Conn v. Rice

PARDEE, Circuit' Judge (after stating the facts as above). Under the decision of this court (Lewis v. Dillingham, 167 Fed. 779, 93 C. C. A. 267) Lewis, at the institution of the proceedings against him, was the owner of the land in contest. Lewis' deed to Coku, duly recorded, conveyed the north one-half, so that at the time the trespass was committed, and the timber cut and removed, by the receivers of the Houston Oil Company of Texas and the receivers of the Kirby Lumber Company acting in conjunction, Lewis and Conn were the parties damaged. [tj The subsequent assignment by Lewis to Conn of his timber rights, including his cause of action for damages for the trespass already commuted, gave to Conn the right to sue for and recover for all the damages resulting from the taking of the timber from the whole tract; and this right, not specifically denied in the pleadings, is reinforced by the undisputed evidence that the deed for the north one-half of the land and the assignment of timber rights, though absolute in terms, were mere securities for the repayment of moneys advanced by Conn. The decision appealed from ignored this right of Conn, and therefore this appeal must be maintained, as none of the defenses presented are sufficient. [2, 3] That the receivers, in cutting and removing the timber pen-dente lite, acted under the advice of eminent counsel, and as 'they may have supposed within their legal lights, may mitigate the character of the trespass, so tar as good faith is to be considered; and this may relieve them from exemplary damages, still the fact remains that without right and pending an appeal wherein the order of the court — -if not the bond — operated a supersedeas, they invaded the possession of Lewis, and over his protest cut and removed and converted to their own use 1,198,500 feet of timber belonging to Lewis and Conn, and — 192 — they should fully compensate for and restore the same, or its full value, and not be permitted in a court of equity to escape with any profit resulting from their wrongful trespass and conversion. [4] There is much evidence in the record of “stumpage” value and market value of like timber at the time of the trespass, and while this may be admissible and useful in determining the value when an owner is compelled or is willing to sell, it is not at all conclusive as to the amount to be recovered when property is wrongfully taken over the will and protest of the owner, who has a right to -sell or to hold according to his own judgment and necessities. In cases of conversion of personal property of fluctuating value, a rule of damages frequently applied is that the recovery may be at the highest value the property may have had at any time between the conversion and settlement day (38 Cyc. 2096, and cases cited), for we take it that where an owner is not bound to sell he may avail himself of the highest market. [5] In this case, however, we are somewhat relieved; for in the case we find a contract between the Houston Oil Company of Texas and the Kirby Lumber Company, whose receivers committed the trespass, and who benefited by the same, which stipulates the price to be paid as timber was cut on the lands supposed to belong to the Houston Oil Company of Texas, and therein $5 per 1,000 feet is fixed as the price to be paid for over three-fourths of the timber therein contracted for, and so far as we can find from the record that is the price at which the trespassers in this case and the companies they represented settled for the timber taken from the lands of Lends and Conn, and under all the circumstances we think that is the price they ought to account for in this case. At less than that they would make a profit out of the trespass. Conn is the only appellant now before this court, but in order to grant him the relief to which we think he is entitled, and yet do justice, it is necessary to pass upon the claims of the interveners and cross-complainants, appellees, whose rights are involved. [6] George W. Cavin intervened in a cross-bill, in which he claimed he was the owner of all the pine timber on the Lewis tract, and he exhibited a contract in the form of a warranty deed executed by Lewis October 2, 1906, and thereafter duly recorded, which purports, for a consideration of $200 in cash and the payment of $2.25 per 1,000 feet as scaled thereafter when cut and removed, to convey to Cavin all the merchantable pine timber then standing on the Lewis tract, and ends with this provision: “It is expressly understood that the said George "W. Cavin agrees, by acceptance hereof, to cut and remove said timber above conveyed from the above-described land, within a period of 10 years from date hereof, failing so to do, title -thereto shall revert to and vest in grantor herein.” Cavin paid the $200, but thereafter cut and removed no timber from the Lewis tract, nor took any steps to assert any right thereto until after Conn filed his intervention in October, 1909. The contract as shown by the deed is admitted; but the contention below and here is that it was, and is, only a license to Cavin to enter and cut and remove th'e timber within the limited period, and until the timber should be cut and removed, and paid for, it belonged to Lewis, and it is pointed — 193 — out that Cavin was not obligated to take and pay for the timber at any time specifically or otherwise, and that until cut and paid for the timber belonged to Rewis and was solely at his risk, and that this was Gavin's construction of the contract, as he never removed any timber, has not shown that he ever prepared to or contemplated any removal, stood by and allowed the removal by other parties without protest, and, without aiding Lewis to defend his title, now comes in to reap where he has not sown. We have been referred to cases in Texas construing such contracts, in which it has been held they are contracts affecting the realty and must be in writing, and some other cases where a sale was executed by payment of the price, in which it was held that the contract conveyed an interest in the land. We may accepl the rulings in these cases, but they do not control in the instant case. The agreement between Lewis and Cavin is an executory contract of sale of standing timber, on which there was a price fixed and a small advance paid, but delivery was postponed; and, pending the time given to Cavin to remove the timber agreed to be sold, the same has been, and without the fault of the owner, wrongfully carried away and converted, and the question here is what are Gavin’s damages recoverable in this suit. He is entitled to recover the $200 paid to Lewis in advance, with legal interest thereon from the date of payment. If he had ever paid Lewis for the timber, and been diligent in the protection of his rights, he might be entitled to the full value of the standing timber at the time it was cut and removed; but he did not pay Lewis, nor did he defend. The decree below allows him the $200 advance payment, and further allows him 75 cents per 1,000, the difference between the $2.25 agreed to be paid by Lewis and $3, the value the court fixed for the standing; timber. It may be that Cavin had a shadowy inchoate equity to be protected by the court, but we have difficulty in locating it. He had no claim against Lewis, even for the advance, for Lewis neither sold nor removed the timber; and it is by no means clear that he had any actionable claim against the receivers, for he was not the owner nor in possession of the timber. The amount allowed Cavin by the decree below is liberal, as we view the facts in the case; but as he has not appealed, and we cannot deny that he has some equity in his claim, we will affirm the decree in his favor. I ^ j Appellee Hamman claims relief in this case by reason of a written assignment as follows: “Know all men by these presents, that I, George W. Lewis, of the aforesaid state and county, for and in consideration of the sum of one dollar (81.00) to me in hand paid by John Hamman, the receipt whereof is hereby fully acknowledged, and for the additional consideration of services heretofore rendered by him to me in cause No. 1871, entitled G. W. Lewis, Appellant. v. (diaries Dillingham, Receiver of Houston Oil Company of Texas, Appellee, in the IT. S. Circuit Court of Appeals, Fifth Circuit, at New Orleans. hare sold, assigned, transferred, and set over, and by these presents do sell, assign, transfer, and set over, unto said John Hamman, of Houston, Harris county, Texas, a full one-lialf (%) of any and all sums of money whatsoever to me inuring or accruing under and by virtue of a certain conveyance by me made to George W. Cavin, under date of October 2, 1906, ánd of record in the records of Newton county, Texas, to which said conveyance and the aforesaid record reference is hereby made. It is the intention hereby to set over to — 194 — the said John Hamman a full one-half (%) of all moneys inuring or accruing to me under and by virtue of the terms of said instrument, and to vest in him an equal right with myself therein, as well as in all rights whatsoever vested in me thereby, he, the 'said Hamman, being hereby subrogated to the said extent in and to my place and stead under said instrument, he being hereby authorized and empowered to collect from said Oavin one-half (%) of certain moneys as may accrue to me under said conveyance. To have and to hold the same unto the said John Hamman, his heirs and assigns, forever, free of all claims and demands whatsoever of myself, my heirs and assigns. “In testimony whereof, witness my hand, this transfer being executed in duplicate, this March 20, 1909. [Signed] G. W. Lewis.” This document seems to be an assignment in consideration of legal services theretofore rendered on the former appeal in this case of one-half interest in a claim Lewis was supposed to have against Cavin growing out of the timber contract between Cavin and Lewis. The assignment was made at a time when Cavin owed Lewis nothing, for-he had not removed nor cut any timber under the contract, and after the receivers had already cut and removed all the timber from the Lewis tract, and there was no possibility that the contract could be further executed, so as to give Lewis any claim enforceable against Cavin. In this present suit neither Lewis nor his assigns recover anything from Cavin by reason of the contract. On the contrary, in the decree below and in this court, Cavin practically recovers from Lewis on the nebular theory that if he had paid Lewis for the timber he would have made a profit of 75 cents per 1,000 feet out of the trespass of the receivers. Hamman has not proved in this case the extent or value of the services rendered Lewis on the former appeal in this court, and Lewis may be indebted to him for such services, and the assignment relied on furnishes no guide to adjudge any amount he may be entitled to recover in this case. In the brief filed by appellee Hamman in this case, and signed by him as associate counsel, it is alleged that George W. Lewis was a poor, old, uneducated man, and it was not only proper, but commendable, for the court in the exercise of its equity powers to award this unprotected old man what the evidence established was his rights. This is advanced as a reason why Lewis’ assignment to Conn was properly disregarded, and Conn’s claim cut down to the actual advances of cash and property made by him, and we think it is equally good as applied to Hamman’s assignment, obtained from the same “poor, old, uneducated man.” As the proof furnishes us no basis for determining the real amount due Hamman, we shall sufficiently recognize his demand by allowinghim in the decree to be rendered such amount for his professional services in the former litigation as the parties may agree, subject to the arbitrament and approval of the court below. George W. Lewis, the central figure in this litigation, without being made a party to the same, and after giving his evidence, of his own motion and apparently without objection, appeared by counsel and filed an entitled answer in the case as follows: “Now comes G. W. Lewis, by bis attorney herein, and makes and files this his answer to the pleadings of the defendants herein. — 195 — “I. Tlio said G. W. Lewis refers to and adopts as Ms own pleadings the pleadings of the plaintiff herein, It. 0. Conn. “11. The, said Lewis admits all allegations in the pleadings of the plaintiff herein, and says the matters and things therein alleged are true. “ill. The said Lewis prays that judgment be rendered herein for the said plaintiff as prayed for by him, and that the said Ilamman and Gavin be adjudged to recover nothing. “John B. Warren, Attorney for G. W. Lewis.” From which it appears that he informally joins intervener Conn as co-complainant. [8] Under his evidence and that of intervener Conn, it appears clearly established that under titles formally conveying' to Conn land and all of Lewis’ right of action for and interest in and to the timber that had been carried away from his lands, yet in fact the same-were in the nature of collateral security for advances made and to be made, with the understanding that after the collection of the timber claims Conn should account to Lewis as trustee. The court below took this view of the case in the decree, and to a certain extent protected Lewis in the matter. In the decree which we shall render in the case we think that Lewis’ rights will be fully protected without attempting to precisely adjust or limit them. The decree of the court below is reversed, and this cause is remanded, with instructions to enter the following decree: It appearing to the court that the receiver of the Houston Oil Company of Texas and the receivers of the Kirby Lumber Company, acting together, during the months of October, -November, and December, 1908, and January, 1909, cut and removed from the 160 acres of land of the W. C. Armstrong survey, in Newton county, Texas, the property of George W. Lewis, 1,198,500 feet of timber without right, and should account for the same, and the court finding that the said Houston Oil Company of Texas and the said Kirby Lumber Company and the receivers thereof, which have since been discharged by the court — jurisdiction, however, being retained over the same and the,said companies and the properties thereof until the disposition of all pending interventions, of which this is one — are liable for the value of said timber so cut and removed, which the court finds and declares to be the sum of $5 per 1,000 feet, amounting to the sum of $5,992.50, it is accordingly ordered, adjudged, and decreed that the defendants, the Houston Oil Company of Texas and the Kirby Lumber Company, pay into the registry of this court said sum of $5,992.50 in full settlement and satisfaction of the claims of all the parties hereto to said timber so cut and removed, which sum shall be distributed among the parties hereinafter named, but this decree as against said companies shall in no wise prejudice the rights of either company against the other; and it further appearing to the court that George W. Rewis did on the 2d day of October, 1906, convey to the defendant George W. Caviu the right for a period oí ten years to cut and remove the said timber from the lands aforesaid in consideration of the sum of $200 advanced and the payment thereafter of $2.25 per 1,000 feet of timber as same should be removed and scaled, and it further appearing that the intervener R. C. Conn had notice of the conveyance of such — 196 — timber rights to the said George W. Cavin, it is ordered and decreed that out of the funds so ordered to be paid into the registry of the court the said George W. Cavin do receive the sum of $961.40 in full settlement and satisfaction of all claims against the Houston Oil Company and the Kirby Lumber Company and the receivers of said companies and all other parties hereto of all of said Cavin’s claims growing out of the timber contract between him and the said George W* Lewis; and it is also ordered and decreed that for professional services rendered by John Hamman, Esq., in the former suit between Lewis and Dillingham, Receiver, in Intervention 294, No. 54, Equity, of the docket of this court, the said Hamman be paid from such sum deposited as the parties in interest may agree, subject to the approval and arbitrament o'f the judge of the court below. It is further ordered and decreed that the remainder of the said sum of $5,992.50 be paid over to intervener R. C. Conn, who is hereby adjudged the trustee therefor of George W. Lewis, and. which, after he has paid himself the advances of cash and property heretofore made by him to said Lewis, with interest thereon to this date, and his proper expenses and disbursements as trustee, and shall have paid and settled attorney’s fees and other legitimate charges, he shall account for and pay over to said George Lewis; all subject to the approval and arbitrament of the judge of the court below. It is further ordered, adjudged, and decreed that all costs be paid by the defendants the Houston Oil Company of Texas and the Kirby Lumber Company, and that the clerk shall not make up the final record herein unless, upon application of the parties in interest, the court may order it done.