Learned v. Holbrook

• Decision Date: 05 February 1918
• Citation: 87 Or. 576,170 P. 530
• Parties: LEARNED ET AL. v. HOLBROOK ET AL.
• Court: Oregon Supreme Court

170 P. 530

87 Or. 576

LEARNED ET AL. v. HOLBROOK ET AL.

Supreme Court of Oregon

February 5, 1918

Department 2.

Appeal from Circuit Court, Multnomah County; George N. Davis, Judge.

Action by Otis E. Learned and others against Merritt L. Holbrook and another. Judgment for defendants, and plaintiffs appeal. Reversed and remanded, with directions.

Judgment affirmed on petition for rehearing, 171 P. 222.

Prior to March 12, 1903, defendants were the owners of an undivided one-fourth interest in certain property situate in St. Johns. Oak Park Land Company and the estate of B. O. Severance were the owners of the remaining three-fourths interest. An agreement partitioning the property was entered into, and as a part of this agreement the defendants executed and delivered the following paper:

"Know all men by these presents, that we, Merritt L. Holbrook and F. S. Doernbecher, are held and firmly bound unto Oak Park Land Company, a corporation, Otis E. Learned, and the estate of B. O. Severance, deceased, in the sum of $2,000 in United States gold coin, to be paid to the said Oak Park Land Company, Otis E. Learned, and the estate of B. O Severance, deceased, their heirs, successors, executors administrators, or assigns, as liquidated damages for a failure to comply with and fulfill the conditions of this bond as hereinafter provided; for the payment of which well and truly to be made we do bind ourselves, our heirs executors and administrators, firmly by these presents.

"Sealed with our seals and dated the 12th day of March, A. D. 1903.

"The conditions of this obligation are as follows: All of the parties hereto, are jointly the owners of fractional blocks numbered 9, 11, 12, and 13 and river lots numbered one (1) to fourteen (14), both inclusive, in James John's addition to St. Johns, and river lot numbered 'A,' in James John's second addition to St. Johns, all in the county of Multnomah and state of Oregon. The said ownership being held as follows: M. L. Holbrook and F. S Doernbecher an undivided one-quarter, and Oak Park Land Company, Otis E. Learned, and the estate of B. O Severance, deceased, the remaining undivided three-quarters, and besides this property the said M. L. Holbrook and F. S. Doernbecher are the owners of fractional block numbered seven (7), known as the Knight Block in James John's addition to St. Johns, in said county and state. In an endeavor to adjust and reconcile the several interests acceptably to all parties hereto, an arrangement for a division of the property has been made and mutually agreed to, whereby the said M. L. Holbrook and F. S. Doernbecher are to become the exclusive owners of fractional blocks 11, 12, and 13, and river lots 7 to 14, inclusive, and the said Oak Park Land Company and Otis E. Learned are to become the exclusive owners of the remainder of all properties hereinbefore mentioned. The foregoing conditions and arrangements are to be complied with at and before the delivery of this bond; but a part, which is indeed a vital part of the consideration moving the said Oak Park Land Company, Otis E. Learned, and E. Quackenbush, administrator of the estate of B. O. Severance, deceased, is an agreement on the part of the said M. L. Holbrook and F. S. Doernbecher to erect a sawmill upon their portion of the above-mentioned property of 50,000 feet per day capacity, and to begin the actual construction thereof within sixty (60) days from this date, and to continue the said construction until the said mill is fully completed and ready for active operation, and the time of completion and active operation is to be not later than the 1st day of September, A. D. 1903. And in the event of the said sawmill being so completed on or before the 1st day of September, A. D. 1903, this obligation shall be void, otherwise to remain in full force and virtue."

It is admitted that the property was partitioned in the manner indicated in the above instrument, and that defendants sold the property allotted to them without erecting a mill thereon. Oak Park Land Company assigned its cause of action to the plaintiff Quackenbush, who was also duly appointed trustee of the estate of B. O. Severance. This action is brought to recover the sum of $2,000 as liquidated damages for the failure and refusal of defendants to construct the mill in question.

The case was tried without a jury. The findings and judgment were for defendants, and plaintiffs appeal.

Miller Murdoch, of Portland (V. A. Crum, of Portland, on the brief), for appellants. R. W. Montague, of Portland (Wood, Montague & Hunt, of Portland, on the brief), for respondents.

McCAMANT, J. (after stating the facts as above).

The defendant Holbrook was permitted to testify over plaintiff's objection and exception as follows:

"Q. What was the understanding among the parties, if there was any, as to the necessity of vacating streets intervening between the different parcels of that property? A. It was clearly understood by everybody interested in the transaction, and who knew the property and knew what it was, that a sawmill could not be erected there unless the streets were vacated. Nothing could be more clearly understood than that. That was discussed frequently, and Mr. Powers assured me there would be no trouble about getting the streets vacated."

This testimony was clearly inadmissible. The parties had reduced their agreement to writing, and their intent and understanding are to be gathered from the writing. Section 713, L. O. L.; Maxson v. Ashland Iron Works, 85 Or. 345, 353, 166 P. 37, 167 P. 271; Muir v. Morris, 80 Or. 378, 403, 154 P. 117, 157 P. 785. In a case tried without the intervention of a jury the admission of incompetent testimony will often be disregarded, the court presuming that the improper evidence has been disregarded by a trier learned in the law. Zelig v. Blue Point Oyster Co., 61 Or. 535, 544, 113 P. 852, 122 P. 756; Williams v. Burdick, 63 Or. 41, 49, 125 P. 844, 126 P. 603; Latourette v. Miller, 67 Or. 141, 147, 135 P. 327. We cannot indulge that presumption in the case at bar. The conclusions of the lower court are based on the assumption that the vacation of certain streets in St. Johns was contemplated by the parties, and that their agreement was conditioned thereon.

The defense was based on the alleged impossibility of performing the agreement sued on. The third finding, duly excepted to, was as follows:

"That owing to the size and shape of the property in the city of St. Johns upon which the agreement hereinbefore set forth contemplated the erection of a mill, it was impossible to erect a sawmill of the capacity mentioned in the contract set forth in the complaint, or to operate the same, unless the streets intervening between the separated portions of said property should be vacated so that said property could be used, and that such facts were known and within the contemplation of all the parties to such agreement at the time of making the same and thereafter."

This finding is wholly without competent evidence to support it. The defendants introduced expert testimony to show that the lots set apart to them on the partition were too small in area to admit of the profitable operation of a sawmill thereon. This testimony does not lead to the conclusion that their contract was impossible of performance. In Reid v. Alaska Packing Co., 43 Or. 429, 436, 73 P. 337, 339, Mr. Justice Bean says:

"The rule to be deduced from the authorities is that, if one enters into a valid contract, for a sufficient consideration, to do a lawful thing, possible in itself--that is, in the nature of things--to be done, he must either carry out the contract according to its terms or answer in damages for a failure to do so. The mere impossibility of performance in fact will not be enough, but the contract must be obviously impossible upon its face before such a defense can be made."

The contract in that case was to pack, in Alaska, salmon "exactly like Puget Sound fancy sockeye." The inference of impossibility was sought to be drawn from evidence that no such salmon are caught in Alaska. It was held that they might be caught in Puget Sound and transported to Alaska for packing, or that such salmon might be found in Alaska at some time in the future. The decision is to the effect that "impossible" does not mean "impracticable." A party who contracts to do that which is not inherently impossible on the face of the agreement is not to be released from his obligation by proof that it would be commercially unprofitable to carry it out. The doctrine of the above case is affirmed in Anderson v. Adams, 43 Or. 621, 630, 74 P. 215; Fleishman v. Meyer, 46 Or. 270, 271, 80 P. 209; Zanello v. Smith & Watson Iron Works, 62 Or. 213, 217, 124 P. 660. It appears from the defendants' testimony that it is not impossible to erect a sawmill on the property in question; all that the testimony tends to prove is that such a mill could not be profitably operated without control of a larger piece of land and without the vacation of certain streets which intersect the property. The court erred in deducing the third finding from this testimony.

It is admitted that under date of April 8, 1903, the plaintiff Quackenbush signed and delivered the following instrument:

"Referring to a certain bond executed by F. S. Doernbecher and M. L. Holbrook on the 12th day of March, 1903, in behalf of the Oak Park Land Company and Otis E. Learned, wherein time is made the essence of the matter of the beginning and completion of a sawmill on certain land of St. Johns mentioned in the said bond. This is to certify the modification by mutual consent of that portion of said bond relating to the time when said mill is to be begun and completed; that is to say, if the proceedings to be

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