Graysonia-Nashville Lumber Company v. Saline Development Company

• Decision Date: 12 April 1915
• Docket Number: 311
• Citation: 176 S.W. 129,118 Ark. 192
• Parties: GRAYSONIA-NASHVILLE LUMBER COMPANY v. SALINE DEVELOPMENT COMPANY
• Court: Arkansas Supreme Court

176 S.W. 129

118 Ark. 192

GRAYSONIA-NASHVILLE LUMBER COMPANY v. SALINE DEVELOPMENT COMPANY

No. 311

Supreme Court of Arkansas

April 12, 1915

Appeal from Howard Chancery Court; James D. Shaver, Chancellor affirmed.

STATEMENT BY THE COURT.

The Saline Development Company instituted this action against the Graysonia-Nashville Lumber Company to recover the value of certain timber which it alleged the defendant company cut from its land without paying therefor. The defendant filed an answer in which it claimed title to the timber cut from the land, and also the title to that yet standing on the land and alleged that the plaintiff's claim was a cloud on its title to the timber. The defendant asked that the case be transferred to chancery, and on its motion, the cause was transferred to equity and heard and determined there. The facts briefly stated, are as follows:

On the 11th day of January, 1911, the Saline Development Company, a corporation, entered into a written contract with the Nashville Lumber Company, also a corporation, whereby the former corporation sold the latter all the merchantable timber standing upon certain lands known as the Barefield tract, in Howard County, Arkansas, the lands comprising 1,562 1/2 acres.

The contract recited that the timber had been estimated by Lemieux Brothers and comprised, in the aggregate, 2,623,000 feet, or thereabouts, for which the purchaser had made settlement with the seller at the rate of $ 2 per thousand feet. The contract further recited that it is conceded by both parties that the said estimate is below the actual amount of merchantable timber upon said lands and that it is understood that the purchaser will pay at the rate of $ 2 per thousand feet for all the timber exceeding the amount estimated.

The contract also recites that the vendor has on the same day executed to the purchaser a deed conveying the timber purchased, and this deed is referred to and made a part of the contract. The contract in question was signed by the Saline Development Company by W. H. Toland, general manager and by the Nashville Lumber Company by H. C. Anderson assistant manager. The contract then contains the following clause: "I agree to the above terms and conditions and guarantee the payment of overcharge by Graysonia-Nashville Lumber Company. A. C. Ramsey, G. M., G. N. L. Co."

On the 11th day of January, 1911, the Saline Development Company executed a deed to the Nashville Lumber Company to the merchantable timber upon certain lands described in the deed containing in the aggregate 1,562 1/2 acres. The deed recites that it is executed for the purpose of carrying into effect the former contract of the Saline Development Company with the Nashville Lumber Company. The consideration recited in the deed is the sum of $ 5,298 cash at the time of the execution and delivery of the deed and remainder due, if any, payable as the cutting of the timber proceeds at the rate of $ 2 per thousand feet.

The Graysonia-Nashville Lumber Company was organized in June, 1910. At the time of its organization, it took over a large portion of the assets of the Nashville Lumber Company and of the Graysonia-McLeod Lumber Company. The Nashville Lumber Company executed to it a timber deed for most of the timber which it had purchased from the plaintiff company, and the defendant company agreed to pay therefor the sum of $ 3 per thousand feet.

W. H. Toland was general manager of the Saline Development Company, and acted for it in making the sale of the timber to the Nashville Lumber Company.

A. C. Ramsey was a stockholder in the plaintiff company, and was the general manager of both the Nashville Lumber Company and of the defendant company at the time the contract was entered into.

He acted for the Nashville Lumber Company in making the contract, but the contract was signed by H. C. Anderson, assistant general manager of the Nashville Lumber Company.

Anderson testified that as assistant manager, he was authorized to buy timber lands for the Nashville Lumber Company, and that he had authority from that company to make the contract with the plaintiff company; that he was employed by the defendant company to take charge of its timber lands, and was also treasurer of that company. He stated that he did not know how far his authority to purchase timber lands for the defendant company extended, but that he had bought timber lands for it; that the defendant company never turned down any purchase of land or timber while he was in its employ; that he had made settlements for the amount of timber that had been purchased by him for the defendant company; that it was not exclusively his duty to ascertain what was due to different parties who delivered timber to the defendant company, but that he did that character of work and that defendant company had not at any previous time refused to abide by any settlement he had made; that the market value of timber of the character of that on the Barefield lands was $ 2 per thousand in 1911; that Doctor Toland came to him for a settlement under the contract in question in this case, and that he admitted that the defendant company owed the plaintiff company something over $ 700 on settlement for timber.

W. W. Brown was president of the defendant company, and also was connected with the Nashville Lumber Company at the time the contract in question was entered into. He stated that he was vice president of the Nashville Lumber Company at the time A. C. Ramsey was its general manager, and that Ramsey had authority to buy timber and land for that company; that he knew that Ramsey had purchased the timber on the Barefield tract and approved the purchase. Brown continued as president of the defendant company until some time in November, 1912, at which time W. E. Grayson became president. The timber in controversy was cut from the land while Brown was president, and Ramsey general manager of the defendant company.

W. E. Grayson testified that only the executive committee had authority to purchase timber and lands for it, and that he did not know anything of the purchase of the timber on the Barefield lands until after he became president of the defendant company in November, 1912.

According to the by-laws of the defendant company, the executive committee had power to make all contracts concerning the purchase of land for the company. The by-laws provided that the general manager should exercise full control over the operation of the mills, tramways and other property of the company, and that he should have the care and management of all the company's property, real and personal; that his acts should be subject to the approval of the executive committee.

The chancellor found that on the 11th day of January, 1911, the plaintiff company entered into a written contract with the Nashville Lumber Company for the sale of the merchantable timber on the Barefield tract of land, and that contemporaneously it executed its deed to the Nashville Lumber Company conveying the timber on said lands to it; that said contract provided for the payment of $ 2 per thousand feet based upon the estimate contained in the contract, which was paid in cash, and for the further payment of $ 2 per thousand feet by the Nashville Lumber Company for all the timber cut in excess of the estimate; that the recitals in the deed from the plaintiff company to the Nashville Lumber Company were of such kind and character as to put the defendant company upon inquiry such as would have disclosed the rights and equities of the plaintiff company; that A. C. Ramsey, general manager of the defendant company, had actual notice of the terms and conditions of the contract under consideration; that the defendant company is not an innocent purchaser of the timber taken from the Barefield land, and is liable to the plaintiff company for all timber cut by it on said lands in excess of the estimate mentioned in the contract between the plaintiff company and the Nashville Lumber Company at the rate of $ 2 per thousand feet.

The chancellor then appointed a master to take testimony and ascertain the amount of timber that had been cut by the defendant company from the Barefield lands. Upon the coming in of the report of the master, the court found that the plaintiff company had been paid the sum of $ 5,246 on the contract between it and the Nashville Lumber Company; that the timber paid for amounted 2,623,000 feet at $ 2 per thousand; that 543,243 additional feet had been cut from the lands, and that the defendant company owed the plaintiff company for this 543,243 feet of timber at $ 2 per thousand feet, which amounts to $ 1,086.

A decree was entered in favor of the plaintiff company in accordance with the finding of the chancellor and the defendant company has appealed.

Decree affirmed.

W. C. Rodgers, for appellant.

1. It is fundamental that the minds of the parties to a contract must meet and agree upon all the essential features of the contract. 78 Ark. 586; 90 Ark. 437; Id. 131; 95 Ark 421; 97 Ark. 613. There is no meeting of the minds of the...