Luedinghaus Lumber Co. v. Luedinghaus

• Decision Date: 12 May 1924
• Docket Number: 4166.
• Citation: 299 F. 111
• Parties: LUEDINGHAUS LUMBER CO. et al. v. LUEDINGHAUS et al. [1]
• Court: U.S. Court of Appeals — Ninth Circuit

299 F. 111

LUEDINGHAUS LUMBER CO. et al. v. LUEDINGHAUS et al. ^[1]

No. 4166.

United States Court of Appeals, Ninth Circuit.

May 12, 1924

The appellees brought a suit against the appellants to cancel a contract. The appellant the Luedinghaus Lumber Company by cross-complaint sued for specific performance of the contract. The contract was made on October 4, 1919. It provided for the sale and transfer to the lumber company of a sawmill, a shingle mill and other buildings, and various tracts of land. In paragraph II it was recited that the appellees owned certain described timber lands. Paragraph VIII provided as follows:

'The vendors estimate that there is 100,000,000 feet of timber on the lands described in paragraph II hereof, and it is understood and agreed that in the event that when said timber is cruised if there is not the above amount of 100,000,000 feet thereon, the vendors agree to purchase in the immediate vicinity of the above described and referred to lands an amount of timber sufficient to bring the total amount of timber up to 100,000,000 feet, and to convey good title thereto to the company by proper legal instruments, and these instruments of conveyance shall be placed in escrow as provided in paragraph X of this agreement. Such purchases shall be made and the deeds placed in escrow as aforesaid within 12 months from the date hereof. The vendors reserve the option, if they do not desire to purchase and deliver conveyances for sufficient timber to bring the total amount aforesaid up to 100,000,000 feet, to allow a credit on note No. 19 for the shortage, computed at the rate of $2.50 per 1,000 feet. If the cruise shall disclose that there is on said lands timber in excess of 100,000,000 feet, the company agrees to pay the vendors for the excess at the rate of $2.50 per 1,000 feet. The cruise provided for in this paragraph shall be made by a competent cruiser employed by the vendors and the company shall employ a competent cruiser to check the cruise of the vendors, and, if any difference between the cruisers arise, the two cruisers aforesaid shall select a third cruiser, and the three cruisers shall thereupon determine the amount of timber on the lands. A decision of a majority of the three cruisers shall be accepted as a true and correct cruise, and binding on the parties hereto.'

The total contract price was $515,000, of which $50,000, was paid in cash on the execution of the contract. Provision was made for payment of the remainder in installments. The appellees in their complaint alleged breach of the contract by the lumber company, in that the company had failed to cut timber on section 32, whereas the contract required that such timber should be cut and paid for to the appellees at $3.50 per thousand in reduction of one of the notes representing the purchase price; also in that the lumber company had torn down and removed a shingle mill on said premises without the appellees' consent, and had refused and failed to pay notes when due as provided in the contract. There were other allegations of breach. The appellees prayed for cancellation of the contract, and for such other relief as the court might determine they were entitled to.

The lumber company answered, denying that it had violated the provisions of the contract, and it presented a cross-complaint in which it alleged breach of the contract by the appellees, in that they failed to furnish abstracts of title to the property sold within the time agreed, and that some of the abstracts failed to show a merchantable title that the timber lands referred to in paragraph VIII were cruised by three cruisers, and the amount of timber thereon ascertained to be but 60,745,000 feet, being a shortage of 39,255,000 feet, on account of which the lumber company was entitled to a credit of $98,137.50 upon note No. 19. The prayer of the cross-bill was that the cruise so alleged to have been made under the provisions of paragraph VIII of the contract be decreed to be conclusive upon the parties, that the lumber company have a credit of $98,137.50, with interest, upon its notes, and that the appellees specifically perform the contract by deeding all of the lands and by furnishing abstracts thereto showing merchantable title.

Upon the pleadings and the proof the court held that the provision of paragraph VIII amounted to an agreement to arbitrate, and that it was subject to abrogation by the appellees, but by its decree the court denied the cancellation and surrender of the contract.

W. H Abel, of Montesano, Wash., and A. A. Hull and J. E. Murray, both of Chehalis, Wash., for appellants.

F. D. Oakley, of Tacoma, Wash., and J. B. Howe, of Seattle, Wash., for appellees.

Before GILBERT, HUNT, and RUDKIN, Circuit Judges.

GILBERT Circuit Judge (after stating the facts as above).

A motion to dismiss the appeal is based on three grounds: First, that the transcript was not filed in this court until after the return day of the citation, and no legal orders were entered extending the time for filing the same. But it appears from the record that the reason why the transcript was not filed on or before the return day was that the appellees procured ex parte orders from the trial court extending their time to propose amendments to the statement of the testimony. Those orders by their own force extended the time for filing the transcript. Second, it is said that the appellants waived their right of appeal by complying with the decree. What the appellants did was to make certain payments, so as not to jeopardize their rights under the contract with the appellees. In so doing there was no waiver of the right to appeal. Josevig-Kennecott Copper Co. v. Howarth Co. (C.C.A.) 261 F. 567; Hoogendorn v. Daniel, 202 F. 432, 120 C.C.A. 537; Dakota County v. Glidden, 113 U.S. 222, 5 Sup.Ct. 428, 28 L.Ed. 981. Equally without merit is the third ground for dismissal, that the decree is not final. The decree finally disposed of the principal contentions between the parties, as will more fully appear upon the discussion of the merits of the controversy. The motion is denied.

We are unable to agree with the court below that the provision in the contract for the determination of the amount of timber on the lands was an agreement to arbitrate a dispute should one arise between the parties, or that the effect of the agreement and the question of its revocability are determinable by the rule of the common law as to arbitration and award. Arbitration presupposes a dispute and is a recognized common-law method of settling disputes and controversies. If there is no matter in dispute, there is no question for arbitration. Omaha v. Omaha Water Co., 218 U.S. 180, 30 Sup.Ct. 615, 54 L.Ed. 991. There is a broad...