Grays Harbor County v. Bay City Lumber Co.

• Citation: 289 P.2d 975,47 Wn.2d 879
• Decision Date: 22 November 1955
• Docket Number: No. 32925,32925
• Court: United States State Supreme Court of Washington
• Parties: GRAYS HARBOR COUNTY, Respondent, v. BAY CITY LUMBER COMPANY, a corporation, Appellant, Stillman Sawyer, Dexter Charles, Jerome Smith and Roy Levering, Cross-Appellants.

Page 879

47 Wn.2d 879

289 P.2d 975

GRAYS HARBOR COUNTY, Respondent, v. BAY CITY LUMBER COMPANY, a corporation, Appellant,

Stillman Sawyer, Dexter Charles, Jerome Smith and Roy

Levering, Cross-Appellants.

No. 32925.

Supreme Court of Washington, En Banc.

Nov. 22, 1955.

Donley & Ingram, Aberdeen, for appellant.

Holman, Mickelwait, Marion, Black & Perkins, Burroughs B. Anderson, Seattle, amici curiae.

Robert L. Charette, Aberdeen, for respondent.

John E. Close, Aberdeen, for cross-appellants.

ROSELLINI, Justice.

This is a damage action for the conversion of certain timber owned by the respondent, Grays Harbor county, referred to herein as 'the county.' The original trespass and conversion were committed by the cross-appellants, who are referred to as 'the loggers.' The county elected to bring its action against the party to whom the loggers sold the timber after it was cut, Bay City Lumber Company, the appellant, referred to herein as 'the lumber company,' which interpleaded the loggers as cross-defendants.

The logs in question were taken from the north half of section 12, township 20 north, range 11 west W.M., Grays Harbor county, owned by the county. The north half of the southwest quarter of this section is owned by W. C. Abel, who, prior to the trespass, sold to the loggers, for a consideration of $4,000, the right to cut the merchantable timber growing thereon. At the time of this sale, Abel represented to the loggers that the only merchantable timber in that vicinity was located on the 80-acre tract owned by him and that the timber stood in four distinct areas or patches.

The tract being unmarked, the loggers attempted to secure the services of a surveyor employed by Rayonier, Inc., a company which conducts extensive timber operations in Grays Harbor county. They were told that the surveyor would not be available for several weeks. Deciding that they could not afford to wait that length of time, the loggers attempted to survey the land themselves. Referring to a Metsker map and a Geodetic survey map, using a compass and a length of rope, and starting from a point which they believed to be a recognized marker, they attempted to locate themselves on their property. They established a north cutting line, beyond which they did not cut. They observed approximately 100 feet of merchantable timber lying beyond this cutting line. An aerial photograph (taken after the logging operation was finished), showing four distinct patches of timber within the area which their attempted survey established, was introduced in evidence by the county.

All of these facts were included in the trial court's findings. There were findings that the value of the timber was $8 per thousand board feet at the time and place of the original conversion (stumpage value), and $35 per thousand board feet at the time and place of conversion by the lumber company--the difference being the value added by cutting and transporting the logs to the lumber company's place of business.

For the 431,300 board feet converted by the lumber company, judgment was given for the county against the lumber company and for the lumber company against the loggers in the sum of $15,095.50, being $35 per thousand board feet, together with interest at six per cent per annum from the date of the last conversion, the court having found as a fact that the taking of the logs by the loggers was 'heedless and wanton, not unintentional and inadvertent,' and that the loggers, by their conduct, showed that they recognized the need of a survey but decided to proceed without one.

While, as the appellants contend, this court has said many times that punitive damages are not recoverable in the absence of a statute expressly authorizing them, we are also committed to the rule denying to the subsequent converter the right to deduct the value added by the labor and expenditures of the original converter when the original conversion was wilful. The rule was first recognized in Chappell v. Puget Sound Reduction Co., 27 Wash. 63, 67 P. 391, and most recently stated in Watkins v. Siler Logging Co., 9 Wash.2d 703, 116 P.2d 315, 328, as follows:

'If the original conversion was in mala fides, then damages in an action against a subsequent converter should be based upon the market value of the property as of the time and place the defendant first exercised control and dominion over it, and this rule applies even though the subsequent converter is an innocent purchaser for value. E. E. Bolles Wooden-Ware Co. v. United States, 106 U.S. 432, 1 S.Ct. 398, 27 L.Ed. 230; United States v. Perkins, C.C., 44 F. 670; Central Coal & Coke Co. v. John Henry Shoe Co., 69 Ark. 302, 63 S.W. 49; Tuttle v. White, 46 Mich. 485, 9 N.W. 528, 41 Am.Rep. 175.'

No reference was made to earlier Washington cases.

The principal question to be determined on this appeal is whether the trial court was justified in finding that the acts of the loggers were wilful and in mala fides within the meaning of the quoted rule of damages. In its memorandum decision, the court made it clear that it had found no actual intent to trespass on the part of the loggers, but felt that they must be held to have acted in bad faith, as a matter of law, when they went into unmarked territory and proceeded to cut timber without benefit of a survey made by a 'qualified' surveyor.

The essence of the court's conclusion is that in proceeding without a survey, the loggers knowingly ran the risk of trespassing, that is to say, they recognized the possibility that the line which they drew might lie beyond the true boundary of the land on which they had a right to cut timber. If this knowledge rendered the resulting trespass wilful or in bad faith within the meaning of the pertinent rules of damages, the judgment of the trial court must be upheld.

We have been unable to discover any statute imposing upon one who purchases timber in unmarked territory, the duty to obtain a survey by a licensed or qualified surveyor, and we have found no case which deals with the precise problem presented here. As McCormick on Damages 497, § 126, has commended: 'Classifying trespassers as 'innocent' and 'willful' is easy, but actually distinguishing the sheep from the goat is not so easy.' Before laying down such an unswerving line of demarcation, it is well to examine the theory of damages and the cases in which the higher measure has been imposed.

This court early committed itself to the view that the doctrine of exemplary or punitive damages is unsound in principle and that such damages cannot be recovered except when explicitly allowed by statute. We have so held from Spokane Truck & Dray Co. v. Hoefer, 2 Wash. 45, 25 P. 1072, 11 L.R.A. 689 to Anderson v. Dalton, 40 Wash.2d 894, 246 P.2d 853, 35 A.L.R.2d 302. However, we have adopted the punitive measure of damages where a trespass or conversion is wilful or in bad faith. Fischnaller v. Sussman, 167 Wash. 367, 9 P.2d 378; Watkins v. Siler Logging Co., supra; Parks v. Yakima Valley Production Credit Ass'n, 194 Wash. 380, 78 P.2d 162; Glaspey v. Prelusky, 36 Wash.2d 592, 219 P.2d 585. In the latter two cases, the converted goods were of fluctuating value, and the measure of damages imposed was the highest market value within a reasonable time after the taking. See, also, United States v. Kelly, 3 Wash.T. 421, 17 P. 878.

It was recognized in the early case of Bailey v. Hayden, 65 Wash. 57, 117 P. 720, 721, an action brought under the trebledamage statute (now RCW 64.12.030, 040), that the wrongdoer is punished and the owner more than compensated when no allowance is made for the value added by the former's labor and expenditures. We held in that case that the measure of damages to be trebled was the stumpage, not the market value after cutting and removal. In discussing the common-law rule allowing recovery of the higher value where the trespass is wilful, we stated that such damages are punitive, not merely compensatory, and quoted from Beede v. Lamprey, 64 N.H. 510, 15 A. 133, 10 Am.St.Rep. 426, as follows:

"In cases of conversion by willful act or fraud, the value added by the wrongdoer after the conversion is sometimes given as exemplary or vindictive damages, or because the defendant is precluded from showing an increase in value by his own wrong, and from claiming a corresponding reduction of damages."

In commenting on the quoted portion of the New Hampshire case, we said:

'But whether the larger damages be frankly called vindictive damages, or are allowed on the last-mentioned ground without any express name, their nature is the same. It is obvious that the increased measure is allowed, not as compensation to the person wronged, but as punishment to the wrongdoer. It is not a mere question of terms, but of the inherent quality of the thing. The increased measure is punitive in its very nature, in that it exceeds the true measure of compensation. It is plain that the person whose trees are cut suffers exactly the same injury where the trespass is involuntary as where it is willful. In each case he suffers the loss of his trees.'

It is argued that since the owner may replevy his property wherever he may find it, he should be able to recover its value at whatever time and place he is entitled to replevy it. But this argument is equally valid in the case where the conversion was inadvertent, and yet under such circumstances the wrongdoer is not liable in damages for the increased value. The theory under which replevin is allowed bears no consistent relation to the various measures of damage allowed when the latter remedy is elected. For example, the innocent purchaser from a wilful converter is liable in damages only for the value of the goods at the time and place of his own conversion and cannot be held for any value which he may add to them by his own labors. Yet, if the owner finds the goods in the hands of an innocent purchaser after he has enhanced their value, they may be...