to be a mortgage. Upon trial the lower court found that the deed was in fact a mortgage to secure performance of the contract, that the contract had been breached by defendant, and that plaintiff's damages because of defendant's breach were $6,720. The court decreed foreclosure of the mortgage in this amount, with interest at 6% from October 31, 1956, and directed the sale of the property, defendant to have the usual redemption period provided by law. From this decree, defendant appeals.

Plaintiff has not cross-appealed from the trial court's holding that the deed was in fact a mortgage, so this court will not examine that matter further.

Defendant first contends that in holding that the deed was a mortgage it was necessary for the court to find that certain equities were with the defendant and that these equities required that defendant not be placed in a position where he is financially unable to redeem. The logic of this argument escapes us.

Defendant next contends that plaintiff himself was in default under the contract because of his refusal to grant an extension as a result of the delay caused by the flood. Flood or no flood, defendant never delivered the minimum amount of logs required in any three months' period, and it delivered only one-half the amount required during the total life of the contract. The delay was for a relatively short time considering the total length of time defendant had in which to perform and this during a period of time when logging was usually difficult. It is obvious the flood was not the cause of defendant's breach.

Defendant contends plaintiff breached the contract in failing to allow the defendant to supply the shortage of logs from other sources. There is no evidence that plaintiff prevented defendant from doing so.

Defendant contends that plaintiff breached the contract because he did not allow defendant any credit for the cull logs on the 700,000 feet required to be delivered, as the modification providing they should not be counted was...