O. P. Link Handle Co. v. Wright

• Decision Date: 28 June 1968
• Citation: 429 S.W.2d 842
• Parties: O. P. LINK HANDLE COMPANY, Appellant, v. C. M. WRIGHT, Sr., et al., Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 842

429 S.W.2d 842

O. P. LINK HANDLE COMPANY, Appellant, v. C. M. WRIGHT, Sr., et al., Appellees.

Court of Appeals of Kentucky.

June 28, 1968.

T. E. Mahan, Williamsburg, for appellant.

J. B. Johnson, Sr., Johnson & Johnson, Williamsburg, for appellees.

PALMORE, Judge.

The appellant O. P. Link Handle Company (hereinafter Link), through its managing agent, Elbert Pike, contracted to buy some standing hickory timber from the appellees, C. M. Wright and wife, Dortha Wright. Shortly thereafter Pike learned that another company had a contract to remove the merchantable timber from the same property, and Link brought this suit in the Whitley Circuit Court to rescind its contract and recover $2000 paid the Wrights at the time of its execution. This court has sustained Link's motion for an appeal from a judgment dismissing its complaint. KRS 21.080; RCA 1.180.

On April 22, 1960, the Wrights entered into a contract by which they sold to W. E. Partin Lumber Company and Marshall Lumber Company ¹ 'all merchantable timber owned by the sellers * * * however, not to cover any timber 8 inches or less in diameter, 12 inches above the ground' standing on some 1200 to 1400 acres of land described as 'a large boundary of land in Whitley County, Kentucky, a short distance from Rockhold, said lands being known as the Criscillis and Lay Land, the Boyd, Delaney and White lands, and usually thought of as being in three localities covering a mountain area back of the home of C. M. Wright, on Kentucky Highway 26, and extending across on the Corn Creek side of said Mountain and in an easterly direction by the way of Kernel Hollow over to the Rollins property on the Meadow Creek Section and being all the timber land owned by the Wrights in said section of Whitley County, title to which was acquired by them March 6, 1957, by deed recorded in Deed Book 192, Pages 136--139, in the office of the County Court Clerk of Whitley County, Kentucky.'

The contract gave the purchasers the right 'to freely move upon and about all of said premises of wooded lands' and 'remain in peaceful possession for the purpose of manufacturing this timber for a period of not to exceed five (5) years. The Purchasers agree to use due diligence in cutting this timber and not to re-cut territory previously gone over during this period.'

On May 24, 1961, Partin gave the Wrights a partial release in which it was recited that whereas the purchasers 'have cut all merchantable timber that they care to cut from the Lay and Criscillis portion of the land, to top of the mountain only, * * * they now release to this portion (sic) their right, title and interest in and to that portion of the land and the timber thereon.'

On May 2, 1962, the Wrights entered into the contract with Link which is the subject of this controversy. The Partin contract was not of record, but Pike and Wright spent two days going over the territory and Pike observed that some of it had been cut over. ² The contract was prepared by Link's attorney, omitting the description. On the day it was signed Pike and Wright took it to a notary public, who inserted the description provided by Wright, as follows: 'Description as shown on deed recorded in Deed Book #192 at Pages Nos. 136--139 inclusive (deed from Justin Potter and Edgar Rogers, and Dora (sic) F. Wright, wife of C. M. Wright, Sr.).' ³

By the terms of this contract the Wrights sold Link 'the sum of 250,000 feet of merchantable hickory timber which is useable (sic) in the buyer's business operation' ⁴ on the described lands and gave the buyer 'full license and authority to enter upon the premises * * * and do all acts and things necessary to cut and remove the said trees and timber therefrom' for a period of five years. It was further provided that the buyer was to have 'the exclusive right and option to cut and remove the balance of any portion thereof * * * remaining upon the within described lands after the removal of the initial 250,000 feet sold hereby, and 'in the event additional hickory timber is cut and removed by the buyer, the same shall be paid for at the rate of $8 per thousand feet with measurement made by handle measurement as aforesaid. In the event that there is not sufficient merchantable hickory timber useable (sic) in the seller's business to fulfill the said 250,000 feet of timber sold and conveyed herein, then in that event reimbursement shall be made by the seller to the buyer at the rate of $8 per thousand feet for all shortage of timber under the said 250,000 feet conveyed hereby.'

Although the contract did not warrant the existence of 250,000 feet of hickory on the described property, and provided specifically for a refund of $8 per thousand in the event of a shortage, it contained no reference to the Partin contract and placed no condition or qualification on Link's 'full license and authority' to enter upon the premises (all the premises) and do all things necessary to cut and remove the hickory timber, or upon Link's 'exclusive right and option' to cut and remove whatever remained after removal of the initial 250,000 feet. Yet at the time it was signed Partin had three more years in which to remove all of the merchantable timber, including hickory, standing on that portion of the territory not theretofore cut over.

Pike began to work on the cut-over area and removed one load of timber. On the next day his timber cutter discovered from a man he sought to hire as a logger that 'you ain't got no timber up there, son, to cut,' because it had been sold to Partin. Pike went to see Partin, saw his contract, and immediately contacted Wright. Wright took the position that the contract entitled Link to get only such hickory timber as was standing after Partin had cut over the area. In other words, he contended that Link was to follow after Partin and take whatever usable hickory Partin saw fit to leave. The Wrights' defense to Link's complaint is, in substance, that regardless of what the contract says, that was the real agreement and it has not been breached. Link denies that this was the understanding and relies on the parol evidence rule, under which the terms of an unambiguous contract cannot be varied by extrinsic evidence. Cf. Gibson v. Sellars, Ky., 252 S.W.2d 911, 913, 37 A.L.R.2d 1435 (1952).

Link's complaint pleaded the two contracts as exhibits. It alleged also that Link was unaware of the Partin contract and that the Wrights had fraudulently concealed its existence. Though we are of the opinion that the complaint stated a cause of action without regard to the fraud allegation, and that Link's recovery does not depend on fraud, it is necessary to discuss the subject because the Wrights treat it as a major issue in their brief. They say that Link's motion for appeal in this court contains the statement, 'No fraud is claimed in the case now under consideration,' and that this statement amounts to a judicial admission which destroys the keystone of Link's case. The statement is taken out of context. It follows quotation of a headnote from Gibson v. Dupin, Ky., 377 S.W.2d 585 (1964), reading, 'Party is bound by his contract and ignorance of its import is no defense in absence of fraud.' The obvious meaning of the remark, 'No fraud is claimed,' is that the Wrights, both of whom said they read and understood the contract before they signed it, were not claiming that they had been defrauded.

Although the contract between Link and the Wrights specified 250,000 feet of hickory, for which Link paid $2,000, the provisions for adjustment at the rate of $8 per thousand in the event of an overage or shortage make it clear that the figure of 250,000 feet was merely an estimate. The vital feature of the contract was not how much hickory was there, but the fact that whatever was there was sold to Link, with five years to get it out. Unfortunately, most of it already belonged to Partin, so the essential ground for relief presented by the complaint is failure of consideration, regardless of whether it was attended or compounded by fraud.

W. E. Partin testified that by the time the Link contract was made he had cut over about 200 or 300 acres. Others estimated the cut-over area at 300 to 400 acres. Under any view of...