Crofoot Lumber, Inc. v. Ford

• Decision Date: 14 April 1961
• Citation: 191 Cal.App.2d 238,12 Cal.Rptr. 639
• Court: California Court of Appeals Court of Appeals
• Parties: CROFOOT LUMBER, INC., a Corporation, Plaintiff and Appellant, v. Don FORD et al., Defendants, Don Ford, Hollow Tree Lumber Company, a Corporation, John Rawles, Jack Lewis, Garcia Loggers, a Corporation, Moores and Smith, a copartnership consisting of William Moores and William Smith, William Moores, William Smith, Henry Thompson, and Francis M. Passalacqua, Respondents. William MOORES and William Smith, individually, and as copartners doing business under the name and style of Moores and Smith, Cross-Complainants and Appellants, v. Jack LEWIS, Austin Rawles, Henry Thompson and Franchis M. Passalacqua, Cross-Defendants and Respondents. Civ. 9965.

Page 639

12 Cal.Rptr. 639

191 Cal.App.2d 238

CROFOOT LUMBER, INC., a Corporation, Plaintiff and Appellant, v. Don FORD et al., Defendants, Don Ford, Hollow Tree Lumber Company, a Corporation, John Rawles, Jack Lewis, Garcia Loggers, a Corporation, Moores and Smith, a copartnership consisting of William Moores and William Smith, William Moores, William Smith, Henry Thompson, and Francis M. Passalacqua, Respondents.

William MOORES and William Smith, individually, and as copartners doing business under the name and style of Moores and Smith, Cross-Complainants and Appellants, v. Jack LEWIS, Austin Rawles, Henry Thompson and Franchis M. Passalacqua, Cross-Defendants and Respondents.

Civ. 9965.

District Court of Appeal, Third District, California.

April 14, 1961.

Sullivan, Roche, Johnson & Farraher, by Theodore A. Kolb, San Francisco, and Spurr & Brunner, Ukiah, for plaintiff-appellant.

Brobeck, Phleger & Harrison, by Donald D. Connors, Jr., San Francisco, for cross-complainants-appellants Moores and Smith.

Kasch & Cook, Ukiah, for respondent Lewis.

Burke & Rawles, Ukiah, for respondent Rawles.

Francis M. Passalacqua, Healdsburg, for respondent Thompson.

McKenzie, Arata & Murphy, Santa Rosa, for respondent Passalacqua.

WARNE, Justice pro tem.

Two separate appeals arising out of this action are here presented for determination: (1) Plaintiff-appellant, Crofoot Lumber, Inc., a corporation, hereinafter referred to as Crofoot, appeals from a money judgment in its favor awarding damages equivalent to the stumpage value of certain merchantable timber wrongfully removed from its land. It is the contention of Crofoot that the trial court erred in not awarding multiple damages pursuant to section 733 of the Code of Civil Procedure and section 3346 of the Civil Code, or in the alternative, that if it is not entitled to damages under section 3346, it would be entitled to damages under the theory of conversion under section 3333 of the Civil Code and that said damages should be measured by the amount of money received by the defendants for the property, with interest from the date of conversion. (2) An appeal by cross-complainants, William Moores and William Smith, individually, and as copartners doing business under the name of Moores and Smith, from that part of the judgment entered in favor of the cross-defendants, Henry Thompson, Jack Lewis and Austin Rawles, wherein the trial court found that the cross-defendants did not agree to indemnify cross-complainants against any loss or liability arising out of the cutting of the timber and therefore denied cross-complainants any relief on that issue.

This is a companion case to Crofoot Lumber, Inc. v. Thompson, et al., 163 Cal.App.2d 324, 329 P.2d 302, which we shall refer to at times during the course of this decision as the 'first case.' It appears from the facts as related in the first case that Crofoot and its predecessors entered into a contract with defendant Henry Thompson and one Jack Edsell on August 15, 1949, for the sale of merchantable timber on land owned by Crofoot. Shortly thereafter Edsell assigned his interest in the contract to Thompson. Thompson breached the contract, and on August 17, 1954, Crofoot rescinded the agreement. On October 28, 1954, Crofoot instituted the first action, wherein it alleged the rescission and sought a judgment, among other things, that it had rescinded.

While that action was pending and at issue awaiting trial, Crofoot discovered that the timber upon said property was being logged off by defendant Don Ford under instructions of defendants William Moores and William Smith, individually, and as copartners doing business as Moores and Smith, Garcia Loggers, a corporation, and Hollow Tree Lumber Company, a corporation (all of which are hereinafter referred to as the Moores group). The Moores group claimed to have obtained their right to cut the timber under a contract with the defendants Jack Lewis, Austin Rawles and Henry Thompson. Immediately upon learning of the timber removal, Crofoot commenced the present action, wherein it asked the court to enjoin the trespass. On March 9, 1956, Crofoot was granted a temporary restraining order against the defendants, and thereafter a hearing on the motion for a preliminary injunction was had. Plaintiff's motion for a preliminary injunction was denied.

After the denial of the preliminary injunction, the defendants proceeded to log the property, and in approximately 77 days removed the timber in question here.

On August 6, 1956, the first case, namely, Crofoot Lumber, Inc. v. Thompson, supra, went to trial, and a judgment in favor of Crofoot was rendered therein on February 8, 1957, declaring the contract to have been rescinded. This judgment was affirmed by this court on September 3, 1958, and a hearing in the Supreme Court was thereafter denied.

On February 24, 1959, the instant action went to trial before the court sitting without a jury. Final judgment was entered on September 10, 1959.

In the first case, Crofoot Lumber, Inc. v. Thompson, supra, it was decreed that since August 17, 1954, Crofoot had been the owner in fee simple and entitled to the possession of the land and the timber standing thereon, and that the claims of Thompson, Edsell, Lewis and all others claiming under them were without right and they were enjoined from further asserting such claim.

It appears that on October 7, 1955, Edsell, for a consideration of $250, executed a quitclaim transferring any right or interest which he may have had at that time in said timber to Lewis.

In December, 1955, Lewis contacted William Moores, the latter acting on behalf of the Moores defendants, and offered to sell the timber here involved to Moores. Moores had an investigation made of the property by his head forester, contacted his attorney and asked him to check into the outstanding leases between Crofoot and Thompson. After investigation, Moores' attorney advised him that it would be all right for Moores to buy the timber provided he obtained a hold-harmless agreement from Lewis, Rawles and the other sellers, agreeing to hold Moores harmless in the event of an adverse decision in the action then pending. Lewis advised Moores that he was not willing to do this, and for the time being the matter came to rest at that point.

Moores also contacted H. C. Crofoot, Sr., and H. C. Crofoot, Jr., and was advised by both of them that Crofoot claimed full interest to this property and that neither Edsell, Thompson nor Lewis had any interest in, or right or title to, the timber.

In February, 1956, Lewis again contacted Moores in an effort to reactivate the negotiations' pertaining to the timber. Moores then advised Lewis that the Moores group was prepared to buy the timber on a stumpage basis provided they could have a hold-harmless agreement. Discussions pertaining to price on a stumpage basis took place between Lewis and Moores, and these discussions also involved a negotiation between Lewis and Moores concerning the purchase by Lewis of an airplane which belonged to one of Moores entities. An agreement was finally reached by Lewis and Moores at a price of $18 per thousand board feet for the redwood and $12 per thousand for the fir. This agreement, according to Moores, also included the sale of an airplane to Lewis for $3,000 less than the original asking price, which amount according to Moores, was made up by reduction in the timber price to Moores of one dollar per thousand of three million feet of stumpage.

Lewis then proceeded to Healdsburg where he saw Passalacqua at the latter's office and asked Passalacqua to draft a contract and come to Ukiah for a meeting between Lewis, Moores, Thompson and Rawles in order to complete the negotiations which were pending between himself and Moores.

Passalacqua, without first talking to Thompson proceeded to prepare a draft of a contract and took the same to Ukiah on February 22, 1956. He there met Thompson and reviewed with him the proposed contract for sale of the timber to Moores and Smith. After discussion with Thompson, Passalacqua and Thompson proceeded, in the company of Lewis and Rawles, to the office of Moores. As the trial court stated in its opinion, 'What actually went on at this meeting is difficult to determine from the conflicting accounts of it by those who were present, but it is clear to the Court that an agreement was discussed by Moores, Lewis, and Rawles, wherein the sellers were to sell and the buyers were to buy this timber at $12.00 per thousand for fir and $18.00 per thousand for redwood.' Passalacqua participated in this discussion, and the various terms of a proposed contract were orally agreed upon. Moores suggested that the changes which had been agreed upon should be reduced to writing right then and there, but Passalacqua advised that he was late for another engagement and would have to leave. He agreed to reduce the changes to writing at his office in Healdsburg and said he would return the engrossed contract to Lewis. It is agreed by all parties that Thompson said nothing at the meeting. The trial court found as a fact that at this time Thompson did not agree to the contract of sale from Lewis and Rawles to Moores and Smith, but later, on May 12, 1956, agreed to recognize the contract which had been signed by Lewis and Rawles. Passalacqua was not a party to the contract.

Moores and Smith transferred their rights under the contract dated February 22, 1956, to Garcia Loggers, a corporation, which later merged into Hollow Tree Lumber Company. Garcia hired Don Ford, an independent logger, to cut the timber and contracted to sell the logs to Hollow Tree Lumber Company.

As we have heretofore stated, on March 9, 1956, after Don Ford had moved onto the property and had begun to cut the timber, the present action was commenced; a temporary restraining order was issued on March 9th also; and on March 19, 1956, the preliminary injunction was denied and...