Court Opinion

ID: 9564374
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:59:18.747421+00
Date Added: 2024-06-11T09:18:22.807066
License: Public Domain

Ott, J.
During the month of June, 1954, Joe Daman, doing business as Daman Logging Company, entered into *748two separate timber sale contracts with the state of Washington. The contracts gave Daman the right to remove certain timber and to pay the state on a stumpage basis as logged. On one of the tracts (hereinafter designated as tract “A”), Daman was required to make an advance stump-age deposit to the state in the sum of approximately sixteen thousand dollars. On the other tract (hereinafter designated as tract “B”), Daman was required to make an advance stumpage payment of approximately $2,230.
On or about April 5, 1955, Daman commenced logging on tract “A” and entered into an oral agreement to deliver the logs to the Walton Lumber Company (hereinafter referred to as Walton). In accordance with this agreement, Walton advanced to Daman the sixteen thousand dollars which he had previously remitted to the state as an advance stump-age payment. July 29, 1955, Daman entered into a written contract for the sale of the logs to Walton, as follows:
“Log Purchase Agreement
“Under this............day of July 1955, Joe Daman of Forks, Washington, hereinafter referred to as ‘Owner,’ agrees to sell to Walton Lumber Company, a corporation, hereinafter referred to as ‘Buyer’, certain timber in log form from property hereinafter described, and upon the full terms and conditions herein set out.
“Recitals:
“A. The Owner has purchased timber from the State of Washington on the following described land situated about thirty (30) miles southeast of Forks, Washington: [Legal description.]
“B. The Owner has also purchased from the State of Washington timber on the following described land situated about one-half mile southwest of the townsite of Forks, Washington: [Legal description.]
“C. The Buyer does now agree to purchase and the Owner agrees to sell all of the logs developed in the logging operations from said lands.
“D. It is anticipated that approximately seven (7) million feet of logs will be taken from the first described lands and approximately three (3) million feet of logs will be produced from the second described lands, making a total of about ten (10) million feet, mostly hemlock and white fir in even proportions, and the balance of cedar and spruce *749in about equal proportions. The grade and species of logs cannot now be exactly and directly determined. Neither can the delivery point of these logs be ultimately determined upon at the present time and will have to be determined as directed by the Buyer.
“Now, Therefore, It Is Hereby Mutually Agreed:
“I. That the Buyer will pay for these logs based upon a ■delivery by the Owner at a dumping and booming ground in Puget Sound, Washington, as determined by the Buyer* [Details of payment.] . . .
“IV. It is contemplated that the Buyer will advance to the Owner all sums necessary to promptly pay for all stumpage due from the Owner on said lands and will likewise advance on the purchase price of these logs from time to time such amounts as is reasonably necessary to carry out the logging operations; Provided only, that said advances shall in no event exceed the purchase price of said logs as herein agreed upon.
“V. The Buyer shall at all times have the right to examine the books of the Owner to the extent reasonably necessary to determine the fact that all logs purchased by the Buyer are free from any liens for stumpage, labor, or any other charges that might arise against the Buyer, and should at any time the said charges exceed the actual purchase price of these logs, then the Buyer at its option may take possession of the said timber tracts and log the same paying to the State the sum due for stumpage for the timber removed.
“VI. The Owner has been delivering logs from the lands herein described since approximately May 10, 1955, and has delivered to date approximately two and one-half million feet. Prior to the first delivery of logs the Buyer advanced to the Owner the sum of $16,009.60 on or about the 5th day of April, 1955. Since the delivery of logs has started the Buyer has advanced on the purchase price of the logs $114,338.14.
“VII. It is now mutually agreed that the full purchase price of the logs already delivered together with the logs hereafter to be delivered shall all be determined under the price formula as set forth herein. The advance of $16,009.60 made on the 5th day of April, 1955, shall be prorated over the full purchase price of all of the logs now bought under this contract by allotting $2.00 per M feet to all logs delivered including those heretofore delivered as well as those *750hereafter delivered under this contract, until the full .$16,009.60 prepayment shall have been fully liquidated.
“Dated this 29th day of July, 1955.”
March 27, 1956, Daman assigned his. state timber rights on tract “B” to Spoelstra Brothers Logging Company. Spoelstra Brothers logged the tract and disposed of the timber to another concern. When Daman completed logging the timber on tract “A”, he demanded of Walton payment for the logs delivered. Walton refused payment, contending that it had been damaged by Daman’s refusal to deliver the logs from tract “B”, and demanded of Daman the amount of its damage in excess of the balance due for the logs delivered.
Daman commenced this action against Walton and prayed for judgment in the amount due him of $18,905.68.
Walton answered the complaint, admitting that the amount claimed was due, but alleged, as an affirmative defense and cross-complaint, that the plaintiff had breached the contract by refusing to deliver the logs, from tract “B”, and that the cross-complainant had been damaged in the sum of thirty-six thousand dollars, less the sum due the plaintiff on his cause of action.
^' The plaintiff’s answer to the affirmative defense and cross-complaint denied there had been a breach of the contract.
The trial to the court resulted in a judgment in favor of Daman and a dismissal of Walton’s cross-complaint. In addition, the court entered a finding of fact as. to the amount of damage suffered by Walton, in the event the court should be reversed on appeal, as follows:
“That, if the assignment from plaintiff to said Spoelstra Brothers Logging Company and the subsequent failure of plaintiff to deliver the Mill Creek logs to defendant constituted a breach of the contract between the plaintiff and defendant, the Court finds that the defendant would have been damaged in the sum of $28,974.50.” Finding of Fact No. 9.
The defendant appeals, assigning error to the dismissal of the cross-complaint. Plaintiff cross-appeals, assigning *751error to the above finding of fact. We will first discuss appellant Walton’s assignments of error.
Appellant assigns as error the court’s conclusions that the contract required the respondent to deliver to appellant only such logs as were cut by him, that respondent’s assignment of the logging rights to the timber on tract “B” was not a breach of the contract, and that appellant’s cross-complaint should be dismissed.
The trial court based its conclusion that the respondent was required, by the contract, to deliver to appellant only such logs as were cut by respondent upon finding of fact No. 5, which is as follows:
“That throughout said written agreement, particularly in Paragraphs I, 1(c), II, III, IV, V and VI, numerous references are made to the ‘Owner’ in connection with matters pertaining to delivery of logs, payment for same, alternate methods of transportation, performance of the state timber contract under which the timber had been purchased by the plaintiff' [respondent], contract advances, examination of books, and prior delivery of logs. That all of said references to the ‘Owner’ were references to the plaintiff personally.”
We do not disagree with the finding that the word “owner” in the cited paragraphs of the contract referred to respondent personally. We do disagree with the conclusion of the court that it was the intention of the parties that only those logs which respondent elected to deliver to appellant were to be covered by the contract, for the following reasons:
(1) The contract defines with certainty the area (including tract “B”) from which the timber was to be produced, and provides that “Joe Daman . . . agrees to sell to Walton Lumber Company . . . certain timber in log form from property hereinafter described, and upon the full terms and conditions herein set out.”
(2) At the time the contract was executed, respondent owned the timber rights to both tracts “A” and “B”. The sixteen thousand dollars was to be repaid at the rate of two dollars per thousand feet of logs cut (§7). There were not enough logs in tract “A” to repay the advance at the two-*752dollar rate (recital D); hence, it must have been within the contemplation of the parties, at the time the contract was executed, that it would be necessary that logs be cut on tract “B” in order to repay the advance.
(3) The contract provides that the buyer could take over and log “the said timber tracts” (Italics ours.) under certain conditions enumerated in the contract (§5).
(4) The contract provides, a fixed purchase price for the logs at such dumps as appellant should select. The construction which the trial court placed upon the contract would permit the respondent to avoid his obligation under the contract by selling the timber rights to a third party, and thus deprive the appellant of the benefit of its bargain.
In Long-Bell Lbr. Co. v. National Bank of Commerce, 35 Wn. (2d) 522, 214 P. (2d) 183, we quoted with approval from Carnation Lbr. & Shingle Co. v. Tolt Land Co., 103 Wash. 633, 175 Pac. 331, as follows:
“ ‘The first and best resort in the construction of contracts is to put oneself in the place of the parties at the time the contract was executed—to look at it in prospect rather than retrospect—for, when money disputes have arisen, the perspective is apt to be clouded by the unexpected chance of gain or self-interest.’ ”
Applying this rule to the instant case, we conclude that there would have been no reason for the contracting parties to put a fixed price on the logs if respondent could avoid the effect of the contract at any time by selling the timber rights to a third party. Assuming, arguendo, that the contract is. subject to two interpretations, it will be construed to preserve the rights of both parties, rather than to destroy the rights of either. Asia Inv. Co. v. Levin, 118 Wash. 620, 204 Pac. 808, 32 A. L. R. 578.
We conclude that, by the contract, respondent agreed to sell to appellant all of the timber logged on both tracts “A” and “B”, whether he logged the tracts himself or caused them to be logged by others, and that when, on March 27, 1956, respondent assigned the timber rights on tract “B” to Spoelstra Brothers Logging Company, which admittedly did not deliver the logs to appellant, it consti*753tuted a breach of the contract, for which respondent was answerable in damages
Because of the conflicting evidence, this court is unable to determine from the record the amount of damages to which appellant may be entitled. Both appellant and respondent agree, in their briefs, that the court’s computation was incorrect.
The judgment is reversed and the cause remanded with instructions to reinstate the cross-complaint and grant appellant a new trial limited to the issue of damages only. Appellant will recover costs.
Mallery, Hill, and Hunter, JJ., concur.