Wright Lumber Co. v. Herron

• Decision Date: 22 October 1952
• Docket Number: No. 4492.,4492.
• Citation: 199 F.2d 446
• Parties: WRIGHT LUMBER CO. et al. v. HERRON et al.
• Court: U.S. Court of Appeals — Tenth Circuit

199 F.2d 446 (1952)

WRIGHT LUMBER CO. et al. v. HERRON et al.

No. 4492.

United States Court of Appeals Tenth Circuit.

October 22, 1952.

Hal Welch, Hugo, Okl. (George T. Arnett, Idabel, Okl., and Shaver, Stewart & Jones, Texarkana, Ark., on the brief), for appellant.

Tom Finney, Tulsa, Okl., and Robert L. Hert, Stillwater, Okl., for appellees.

Before HUXMAN, MURRAH and PICKETT, Circuit Judges.

HUXMAN, Circuit Judge.

This is an appeal from a judgment vacating an arbitrators' award and granting a permanent injunction enjoining appellants from going upon appellees' land and removing timber therefrom.¹

The essential facts in the case are these. The Herrons owned approximately 20,000 acres of timber land in McCurtain County, Oklahoma. So far as material, a written contract was executed by the parties March 16, 1948, in which the Herrons agreed to sell timber from designated portions of the tract and Wright agreed to purchase the same. In addition Wright also agreed to cut the timber in the manner as provided in the contract. The contract gave the Herrons the right of cancellation after the first year upon payment of $2,500 as liquidated damages. It also contained an arbitration provision providing that in the event of disagreements or differences between the parties in relation to the agreement or arising thereunder, whether as to construction or operation thereof or the respective rights and liabilities thereunder, such disagreements should be referred to three arbitrators to be selected as provided therein and that an award in writing signed by any two of the three arbitrators should be final and binding upon the parties. The parties operated under this agreement with written modifications thereof on June 16, 1948, November 6, 1948, and July 28, 1949. All these supplemental agreements provided that the original agreement should remain unchanged except as provided in the supplements thereto. Since the question presented for determination arose under the supplement of July 28, 1949, its provisions relating to the original agreement are set out verbatim in Footnote 2. None of these supplemental agreements contained any provision dealing with the rights of cancellation.

The supplemental agreement of July 28, 1949, gave Wright the right to cut timber from 3,000 acres not included in the original agreement and provided that Wright would "be permitted to start a second cycle of cutting on January 1, 1952, on lands which were cut over under said above Timber Sale Agreement in 1948 and later." On October 26, 1951, the Herrons served notice of cancellation and to terminate the contract. The notice referred to the original contract and to the modifications thereof and notified Wright that it was cancelled because of his breach in refusing to cut the hardwood timber as required therein and because of its failure to otherwise comply with the terms and conditions of the contract. The notice also stated that "In case you do not agree that you have breached said contract such disagreement or difference is hereby referred to three arbitrators under the provisions" of the contract "entered into on the 16th day of March, 1948." It notified Wright of Herrons' selection of an arbitrator and requested it make selection of its representative "in order that said arbitrators so appointed may proceed to act under the provisions of said Article 12 that such dispute and disagreement as may exist between the parties as to your breach of said contract, aforesaid, may be determined and a decision made." It notified Wright further that in the event the decision should be in Wright's favor, then in that event and in the alternative "you are notified that said contract is terminated under the provisions of Article 11 of the agreement entered into on the 16th day of March, 1948."

Upon receipt of this notice, Wright served a written notice of appointment of an arbitrator. The notice denied that Wright had violated its contract and charged Herrons with violation of their contractual obligations. It stated that "you have violated the terms and conditions of your written contract with them and with it, the Wright Lumber Company.

"And that you, Herron Industries, have falsely and fraudgently caused your agents, servants and employees to over scale all of the sawlogs and trees out for manufacture by the Wright Lumber Company so that the Wright Lumber Company have overpaid you and that the Wright Lumber Company will submit to the arbitrators for their decisions the amount of the over charges that they have paid you for said logs and trees scaled by your and will submit to the arbitrators all matters of differences that have arisen between you and the Wright Lumber Company."

The two arbitrators chosen by the parties selected a third arbitrator and, after hearings, they made findings of an award. The board made a finding that three propositions had been submitted; first, whether Wright had breached its contract, second whether Herrons had breached their contract and, third, whether Herrons had the right to cancel the contract under Article 11 of the agreement of March 16, 1948. Sikes, the arbitrator selected by Wright, and Bounds, the third arbitrator, agreed that Wright had not breached its contract and that the Herrons had. Hendrix, the arbitrator selected by Herrons, disagreed. As to whether there was a right of cancellation, Sikes and Bounds were of the opinion that the agreement of July 28, 1949, was a new agreement between the parties insofar as the...