State v. Equitable Sur. Co.
| Decision Date | 12 April 1918 |
| Docket Number | No. 20774.,20774. |
| Citation | 167 N.W. 292,140 Minn. 48 |
| Parties | STATE v. EQUITABLE SURETY CO. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Ramsey County; Frederick N. Dickson, Judge.
Action by the State of Minnesota against the Equitable Surety Company. Judgment for plaintiff on the pleadings, and, from an order denying defendant's motion for leave to file an amended answer, defendant appeals. Order affirmed.
The state sold timber under a statute which provides for payment on a scale made by the surveyor general, but providing that the state auditor may demand a rescale and that the rescale shall be conclusive as to the amount of timber cut.
Parties may, without authority of any statute, stipulate in a contract of sale, that the quantity of the property sold shall be determined by the estimate of a designated person or official.
Notice of the time or place of making the estimate is not required by any rule of law unless contracted for, and a requirement of notice will not be implied. The making of such an estimate is not an arbitration, and the rules as to arbitration do not apply.
The rescale is subject to impeachment for fraud or mistake, but there is no allegation of either in this case.
The statute is constitutional. The state may, by statute, fix the terms on which it will sell its timber. When those terms are accepted by a purchaser, their enforcement is not a taking of property without due process of law. Nor does the statute fix rules of evidence. Kerr, Fowler, Schmitt & Furber, of Minneapolis, for appellant.
Lyndon A. Smith, Atty. Gen., and James E. Markham, Asst. Atty. Gen., for the State.
[1] 1. Chapter 204, Laws 1905 (G. S. 1913, §§ 5258-5302) provides for the sale of timber on state lands. It provides, that in case of sale, a permit shall be issued, executed by the state auditor and signed by the purchaser, authorizing the purchaser to enter and cut and remove the timber (section 5276), that all timber cut shall be scaled by the surveyor general of logs and lumber (section 5283), and that payment shall be made on his scale (section 5294). It is provided, however, that the state auditor may question the correctness of any scale made by the surveyor general and cause a rescale to be made.
The complaint alleged that a sale of the timber on a certain tract of state land was made to R. Sperling, at certain prices per thousand; that a permit was executed and signed, making express reference to said statutory provisions; that Sperling gave a bond with the AEtna Accident & Liability Company as surety for the faithful performance of all conditions of said permit; that thereafter Sperling sold his rights under said permit to J. A. McDevitt, and McDevitt gave a bond with defendant as surety, conditioned that he should perform all the conditions of said permit; that McDevitt cut and removed the timber and the surveyor general made and reported his scale of timber cut and removed; that subsequently, the state auditor received information that this scale was grossly inaccurate and served notice on the surveyor general demanding a rescale; that thereupon the surveyor general designated a deputy and the auditor appointed an estimator and these two agreed upon a rescale which showed the timber removed to be approximately three times as much as shown by the surveyor general's scale, and the complaint demanded judgment for the amount as shown by the rescale.
The original answer, after a portion of it had been stricken out, simply alleged that ‘the true scale was as first returned and made by the surveyor general.’ The court ordered judgment for plaintiff on the pleadings.
Thereafter defendant moved for leave to file an amended answer. The proposed answer in substance alleged the correctness of the original scale, that the rescale was a stump and top scale and was ‘incorrect and unreliable,’ and that it was ‘impossible to determine with any reasonable or approximate degree of certainty’ the number of trees fit for lumber or poles or posts that were cut from any piece of land by a stump and top scale, and that the scalers were, ‘because of existing conditions and the fact that the timber and its products had been removed * * * unable, and it was in fact impossible for them to correctly, fairly and justly scale, count, estimate, inspect and value the timber that had been cut and removed.’ The trial court denied the motion on the ground that the proposed answer did not state a defense. Defendant appeals. The trial court held the rescale conclusive upon the parties. Defendant claims the right to go back of the rescale. This is the question in the case.
2. We agree with the trial court. The provisions of the statute authorizing the rescale, and making it final as to the amount of timber cut must be read into and considered as part of the contract. See State v. Brooks-Scanlon Lumber Co., 122 Minn. 400, 142 N. W. 717. The real question in the case is, whether the stipulation that the rescale shall be conclusive on the parties is valid. Without authority of any statute, parties may, if they see fit, stipulate in a contract of sale that the quantity of the property sold shall be determined by the estimate of a designated person or official. No public policy forbids this. Leighton v. Grant, 20 Minn. 345 (Gil. 298); Johnson v. Howard, 20 Minn. 370 (Gil. 322); Boyle v. Musser-Sauntry Co., 77 Minn. 206, 79 N. W. 659. Contracts of this kind are common in business transactions. A familiar instance is the ordinary form of building contract, by the...
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