Drewry v. Welch

• Decision Date: 29 July 1965
• Citation: 46 Cal.Rptr. 65,236 Cal.App.2d 159
• Court: California Court of Appeals Court of Appeals
• Parties: Daniel R. DREWRY, Jr., Individually and as Administrator, Plaintiff and Respondent, v. J. D. WELCH, E. C. Welch, Nina E. Welch, Eunice Welch, Mendo Wood Products, Inc., a corporation, Welch and Welch, and Wayne Peters, Defendants and Appellants. Civ. 21723.

Page 65

46 Cal.Rptr. 65

236 Cal.App.2d 159

Daniel R. DREWRY, Jr., Individually and as Administrator, Plaintiff and Respondent, v. J. D. WELCH, E. C. Welch, Nina E. Welch, Eunice Welch, Mendo Wood Products, Inc., a corporation, Welch and Welch, and Wayne Peters, Defendants and Appellants.

Civ. 21723.

District Court of Appeal, First District, Division 1, California.

July 29, 1965.

Rehearing Denied Aug. 23, 1965.

Hearing Denied Oct. 8, 1965.

[236 Cal.App.2d 163] Timothy W. O'Brien, Ukiah, M. Mitchell Bourquin, San Francisco, John S. Howell,

San Francisco, Donald Farbstein, San Mateo, for appellants.

Harry W. Falk, Jr., Los Altos, Huber & Goodwin, Dayton D. Murray, Jr., Eureka, for respondent.

BRAY, Justice.*

Defendants appeal from a judgment of the Superior Court of Mendocino County, sitting without a jury, in favor of plaintiff in the sum of $298,654.91.

QUESTIONS PRESENTED

1. Did title to all timber on plaintiffs' land pass to buyers?

2. Was a forfeiture declared?

3. Was the time for cutting timber extended by the Crofoot litigation?

4. Did defendants substantially comply with the 75 per cent clause?

5. Are plaintiffs estopped?

6. Is section 3346 of the Civil Code awarding double damages invalid?

7. Was the imposition of double damages mandatory?

RECORD

This action arises out of a sale of timber evidenced by a contract between D. R. Drewry, Ethel L. Drewry, Daniel R. Drewry, Jr. and Barbara Drewry as sellers ¹ and O. N. Lucas and E. J. Woodburn, Jr. as buyers dated May 3, 1950. Defendants have succeeded to the rights of said buyers in said contract. The complaint herein was brought to quiet title to plaintiffs' land upon which the timber is located, for an injunction and to recover damages for alleged trespass and conversion of timber after May 3, 1960. After trial the court found that on May 3, 1950, the date of the contract, there was in excess of 23,600,000 feet, board measure, of merchantable timber on the Drewry ranch; that not more than 14,500,000 feet of said timber had been fallen before May 3, 1960; that defendants, other than Wayne Peters, up to May 3, 1960, falsely and mistakenly represented to plaintiffs that approximately 75 per cent of the timber had been fallen prior to that date; that the amount of timber removed after May 3 was 9,199,330 feet; that the removal of timber by defendants after May 3, 1960, constituted a trespass; that plaintiffs are entitled to compensatory damages for the timber removed subsequently to that date in the sum of $153,628.93 and that by virtue of section 3346 of the Civil Code those damages should be doubled to the amount of $307,257.84.

EVIDENCE

The pertinent part of the contract is: 'Buyers agree to buy all the merchantable fir timber on the real property hereinafter described for the price of Two ($2.00) Dollars per thousand board, feet, * * *

'* * *

'Buyers shall have a period of ten (10) years from date of this agreement within which to fall and remove the timber on the real property hereinafter described, and in the event Buyers have fallen approximately seventy-five (75%) per cent of the timber by the termination of said ten (10) year period, they shall have an additional three year period within which to fall and remove the balance of the timber herein agreed to be sold under this agreement.' (Emphasis added.)

The land in question, the Drewry ranch, consists of about 3,231 acres in Mendocino County. The contract provided that logging was to begin within six months. However, as will hereinafter appear, the commencement of logging was prevented for approximately eighteen months by the Crofoot litigation. Lucas and Woodburn, the original buyers, thereafter felled some trees prior to March 28, 1954, but did not remove any logs. Thereafter several assignments of the contract were made by the buyers and their successors and timber removed by the assignees. On May 3, 1960 (the expiration of the ten-year period provided in the contract) the contract was owned by defendants Welch and Mendo. Defendant Peters then had a logging contract with them. Peters under his contract continued to fall and remove timber until early 1961. By May 3, 1960, out of the 23,600,000 plus feet of timber, board measure, on the land at the time of entry into the contract, not more than 14,500,000 feet had been fallen. There was evidence that defendants represented to plaintiffs in late 1959 and up to May 3, 1960, that they had fallen over 75 per cent of the timber. Plaintiffs found out in late 1960 that the amount of timber fallen was only 61.44 per cent and notified defendants to cease cutting timber. Defendants continued to cut and remove timber until this action was filed.

1. Did title pass to all timber?

Defendants contend that through the contract of sale title to all the timber on plaintiffs' land passed to the buyers and that the time provision is merely a covenant, the violation of which does not terminate the buyers' right to the timber. To this effect they cite Peterson v. Gibbs (1905) 147 Cal. 1, 6, 81 P. 121; Gibbs v. Peterson (1912) 163 Cal. 758, 766, 127 P. 62; Anderson v. Palladine (1918) 39 Cal.App. 256, 261, 178 P. 553; Ciapusci v. Clark (1909) 12 Cal.App.2d 44, 106 P. 436. These cases were distinguished if not overruled in Mallett v. Doherty (1919) 180 Cal. 225, 228-229, 180 P. 531, 15 A.L.R. 19, and referred to in Whittaker v. Thompson (1959) 53 Cal.2d 192, 194, 1 Cal.Rptr. 7, 8, 347 P.2d 7, 8, where the court said: 'The rule is established in California that where there is a contract for the sale of standing trees to be removed within a specified time, title passes to the vendee to only those trees which he cuts and removes within the designated period. Title to the remaining trees is in the vendor.

'The rule is thus stated in Mallett v. Doherty, 180 Cal. 225, 229, 180 P. 531, 532, 15 A.L.R. 19: 'The rule of construction as to contracts for the sale of standing trees to be removed within a specified time is thus stated in 28 Am. & Eng. Ency. of Law, p. 541: 'Contracts for the sale of standing trees to be removed within a specified time have generally been construed by the courts as sales of only so many trees as the vendee might cut and remove within the time designated, the balance remaining the property of the vendor.' See, also, 25 Cyc. 1549; 17 R.C.L. 1084; and 55 L.R.A. 526.'' (See also Call v. Jenner Lumber Co. (1917) 33 Cal.App. 310, 315, 165 P. 23.)

The provisions of the instant contract clearly set forth that the buyers' right to an additional three years to fall and remove timber arises only if the buyers, within the ten-year period, have fallen approximately 75 per cent of the timber.

In McCreary v. Mercury Lumber Distributors (1954) 124 Cal.App.2d 477, 268 P.2d 762, the court, in distinguishing its case from Anderson v. Palladine, supra (cited by defendants as hereinbefore set forth), pointed out that in the contract it was reviewing 'there was no absolute conveyance of the timber to appellant, but [was] merely a sale of the timber as and when removed by appellant, as is indicated in the payment provision.' (P. 485, 268 P.2d p. 767.) The terms of payment were similar to those in the case at bench, so much per thousand board feet.

In view of the intention of the parties as expressed in the contract, the provisions of section 658, subdivision 4 of the Civil Code (stating 'industrial growing crops and things attached to or forming part of the land, which are agreed to be severed before sale or under the contract of sale, shall be treated as goods and be governed by the provisions of the title of this code regulating the sales of goods') and section 660 of the Civil Code (containing similar language), do not require a determination that the title to all the timber passed before removal from the land. The fact that growing timber may be treated as goods in a sales contract does not cause the title to pass ipso facto unless the contract shows that to be the intention of the parties. Section 1739 of the Civil Code, in effect at the time of the trial, sets forth rules for determining the time as to which the property or the goods is to pass to the buyer unless a different intention appears.

Palmer v. Wahler (1955) 133 Cal.App.2d 705, 285 P.2d 8, cited by defendants, states, after referring to sections 658 and 660 of the Civil Code, 'Further, it would seem only logical that aside from the provisions of these code sections, a sale of timber for the purpose of cutting and removing it from the land would amount to a constructive severance until such time at least as there should be, if ever, a reuniting or merger of the ownership of the land and the timber again into common ownership.' (P. 712, 285 P.2d p. 13.) This case relied for its authority on Peterson v. Gibbs, supra, which, as we have shown, was distinguished in Mallett v. Doherty, supra, and is contrary to the weight of authority in California.

Dunham v. Taylor (1957) 211 Or. 618, 317 P.2d 926 holds 'A contract for the sale of timber on a given tract of land with a proviso that it shall be removed prior to a time specified while vesting a present title in the grantee or vendee, is an estate upon condition liable to be defeated within the time specified. * * * The law is well settled that the interest of a purchaser under a timber contract of sale stipulating for removal within a specified period, terminates at the expiration date of the sales contract even though the purchaser, as here, has paid the consideration required by the contract.' (P. 929.)

In the instant contract appears the language 'Buyers and Sellers specifically agree that title to the timber agreed to be sold under the terms of this contract shall not pass to Buyers until said timber, logs and lumber is [sic] paid for. This is intended as a protection for the benefit of Sellers, * * *.'

2. Not a forfeiture.

Defendants contend that in determining that their rights to the timber terminated when they failed to fall...