Dugal Logging, Inc. v. Arkansas Pulpwood Co.

• Decision Date: 17 March 1999
• Docket Number: No. CA,CA
• Citation: Dugal Logging, Inc. v. Arkansas Pulpwood Co., 988 S.W.2d 25, 66 Ark.App. 22 (Ark. App. 1999)
• Parties: DUGAL LOGGING, INC., et al., Appellants, v. ARKANSAS PULPWOOD COMPANY, et al., Appellees. 98-973.
• Court: Arkansas Court of Appeals

Page 25

988 S.W.2d 25

66 Ark.App. 22

DUGAL LOGGING, INC., et al., Appellants, v. ARKANSAS PULPWOOD COMPANY, et al., Appellees.

No. CA 98-973.

Court of Appeals of Arkansas Division II.

March 17, 1999.

Henry Kinslow, El Dorado, James A. Hamilton, Hamburg, for appellants.

Gary D. McDonald, El Dorado, for appellant Dugal Logging.

Boswell, Tucker & Brewster, by: Dennis J. Davis, Bryant, for appellant L.T.M. Chips, Inc.

Vickery & Landers P.L.L.C., by: Michael R. Landers, El Dorado, for appellant Anthony Forest Products Co.

Harrell & Lindsey, by: Paul E. Lindsey, Camden, for appellee.

JUDITH ROGERS, Judge.

This is a case in which appellants were found liable for conversion, trespass, and the wrongful cutting of timber. The circuit judge, sitting as factfinder, awarded appellees damages of $18,211.90. Numerous issues are raised on appeal and cross-appeal. We find no error and affirm.

On July 5, 1991, Ellena Goodwin, part-owner of sixty acres in Union County, executed a timber-cutting agreement with Arkansas Timber Corporation. The agreement provided that Arkansas Timber would cut and remove certain timber on the land, with the provision that the contract must be complied with by July 5, 1992. On April 8, 1992, before the expiration of the deadline, Ellena Goodwin executed a timber deed on the same land to appellee Arkansas Pulpwood Company, for which she was paid $5,000. Neither Arkansas Timber nor Arkansas Pulpwood knew of the other's transaction with Goodwin.

Sometime in 1992, appellant Dugal Logging entered into a verbal agreement with Arkansas Timber to harvest the trees on the Goodwin tract. It is not known exactly when Dugal began its harvesting operation, but it is undisputed that the cutting and hauling were not completed before the July 5, 1992, deadline. Weight tickets from various mills revealed that deliveries occurred between July 7 and July 20, 1992. Among the mills that purchased the logs were appellants Anthony Forest Products Company, LTM Chips, Inc., and Riverwood International USA, Inc. Anthony paid Dugal $9,380.80 for the logs it purchased; LTM paid $13,816.85; and Riverwood ¹ paid $9,150.58, for a total of $32,348.23.

After Dugal received payment from the mills, it forwarded $12,541.20 to Arkansas Timber for stumpage, i.e., the right to enter upon the land and cut trees. At about this same time, Arkansas Pulpwood, unaware that the trees on the Goodwin tract had already been harvested, began preparations to cut the trees pursuant to its April 8, 1992, timber deed. Upon discovering what had occurred, it filed suit against Arkansas Timber in Union County Circuit Court alleging a wrongful cutting of timber. By amended complaint, Arkansas Pulpwood added Dugal Logging, Meshell Timber, and the three above-named mills as defendants, charging them with conversion and trespass. These defendants filed cross-claims, seeking judgment over in the event they should be held liable: Dugal against Arkansas Timber; Riverwood against Meshell; and LTM, Anthony, and Meshell against Dugal.

The remaining parties in the case were added by joinder. During the pendency of the lawsuit, Dugal filed a motion for joinder, claiming that Ellena Goodwin was not the titled owner of the sixty acres upon which the timber had stood. Dugal alleged that other persons, including the heirs of W.R. McHaney, appellees herein, were indispensable parties. The trial court agreed and ordered joinder.

Trial was held on September 17, 1997, during which testimony was taken and voluminous documentary evidence presented. Thereafter, the trial judge issued an extensive, carefully-reasoned letter opinion. He found that, at the time of the timber cutting, the ownership interests in the sixty acres were as follows: Ellena Goodwin, one-fifth; Sallie Mae Hardy Freeman (Ellena's sister), one-fifth; and the McHaney heirs (McHaney was a grantee of Goodwin's three other siblings), three-fifths. He further found that, although Dugal began cutting the timber before the July 5, 1992, deadline, the substantial majority of the work was done after the deadline. Dugal was therefore held liable for trespass and conversion. Arkansas Timber and the three mills were also held liable for conversion. However, the judge determined that the parties' acts were not intentional, such as would justify the imposition of exemplary damages pursuant to Ark.Code Ann. § 18-60-102 (1987).

Compensatory damages were calculated by the trial judge as follows: the price Dugal received from the mills for the timber, $32,348.23, less Dugal's cost of harvesting, $14,136.33, for a total of $18,211.90 awarded to appellees jointly and severally against appellants. Prejudgment interest was added from July 20, 1992, to the date of trial. When all cross-claims were figured in, the ultimate judgment fell upon Dugal and Arkansas Timber. Additionally, Dugal was awarded $12,541.10 on its cross-claim against Arkansas Timber, representing the amount Dugal had paid for stumpage.

Ten issues are presented on appeal. The first two concern a motion to dismiss the appeal and a challenge to the circuit court's jurisdiction. The next two concern the merits of the case, and the final six involve the trial judge's award of damages.

Appellees and one of the appellants, Riverwood, argue that the appeal should be dismissed because a motion to extend time for filing the record was improperly granted. We certified this case to the Arkansas Supreme Court for resolution of this issue, and certification was accepted. See Dugal Logging, Inc. v. Arkansas Pulpwood Co., Inc., 335 Ark. 546, 983 S.W.2d 126 (1998). On January 14, 1999, the supreme court denied the motion to dismiss the appeal and reassigned the remainder of the case to this court. See Dugal Logging, Inc. v. Arkansas Pulpwood Co., Inc., 336 Ark. 55, 984 S.W.2d 410 (1999). The issue has thus been decided, and we need not address it further.

Next, appellant Dugal argues that the circuit court had no power to determine the ownership of the land upon which the timber was grown. Dugal claims, without citation to authority, that determination of ownership of real property is the exclusive province of the chancery court, apparently referring to the rule that a quiet title action, brought by one in possession of land, is to be filed in chancery court. See Carter v. Phillips, 291 Ark. 94, 722 S.W.2d 590 (1987). However, this was not a quiet title action. Proof of ownership in the property was submitted as part of the conversion and trespass counts. Each of those counts requires proof of an interest in the property converted or trespassed upon. See Graysonia-Nashville Lumber Co. v. Wright, 117 Ark. 151, 175 [66 Ark.App. 28] S.W. 405 (1915); Gardner v. Robinson, 42 Ark.App. 90, 854 S.W.2d 356 (1993). Thus, determination of ownership of property was not the main thrust of the lawsuit. This was a tort action of a type not generally cognizable in chancery. See Chamberlain v. Newton County, 266 Ark. 516, 587 S.W.2d 4 (1979). See also Palmer v. Sanders, 233 Ark. 1, 342 S.W.2d 300 (1961), holding that, in a conversion suit brought in circuit court, it was proper to present evidence as to ownership of the converted property.

We also note that Dugal filed no motion to transfer the case from circuit to chancery court. As between law and equity, any objection to jurisdiction is waived in the absence of a motion to transfer unless the court is wholly without jurisdiction, as in the case of a chancery court trying a criminal case or a probate matter. First Nat'l Bank v. Arkansas Devel. Finance Authority, 44 Ark.App. 143, 870 S.W.2d 400 (1994). See also Stolz v. Franklin, 258 Ark. 999, 531 S.W.2d 1 (1975), holding that appellant's objection to chancery court jurisdiction in an ejectment case was waived when no motion to transfer was made. ²

Based upon the forgoing, we hold there was no error in the trial judge's exercise of jurisdiction.

We turn now to the merits of the case. The first matter to be addressed is whether there was sufficient evidence to prove ownership of the timber land. As we stated earlier, proof of ownership or the right to possession of property is necessary for the maintenance of trespass and conversion actions. Graysonia-Nashville Lumber Co. v. Wright, supra; Gardner v. Robinson, supra; Big A Warehouse Distributors, Inc. v. Rye Auto Supply, Inc., 19 Ark.App. 286, 719 S.W.2d 716 (1986). At trial, appellees presented several deeds into evidence that traced the chain of title to the sixty acres to one Allen Hardy. Probate records from the guardianship proceeding of Sallie Mae Hardy Freeman revealed that Freeman and Ellena Goodwin were two of Allen Hardy's five children, the other three being Henry, Will, and Mary. The probate records stated that Allen Hardy was deceased. Other deeds in evidence showed that Henry, Will, and Mary deeded their share of the sixty acres to W.R. McHaney. From this evidence, the trial court determined that Goodwin and Freeman each had a one-fifth interest in the land, and that McHaney's heirs had a three-fifths interest.

Dugal argues that use of the probate records to establish a chain of title was improper, citing Easterling v. Weedman, 54 Ark.App. 22, 922 S.W.2d 735 (1996). In Easterling, the issue concerned the alleged negligence of an insurance agent in establishing an annuity. Appellee, in an attempt to prove the amount of his damages, entered probate documents into evidence showing the amount of the annuities. We held that the documents were hearsay and thus inadmissible.

Easterling is not applicable in this case because appellants made no objection on the basis of hearsay. The objection at trial, which was half-hearted at best, concerned the probative value of all the documents used to establish chain of title. A party cannot change his argument on appeal. Blocker v. Blocker, 57 Ark.App. 218, 944 S.W.2d 552 (1997). Additionally, appellants told the trial court that they had no problem with appellee...