Hughes v. Heppner Lumber Co.

• Decision Date: 06 July 1955
• Citation: 283 P.2d 142,205 Or. 11
• Parties: Mabel A. HUGHES, Appellant, v. HEPPNER LUMBER COMPANY, a corporation, Respondent. W. E. HUGHES, also known as Edwin Hughes, Appellant, v. HEPPNER LUMBER COMPANY, a corporation, Respondent. W. E. HUGHES, also known as Edwin Hughes, and Anita Lutcher, Appellants, v. HEPPNER LUMBER COMPANY, a corporation, Respondent.
• Court: Oregon Supreme Court

Page 142

283 P.2d 142

205 Or. 11

Mabel A. HUGHES, Appellant, v. HEPPNER LUMBER COMPANY, a corporation, Respondent.

W. E. HUGHES, also known as Edwin Hughes, Appellant, v. HEPPNER LUMBER COMPANY, a corporation, Respondent.

W. E. HUGHES, also known as Edwin Hughes, and Anita Lutcher, Appellants, v. HEPPNER LUMBER COMPANY, a corporation, Respondent.

Supreme Court of Oregon.

Argued and Submitted Oct. 26, 1954.

Decided April 29, 1955.

Rehearing Denied July 6, 1955.

See 286 P.2d 126.

James C. Dezendorf, Portland, argued the cause for appellants. On the briefs were Koerner, Young, McColloch & Dezendorf and William J. Moshofsky, Portland.

Gunther F. Krause, Portland, argued the cause for respondent. On the briefs were Krause, Evans & Lindsay, Portland and Mahoney & Fancher, Heppner.

Before LATOURETTE ^*, C. J., and WARNER ^**, LUSK, BRAND and TOOZE, JJ.

LATOURETTE, Justice.

The present appeal involves title to approximately 3,300,000 feet of fir and pine timber situated on 1,852 acres in Morrow county. Plaintiffs, the fee owners, sought to quiet title to the land in question. Defendant cross-complained claiming title to the timber in question. The trial court found for defendant and gave it until December, 1955, in which to remove the timber from the premises. Plaintiffs appeal.

On February 23, 1939, the Hugheses deeded to the Bridal Veil Lumber & Box Company, predecessor in interest of defendant Heppner Lumber Company, 'all pine and merchantable fir timber' situated upon approximately 1,160 acres of land herein involved. On February 25, 1939, the Bridal Veil Lumber & Box Company conveyed to the Hugheses approximately 692 acres of the land in litigation. The deed contained the following reservation: 'The grantor, however, reserves all the pine and merchantable fir timber on the above described premises together with the right to log the same at its convenience.' As a part of the transactions the Lumber Company agreed to and did pay one-third of the taxes thereafter levied on the property. As the timber was cut, as hereinafter explained, it ceased paying taxes. In 1940 the Heppner Lumber Company was incorporated and succeeded to the rights of the Bridal Veil Lumber & Box Company in the timber.

The evidence discloses that the land involved was mountainous, with deep ravines. The timber in controversy is that largely found in the above areas with the exception of a small tract in a remote section of the property which was not listed on the tax roll as timber land and which was admittedly inaccessible. For a number of years thereafter logging was carried on by 'gypo' loggers with horses and the entire area was logged with the exception of the remote part hereinbefore mentioned. As the timber was logged it was delivered to defendant's sawmill to be cut up into lumber. Periodically, as logging was concluded, from 1939 to 1948, inclusive, in order to remove the timber from the tax rolls and relieve the company from paying taxes on the same, its officers and agents executed and delivered affidavits to the county assessor in which it stated that it had cut and removed all the timber situated on the premises involved excepting on a remote and inaccessible portion of the property which had no timber listed on the assessment roll.

At the conclusion of the logging operations in 1948, defendant pulled up stakes and, like the Arabs, folded its tents and silently stole away. Shortly thereafter plaintiffs fenced most of the lands and installed a gate which was kept padlocked.

No claim on the part of defendant was made to any timber remaining on the property until in 1951 when the prices of lumber soared some 400 per cent over that which existed in 1939. It was then that plaintiffs instituted the present suit.

Plaintiffs' position is tersely stated in their brief as follows:

'(1) The respondent has already cut and removed all the timber it ever owned;

'(2) If there is any such timber left (which appellants deny) respondent forfeited its right thereto because a reasonable time for removal has expired, and

'(3) If there is any such timber left (which appellants deny), respondent relinquished its right thereto.'

The controlling feature of the case, in our opinion, is that stated in proposition No. 1 of appellants' brief above set out. In other words, did defendant remove all the merchantable timber as contemplated by the parties in 1939, during the years 1939 to 1948, inclusive?

The parties agree on the issues, at least in respect to this question. Defendant claims and plaintiffs disclaim that the timber now contended for was merchantable timber in 1939. Defendant asserts therefore that they have a reasonable time to remove it. If the timber, however, was not merchantable at that time it follows that the 'reasonable time for removal' doctrine would have no applicability.

A grant of merchantable timber is a grant only of the merchantable timber on the land at the date of the contract. Rayburn v. Crawford, 187 Or. 386, 398, 211 P.2d 483.

What is merchantable timber, in the absence of agreement, is a question of fact. We quote from Dahl v. Crain, 193 Or. 207, 225, 237 P.2d 939, 947, as follows:

'It may be conceded that there is no definition of 'merchantable timber' which will fit all occasions and all localities. Although a term very frequently used in timber sales contracts, as it was used in the contract here, nevertheless, it is one having no definite and fixed meaning. What may be 'merchantable timber' at one time or place may not be deemed such at another time or place. In determining what is covered by the term at a particular time and in a particular locality many factors are considered. Size and quality are of prime importance. Location, accessibility, demand, and market conditions are regarded. We do not assume to enumerate all the elements involved in the term. * * *'

Again, in Parsons v. Boggie, 139 Or. 469, 471, 11 P.2d 280, 281, we said:

'* * * The court must, as far as possible, construe the instrument from the words used as showing what the parties had in mind at the time of its execution. The respondent sold and the appellant bought with the understanding that the timber was to be removed. We must also take into consideration the circumstances surrounding the parties at the time the sale was made; also their attitude toward the subject-matter subsequent to the execution of the contract. * * *' (Italics ours.)

One of the factors in determining the merchantability of timber, according to Glenn Parsons who was employed by defendant Lumber Company and had charge of its cruising and logging operations, is whether or not a timber tract is operable. He was called as a witness by defendant and testified that he had cruised the timber on the tract in question and that in cruising timber the cruiser's objective is to determine, among other things, what is an operable tract. His testimony follows:

'Q. When you say operable, what do you mean by that? A. Some areas due to certain conditions make a tract operable and some of them inoperable due to the volume, terraine [sic], and so on, accessibility, whether you could go in and log it and do it economically.

'* * *

'Q. Now even though you might have some good timber in a certain location, it might not be operable? A. That is right; it would depend upon accessibility along with it.'

Since operability depends upon volume, terrain and accessibility, we are satisfied that under the circumstances of this case defendant never did consider the tracts on which the present timber is located as operable.

Bruce Hoffman was called as a witness by plaintiffs. He is a consulting forester with offices in Portland. He was employed for many years by the government forest service in Alaska, Oregon, Washington and northern California. From 1919 until 1928 his work primarily had to do with pine operations in the vicinity of Klamath Falls, Medford and eastern Washington. He testified that his duties were.

'to make up and consider the lay-out of the areas in regard to pine sales that the Forest Service planned to make, and at the same time, to make a very thorough and complete study of the costs of logging operations as well as manufacturing operations in pine. We attempted to conduct quite a series of time studies and production, and keeping up that work in order to give us the opportunity to know what the mills were operating on in the areas.'

Intermittently he was employed by private companies, one being the Edward Hines Lumber Company in Burns. He testified:

'I cruised and appraised first their large tract, 40,000 acres, on the Rodaugh Mountain, and I attempted to figure out the most practical way of getting that stuff out of there, whether to take it out in logs, and attempt to put a small mill at Seneca, or to the Hines Mills near Burns, or manufacture on the ground in small mills or to put a mill in at Dayville.'

Other employment included that with the Weyerhaeuser Timber Company, the Shevlin-Hixson Company at Bend, and others. He testified that he was familiar with the land in question, having traveled over the area twice. He further testified:

'Q. Now, did you make a sufficient examination of those lands to determine what logging operations had been conducted on the land and to determine the areas which had been logged over? A. We went over the greater part of it.

'Q. And you did see it with that in view, see most of the area when you were over there? A. Yes. Well, as it was lying there, it is characteristic of other similar lands in Eastern Oregon and in Southern Oregon logged over under the conditions of 1939. Operators went in and took the best out and left the rest there. What was left is practically of no value under those conditions at that time.

'Q. In other words, you could state in your opinion that the logs which had been taken out of there--the logging which had taken place there, and during the logging operations which had taken place, all of the timber...