Olmstead v. Downie

Askren, J. — The parties to this action entered into the following- contract: “Memorandum oe Agreement Between B. E. Downie ■ ■ Lumber and Pole Company “Whereas, B. E. Downie & Colnpany claim ownership of approximately one. million feet of logs, on what *130 is known as the J orgenson tract some two and a quarter miles from Lake Sammamish, King county, Washington, further described as follows: N. W. of S. W. Section twenty-seven, township twenty-eight, North of Kange six, and whereas, Frank Olmstead is interested in the cutting and disposal of said timber, and both of these parties above mentioned being in agreement in the premises evidence their agreement in the following memorandum: “ (1:) Frank Olmstead, his agents or assigns will cut and remove and deliver in Lake Sammamish, King county, all merchantable timber on the above named and described tract within one year from date hereof. “ (2.) Said Frank Olmstead, his agents or assigns, or employees will dump all said merchantable logs into a circle boom. “(3.) Said Downie & Company are to pay Frank Olmstead at 406 Thompson Building, Seattle, for each boom after delivery of same to the Campbell Lumber Company at the rate of $9.90 per thousand feet. “(4.) The matter which shall determine merchantability is what the Campbell Lumber Company will accept based on the scale of a licensed scaler. “Witness our hands in mutual agreement and understanding hereto this 5th day of October, 1923. “R. E. Downie Lumber & Pole Company “By Downie. “Frank Olmstead.” Thereafter a large amount of logs were cut by plaintiff, accepted by the Campbell Lumber Company, and paid for by the defendant. In July, 1924, a fire burned some of the timber on the premises in question, and the logs cut therefrom, when placed in booms, were rejected by the Campbell Lumber Company. Defendant thereupon refused to pay for the logs, and this suit was commenced to recover. The complaint alleged due performance of the conditions of the contract, but that defendant refused to receive or accept said logs, and refused payment. *131 The answer denied dne performance, admitted a refusal to accept, receive, or pay for such logs, and alleged affirmatively that many of the logs were unmerchantable, and that neither the Campbell Lumber Company, nor the buyers of merchantable logs, would accept them as merchantable. The reply denied any information as to what the Campbell Lumber Company or others would accept. Upon the trial of the action, the evidence showed that the Campbell Lumber Company refused to accept the logs in question, because they were not merchantable, and the court dismissed the action. Plaintiff has appealed, and assigns two errors as grounds for reversal. It is first contended that the contract was ambiguous, and required parol evidence to establish the meaning of the word “merchantability,” as applied to the logs in question. But it seems to us that the parties have themselves spoken very clearly in this contract, that the “merchantability” of the logs in question shall be “what the Campbell Lumber Company will accept.” The parties have made the lumber company the arbiter as to the merchantability of the logs, and in the absence of fraud or arbitrary or capricious action upon their part, the acceptance by them is a condition precedent to a recovery. Hughes v. Bravinder, 9 Wash. 595, 38 Pac. 530; Schmidt v. North Yakima, 12 Wash. 121, 40 Pac. 790; Lindblom v. Mayar, 81 Wash. 350,142 Pac. 695. It is also contended, that there was evidence that the logs had been accepted by the respondent. The appellant did testify to an acceptance by the respondent, but the respondent denied it, the appellant’s pleadings denied it, and the court found that there had been none. At the close of the whole case, appellant made an offer to prove by a witness that the logs were merchantable, and that, in the community where the logging was *132 done, logs burned more than tbe ones in question were accepted and sold on tbe market. Tbe reason stated for tbe offer was to show that the refusal to accept was arbitrary, and not based on reason or fact. An objection was sustained. It is alleged that this was error. But we think tbe court’s ruling correct. There was no issue made by tbe pleadings that the refusal to accept tbe logs was arbitrary or capricious. There was no request for permission to amend for tbe purpose of making it an issue, nor was there any issue justifying evidence of a custom in tbe community regarding merchantable logs. No motion for a new trial was made. But, if it be conceded that tbe testimony should have been received, tbe offer to prove by a single witness that tbe logs were, in bis opinion, merchantable, would not be sufficient, even if believed by tbe court, to show that tbe refusal of tbe Campbell Lumber Company was arbitrary. At best it would show only a difference of opinion. We find no error in tbe record, and tbe judgment is affirmed. Tolman, C. J., Holcomb, Bridges, and Fullerton, JJ., concur.