Hughes v. Heppner Lumber Co.

LATOURETTE, J. The present appeal involves title to approximately 3,300,000 feet of fir and pine timber situated on 1852 acres in Morrow county. Plaintiffs, the fee owners, sought to quiet title to the land in question. Defendant cross-complained claiming title to the timber in question. The trial court found for defendant and gave it — 13 — until December, 1955, in which to remove the timber from the premises. Plaintiffs appeal. On February 23, 1939, the Hugheses deeded to the Bridal Veil Lumber & Box Company, predecessor in interest of defendant Heppner Lumber Company, “all pine and merchantable fir timber” situated upon approximately 1160 acres of land herein involved. On February 25,1939, the Bridal Veil Lumber & Box Company conveyed to the Hugheses approximately 692 acres of the land in litigation. The deed contained the following reservation: “The grantor, however, reserves all the pine and merchantable fir timber on the above described premises together with the right to log the same at its convenience.” As a part of the transactions the Lumber Company agreed to and did pay one-third of the taxes thereafter levied on the property. As the timber was cut, as hereinafter explained, it ceased paying taxes. In 1940 the Heppner Lumber Company was incorporated and succeeded to the rights of the Bridal Veil Lumber & Box Company in the timber. The evidence discloses that the land involved was mountainous, with deep ravines. The timber in controversy is that largely found in the above areas with the exception of a small tract in a remote section of the property which was not listed on the tax roll as timber land and which was admittedly inaccessible. For a number of years thereafter logging was carried on by “gypo” loggers with horses and the entire area was logged with the exception of the remote part herein-before mentioned. As the timber was logged it was delivered to defendant’s sawmill to be cut up into lumber. Periodically, as logging was concluded, from 1939 to 1948, inclusive, in order to remove the timber from the tax rolls and relieve the company from paying taxes — 14 — on the same, its officers and agents executed and delivered affidavits to the county assessor in which it stated that it had cut and removed all the timber situated on the premises involved excepting on a remote and inaccessible portion of the property which had no timber listed on the assessment roll. At the conclusion of the logging operations in 1948, defendant pulled up stakes and, like the Arabs, folded its tents and silently stole away. Shortly thereafter plaintiffs fenced most of the lands and installed a gate which was kept padlocked. No claim on the part of defendant was made to any timber remaining on the property until in 1951 when the prices of lumber soared some 400 per cent over that which existed in 1939. It was then that plaintiffs instituted the present suit. Plaintiffs’ position is tersely stated in their brief as follows: “(1) The respondent has already cut and removed all the timber it ever owned; “(2) If there is any such timber left (which appellants deny) respondent forfeited its right thereto because a reasonable time for removal has expired, and “(3) If there is any such timber left (which appellants deny), respondent relinquished its right thereto.” The controlling feature of the case, in our opinion, is that stated in proposition No. 1 of appellants’ brief above set out. In other words, did defendant remove all the merchantable timber as contemplated by the parties in 1939, during the years 1939 to 1948, inclusive? The parties agree on the issues, at least in respect to this question. Defendant claims and plaintiffs dis — 15 — claim that the timber now contended for was merchantable timber in 1939. Defendant asserts therefore that they have a reasonable time to remove it. If the timber, however, was not merchantable at that time it follows that the “reasonable time for removal” doctrine would have no applicability. A grant of merchantable timber is a grant only of the merchantable timber on the land at the date of the contract. Rayburn et ux. v. Crawford et ux., 187 Or 386, 398, 211 P2d 483. What is merchantable timber, in the absence of agreement, is a question of fact. We quote from Dahl et al. v. Crain et ux., 193 Or 207, 225, 237 P2d 939, as follows: “It may he conceded that there is no definition of ‘merchantable timber’ which will fit all occasions and all localities. Although a term very frequently used in timber sales contracts, as it was used in the contract here, nevertheless, it is one having no definite and fixed meaning. What may he ‘merchantable timber’ at one time or place may not be deemed such at another time or place. In determining what is covered by the term at a particular time and in a particular locality many factors are considered. Size and quality are of prime importance. Location, accessibility, demand, and market conditions are regarded. We do not assume to enumerate all the elements involved in the term. * * *” Again, in Parsons v. Boggie, 139 Or 469, 471, 11 P2d 280, we said: “* * * The court must, as far as possible, construe the instrument from the words used as showing what the parties had in mind at the time of its execution. The respondent sold and the appellant bought with the understanding that the timber was to he removed. We must also take into consideration the circumstances surrounding the parties — 16 — at the time the sale was made; also their attitude toward the subject matter subsequent to the execution of the contract. * * *” (Italics ours.) One of the factors in determining the merchantability of timber, according to Glenn Parsons who was employed by defendant Lumber Company and had charge of its cruising and logging operations, is whether or not a timber tract is operable. He was called as a witness by defendant and testified that he had cruised the timber on the tract in question and that in cruising timber the cruiser’s objective is to determine, among other things, what is an operable tract. His testimony follows: “Q When you say operable, what do you mean by that? A Some areas due to certain conditions make a tract operable and some of them inoperable due to the volume, terraine [sic], and so on, accessibility, whether you could go in and log it and do it economically. i 6 * * sfc * * “Q Now even though you might have some good timber in a certain location, it might not be operable ? A That is right; it would depend upon accessibility along with it. ’ ’ Since operability depends upon volume, terrain and accessibility, we are satisfied that under the circumstances of this case defendant never did consider the tracts on which the present timber is located as operable. Bruce Hoffman was called as a witness by plaintiffs. He is a consulting forester with offices in Portland. He was employed for many years by the government forest service in Alaska, Oregon, Washington and northern California. Prom 1919 until 1928 his work primarily had to do with pine operations nity — 17 — of Klamath Falls, Medford and eastern Washington. He testified that his duties were “to make up and consider the lay-out of the areas in regard to pine sales that the Forest Service planned to make, and at the same time, to make a very thorough and complete study of the costs of logging operations as well as manufacturing operations in pine. We attempted to conduct quite a series of time studies and production, and keeping up that work in order to give us the opportunity to know what the mills were operating on in the areas.” Intermittently he was employed by private companies, one being the Edward Hines Lumber Company in Burns. He testified: “I cruised and appraised first their large tract, 40,000 acres, on the Rodaugh Mountain, and I attempted to figure out the most practical way of getting that stuff out of there, whether to take it out in logs, and attempt to put a small mill at Seneca, or to the Hines Mills near Burns, or manufacture on the ground in small mills or to put a mill in at Dayville.” Other employment included that with the Weyerhaeuser Timber Company, the Shevlin-Hixon Company at Bend, and others. He testified that he was familiar with the land in question, having traveled over the area twice. He further testified: “Q Now, did you make a sufficient examination of those lands to determine what logging operations had been conducted on the land and to determine the areas which had been logged over? A We went over the greater part of it. “Q And you did see it with that in view, see most of the area when you were over there? A Yes. Well, as it was lying there, it is characteristic of other similar lands in Eastern Oregon and in Southern Oregon logged over under the conditions of 1939. Operators went in and took the best out and — 18 — left the rest there. What was left is practically of no value under those conditions at that time. “Q In other words, you could state in your opinion that the logs which had been taken out of there —the logging which had taken place there, and during the logging operations which had taken place, all of the timber which had commercial value in 1939 had been removed, is that right? A I would say that it was removed.” Mr. Orville Smith, president, general manager and director of the defendant, testified as follows: “We took trees according to — at that time according to more or less the accessibility and the quality that could be obtained to get the timber into the mill at a profit. We did occasionally — we had to leave some that the cost would be a little too great to make a profit on it; after we got it in, the log costs would be too great.” The deeds in question were executed in 1939 at the tail end of the depression which swept the country. The price of timber was low and logging was conducted by horses. It was deemed impracticable and commercially not profitable to log in the deep ravines and mountain tops where timber was not readily accessible. Loggers hired by the defendant logged the entire area as was customarily done at that time, and, as various tracts of timber were logged, reports were made to the company and the affidavits of removal were executed and delivered to the assessor. The defendant does not dispute the making of the affidavits but attempts to evade their evidentiary value by claiming that they were misled by the reports of the loggers. It will be remembered that the timber had been cruised by defendant’s employees, including Glenn Parsons, whose testimony follows: “Q What sort of work do you do for them? A I look after the logging operation, cruising, line — 19 — running, timber affidavits, cutting and I check on the gypos to see that we are getting compliance with the contracts. “Q The logging — you supervise the logging, but you don’t actually do the logging? A That is correct; I see that we are getting compliance with the contract and log problems.” Defendant makes much of the trial court’s finding that the affidavits were based upon erroneous information furnished to defendant and are therefore not binding on defendant. It is urged that since the court saw and heard the witnesses we should not disturb its finding. In the present case the evidence is more or less documentary and based upon testimony of the officers and employees of defendant. This being so, we are in the same position as the trial court'with respect thereto. Indeed, the following finding is based upon the court’s misconception of the evidence: “* * * Representatives of the defendant had not examined the property themselves before making the affidavits. Sometime prior to 1949, representatives of the defendant examined the propérty and discovered that, in addition to those areas not logged at all, a large amount of marketable timber remained upon the property.” In this connection, it will be noted that the last affidavit filed by Allen L. Piper, forester of defendant company, was executed on February 28,1949, obviously after the time when a representative of the defendant examined the property. It is clear to us from a close scrutiny of the record that when defendant’s officers and employees signed the affidavits they knew what they were doing. The testimony of Earl Blake, a cattle rancher and owner of a small sawmill in the vicinity, pointedly sug — 20 — gests that the defendant had cut all the timber it thought merchantable and desired to cut. It follows: “Q Now, do you recall a conversation that you had with Mr. Orville Smith of the Heppner Lumber Company, concerning the Hughes’ land, which is involved in this controversy and which is indicated by the red and blue shaded areas on the map on the black board, which is Plaintiff’s Exhibit No. 10? A I do, yes. “Q Would you state when and where this conversation took place? A It was about a year ago last spring in Mr. Smith’s office. “Q That is in Heppner, Oregon? A Yes, in the Heppner Sawmill office. “Q Would you state what was said? A I was there for the purpose of arranging to take their lumber out for them, and I also asked him if he knew where we could get some timber, that we were short, and he said that he didn’t know. Then I asked if there wasn’t something on the Hughes’ tract and he said that there was none, that they had logged that off.” There is another reason why plaintiffs should prevail in this case. Since no time limit was specified in the deeds for the removal of the timber, defendant had a reasonable time for its removal. Rayburn et ux. v. Crawford, et ux., supra. Glenn Parsons, defendant’s logging expert, testified : "Q * * * How long would it take to log it off, leaving off the argumentative part? A Pour months. “Q And it could have been taken off in 1948 in 4 months, couldn’t it? A I think it could.” Mr. Smith, president of the company, testified: “Q Assuming that there is approximately 3,500,000 feet of merchantable pine and fir on the — 21 — property now and that it is scattered over approximately 2,000 acres of land, how long would it ordinarily take to log that if yon were trying to do it in a reasonably economical fashion. * * * A It would take about one season, a logging season, to log it. In that area it is about 6 months. They could log about 6 months out of the 12.” For over a period of years after defendant ceased logging operations no effort was made by it to remove the timber. In our opinion a reasonable time had elapsed for its removal. Reversed.