St. Paul & Tacoma Lumber Co. v. Fox

• Decision Date: 01 October 1946
• Docket Number: 30031.
• Citation: 173 P.2d 194,26 Wn.2d 109
• Court: Washington Supreme Court
• Parties: ST. PAUL & TACOMA LUMBER CO. v. FOX et al.

173 P.2d 194

26 Wn.2d 109

ST. PAUL & TACOMA LUMBER CO. v. FOX et al.

No. 30031.

Supreme Court of Washington

October 1, 1946

Department 1

Action by the St. Paul & Tacoma Lumber Company against R. S. Fox and his wife and others for specific performance of a contract to sell an interest in a corporation and to assign an option contract, wherein defendants filed a demurrer. From a judgment for defendants, plaintiff appeals.

Affirmed.

Appeal from Superior Court, King County; Donald A. McDonald, judge.

Grosscup, Ambler & Stephan, of Seattle, and Eisenhower, Hunter & Ramsdell, of Tacoma, for appellant.

McMicken Rupp & Schweppe and Mary Ellen Krug, all of Seattle, for respondents.

JEFFERS Justice.

The only record Before us on this appeal is the second amended complaint filed by plaintiff, St. Paul & Tacoma Lumber Company, a corporation, on March 13, 1946; a demurrer filed by defendants, R. S. Fox and Margaret Fox, his wife, Kosmos Timber Company, Mountain Lumber Company, Tacoma Export Lumber Company, R. S. M. Nicholson, Seattle Export Lumber Company the estate of Johanne Fox, deceased, and R. S. Fox, executor of the estate of Johanne Fox, deceased, United States Plywood Corporation, and Soundview Pulp Company, to the second amended complaint (hereinafter referred to as the complaint) on the ground that the complaint does not show upon its face facts sufficient to constitute a cause of action; an order sustaining such demurrer, the order merely stating that 'defendants' demurrer to the plaintiff's second amended complaint is hereby sustained'; a judgment of dismissal of the cause made and entered on April 25, 1946, after plaintiff had elected not to plead further but to stand upon the complaint; and notice of appeal by plaintiff from the judgment entered.

Appellant, St. Paul & Tacoma Lumber Company, a corporation (hereinafter referred to as St. Paul, or appellant, except where the complaint is quoted), assigns as error the sustaining of respondents' demurrer to the complaint, and the dismissal of the action.

The only issue Before this court being the question of whether or not the complaint states a cause of action, it will be necessary to set out what we deem to be the essential allegations relied upon by appellant to support its contentions.

The complaint consists of some forty-seven paragraphs, exclusive of the prayer. The first twenty-five paragraphs allege the identity of the parties appellant and respondent, the interrelations existing between all parties prior to the present controversy, the nature of the business conducted by the parties, and the timber requirements of each.

Johanne Fox was the former wife of R. S. Fox. She died, and R. S. Fox was duly appointed executor of her estate. A decree of solvency was entered in her estate on December 22, 1941. Margaret Fox is the present wife of R. S. Fox.

Mountain Lumber Company was a Washington corporation, which, on October 4, 1944, filed notice of voluntary dissolution, which notice named R. S. M. Nicholson as trustee to wind up the affairs of the corporation.

It is alleged in paragraph 5 of the complaint: 'That Tacoma Export Lumber Company is either a corporation or a style name under which the properties of Mountain Lumber Co. are now being operated or under which the present owners presently intend to operate.'

Kosmos Timber Company is a Washington corporation, having its principal place of business at Seattle, Washington. It is the owner of large tracts of timber, and it also holds the right to remove the timber from a large acreage all located in Lewis and Skamania counties. It has preferential rights to obtain additional large acreage, all estimated to contain approximately seven hundred million feet of merchantable timber.

United States Plywood Corporation is a New York corporation, having its principal place of business in the state of Washington at Seattle. This concern is engaged in the manufacture and production of plywood and other lumber products at Seattle, and in its operation needs and consumes a large quantity of logs, known to the trade as 'peelers.' This corporation owns a thirty-one per cent stock interest in Kosmos Timber Company.

Soundview Pulp Company is a Washington corporation, having its principal place of business at Everett, Washington, and is engaged in the manufacture of paper pulp. In its operations it needs and uses large quantities of hemlock and white fir logs. It owns a ten per cent stock interest in Kosmos Timber Company.

It is alleged in paragraph 15: 'That R. S. Fox, Seattle Export Lumber Company and/or the Estate of Johanne Fox, Deceased, and R. S. Fox and Margaret Fox, his wife, now own or control 59% of the stock of Kosmos Timber Company, or did own or control 59% of the stock of Kosmos Timber Company on February 21, 1946.'

Paragraph 16 alleges: 'That R. S. Fox is president of Kosmos Timber Company and that said R. S. Fox owns or exercises control over a majority interest in that company as hereinBefore stated, to-wit, 59% of its outstanding capital stock; that Kosmos Timber Company itself or through its lesses, R. S. Fox, is logging the timber upon and from the properties owned by it or under its control or from which it owns or has the right to remove standing timber, and that it has, owns or controls the equipment and facilities presently necessary to carry on and conduct the removal of timber therefrom, including logging railroads, truck roads and rights of way therefor; that plaintiff is advised and therefore alleges that certain properties and assets, machinery, equipment, facilities, etc., belonging to Kosmos Timber Company, or to which it is entitled, are either in the name of or in the possession of Seattle Export Lumber Company, R. S. Fox, the Estate of Johanne Fox, Deceased, or R. S. Fox and Margaret Fox, his wife.'

In Paragraph 18 it is alleged: 'That Seattle Export Lumber Company and Mountain Lumber Co. (Tacoma Export Lumber Co.), R. S. Fox, the Estate of Johanne Fox, Deceased, R. S. Fox and Margaret Fox, his wife, or some of them, are engaged in sawmilling, and that they, or some of them, in said sawmill operation in which they, or some of them, are interested or control, require and use large quantities of logs mainly of Douglas fir species known to the trade as sawmill type logs.'

It is alleged in paragraph 11: 'That the plaintiff is advised and therefore alleges that R. S. Fox, the Estate of Johanne Fox, Deceased, Kosmos Timber Company and the community of R. S. Fox and Margaret Fox, his wife, or some of them, are substantial stockholders of Seattle Export Lumber Company; that R. S. Fox is the president of Seattle Export Lumber Company, and that R. S. Fox has active and actual control of the business and dealing and affairs of said company.'

From this maze we emerge with the allegation found in paragraph 16, that R. S. Fox is president of Kosmos Timber Company, and that he owns or exercises control over fifty-nine per cent of the outstanding capital stock of that company.

It also appears that certain sawmill operations now being carried on by R. S. Fox or Seattle Export Lumber Company, which Fox controls, the estate of Johanne Fox, or R. S. Fox and Margaret Fox, his wife, require large quantities of Douglas fir logs, known as sawmill type logs, in sawmilling operations.

It further appears that United Plywood Corporation in its operations requires large quantities of logs known as 'peelers,' and that Soundview Pulp Company in its operations requires large quantities of hemlock and white fir logs.

It is alleged in paragraph 20: 'That United States Plywood Corporation and Soundview Pulp Company hold contracts requiring Kosmos Timber Company to give to them and each of them preferential rights to purchase logs produced by it; that R. S. Fox has by understandings or agreement arranged by and with the consent of himself and all the foregoing parties mentioned in this action, or some of them, to furnish to Seattle Export Lumber Company and Mountain Lumber Co. (Tacoma Export Lumber Co.) some or all the logs to which he claims to be entitled pursuant to contract dated as of December 24, 1941, by and between himself and Kosmos Timber Company.'

It may be stated here that none of the contracts, or copies thereof, referred to in the preceding paragraph was attached to or made a part of the complaint.

Paragraphs 23, 24 and 25 allege:

'23. That plaintiff owns and operates a large sawmill at Tacoma, Washington, the present cut of which consists primarily of Douglas fir species known to the trade as sawmill type logs.

'That the plaintiff also owns, operates and controls or has preferential rights in and to large timber areas in Pierce county, Washington, on which it conducts logging operations, the specie products of said operations being Douglas fir, cedar, hemlock, white fir and noble fir; and that from said specie products, as aforesaid, there is an insufficient quantity of Douglas fir sawmill type logs to meet the requirements of the plaintiff's sawmill operations for said type at Tacoma, Washington.'

'24. That the specie stand on timber lands hereinBefore referred to as owned or controlled by Kosmos Timber Company is principally of the following species: Douglas fir, cedar, white fir and hemlock, and that the Douglas fir stand produces both 'peeler' type and sawmill type logs; that all these types are recognized and defined in Standard Log Scaling & Grading Rules.'

'25. That plaintiff in its sawmill operations has a need for sawmill type Douglas fir logs in excess of that produced from its own timber areas and that readily obtainable by it on the open market; that the quality of the sawmill type logs produced from the properties hereinBefore described is

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