Northwestern Redwood Co. v. Dicken

This is an action by the plaintiff to recover from defendant the sum of $664.79, alleged to be a balance due on an account.

The case was tried by the court, without a jury, and the defendant given judgment.

A new trial was denied to the plaintiff, and this appeal is from the order disallowing the motion therefor.

Respondent makes a preliminary objection to the consideration of the record here, claiming that the record of the proceedings contained in the transcript is neither a statement of the case nor a bill of exceptions. The notice of motion for a new trial states that said motion “will be made upon affidavits and upon a statement of the case,” and counsel for respondent declares that, inasmuch as the document intended as a statement or a bill of exceptions is thereafter at all times referred to by counsel for the appellant and the judge in his certificate as a “ bill of exceptions, ’ ’ we must accept such characterization of the document as conclusive of its character, and treat it as a bill of exceptions and not a statement. But it is further insisted that, even if it may be said to be a statement, it must be disregarded, since it does not contain, as required by section 659 of the Code of Civil Procedure, specifications of the particular errors occurring at the trial and excepted to by the appellant referred to in the notice of motion.

While the record of the proceedings in the court below as set forth in the transcript was settled by the judge as a “bill of exceptions,” we think that it may be treated as either a statement or a bill of exceptions, and that in either case the principal, if not, in fact, the only, errors of law occurring at the trial and excepted to for which a reversal of the order is asked, are sufficiently pointed out in the “specification of errors” to have enabled the trial court to properly consider them, and to enable this court to review them without difficulty or inconvenience. These errors are thus specified in the statement or bill: “1. The court erred in each and every time in which evidence was admitted over plaintiff’s objections of statements made by L.

Then follows a general or an omnibus specification assigning as error all the other rulings, of the court against the objections of appellant. The first specification, however, was, as stated, sufficiently direct and definite to indicate the errors upon which appellant relied for a new trial, and demands a reversal of the order denying it, and we shall therefore proceed to review the record as to the errors thus pointed out.

The plaintiff is a corporation, organized in pursuance of the laws of this state, and engaged, among other things, in the general merchandising business, at Willits, in Mendocino county. The defendant had, for a number of years prior to July 6, 1907, prosecuted the business of cutting and manufacturing lumber on a body of timber land, consisting of eighteen hundred acres, situated on Cave creek, in said county. During all said time the plaintiff furnished defendant with supplies necessary for his domestic use, and for the purposes of his lumber-mills, and the latter, it seems, was accustomed to shipping and delivering to plaintiff, from time to time, or as it was manufactured, the lumber from his mill. The plaintiff would, upon the receipt of the lumber, credit the defendant upon its books for the lumber so delivered and received at the current market prices.

On the sixth day of July, 1907, the defendant, having previously entered into negotiations with one L. J. Roach, for the sale of his lumber-mill and the timber growing on the land mentioned, executed the following agreement with said Roach, said agreement being, upon its face, as will be observed, unilateral :

“Willits, Cal., July 6, 1907.

“For and in consideration of the sum of Ten Dollars, receipt whereof is hereby acknowledged, I hereby agree to sell to L. J. Roach all my timber on 1800 acres, more or less, situated on Cave Creek in Mendocino County, for Seventy-five cents per M ft. as determined by a disinterested competent timber cruiser, or Two Thousand Dollars cash, at option of Roach, and to allow said Roach Fifteen years from date of final consummation of sale to remove said timber, said Roach to be allowed mill sites and all necessary rights of way on any portion said lands for twenty years from date of sale, same

“Said Roach to take immediate possession of said premises and conduct operations for me until final sale or rejection of title.

“J. D. DICKEN.”

The sum of ten dollars was paid to Dicken by Roach upon the execution of said instrument.

On the seventh day of July, 1907, in pursuance of the foregoing agreement, said Roach took possession and control of the mill and lumber manufacturing business referred to therein. The plaintiff continued to furnish supplies to the mill, but charged the same on its books to the defendant, and Roach delivered to the plaintiff, as defendant had always done, the lumber manufactured at the mill. The lumber so delivered was credited by plaintiff on the account of defendant.

Roach operated the business for a little over a month, when he abandoned it.

It may here be stated that “it was stipulated and agreed by the parties in open court that the account sued on and an itemized bill for which was then on file among the papers in the case was correct, so far as the particular items thereof were concerned; that the goods to the amount of $800 had been sold and delivered to someone at the ‘Dicken Mill’ mentioned in the evidence; but it was not admitted that defendant was liable therefor.”

It was further admitted that “the controversy was in part whether said goods were sold to defendant through one L. J. Roach, as his agent, or to said L.

It appears that the written instrument or agreement on the part of Dicken quoted above had been altered in a material respect either before or after the time at which it was signed by Dicken. The document was prepared by one E. A. Selfridge, Jr., president of plaintiff corporation. As so prepared originally the last sentence of the writing read as follows: “Said Roach to take immediate possession of said premises and conduct operations from date until final sale or rejection of title.” Selfridge and Roach testified that, when Dicken was about to sign the instrument, Roach objected to the words “from date” contained in said last sentence, saying to Self ridge, in the presence of Dicken, that “he would not go out there with the possibility of the option being rejected, the sale not going through.” Selfridge then said, “Very well; we will change ‘from date’ and say ‘for me.’ ” The alteration thus suggested was then made, and, according to the testimony of Self ridge and Roach, with the consent of both Dicken and Roach, and as so altered the agreement or writing was signed by Dicken.

Dicken flatly contradicted Selfridge and Roach on this point, and emphatically declared that the alteration was made after he had signed the instrument and without his knowledge and consent.

The court found with and in favor of Dicken as to the alteration, and held the transaction resulting in the writing to have constituted a contract for the sale of the property to ' Roach.

It appears from testimony offered and received on behalf of plaintiff that at the time of the alleged sale of the property to Roach, Dicken was indebted to plaintiff for supplies in a large sum of money, and that Roach, while running the mill, delivered lumber to plaintiff of much greater value than the"

Prom what has thus far been seen of this controversy, as it is presented by the pleadings and the evidence, the vital point hinges upon the legal nature and effect of the transaction between Dicken and Roach as evidenced by the writing executed by Dicken on July 6, 1907, and quoted in this opinion.

If the transaction amounted to the making of an executory contract of sale of the mill and the timber on defendant’s land, then, manifestly, Roach was alone responsible for all obligations incurred while he operated the mill, and was entitled to all credits for lumber delivered by him to plaintiff during the same period or term. If, on the other hand, the transaction involved only an option on the part of Dicken to sell to Roach, and the latter assumed control and management of the property for Dicken, then, it is equally manifest that, in the absence of any other agreement to the contrary, Dicken continued to be responsible for all supplies furnished the mill necessary in the operation thereof, and was entitled to all credits for all lumber delivered to plaintiff by Roach during the period the latter operated the mill. In this latter case, in other words, Roach was only an agent of Dicken.

A correct construction of the transaction between Dicken and Roach is, therefore, of vital importance.

To aid it in the construction of said transaction, the trial court, over the objections of plaintiff, admitted evidence of the declarations of Roach, made to the witnesses testifying thereto, after Dicken had executed the writing and Roach had taken charge of the property, and not in the presence of either plaintiff or defendant, to the effect that he (Roach) had bought from Dicken, and was the owner of, the lumber-mill and the business connected therewith.

The rulings referred to were, in our opinion, not only erroneous, but, in view of the purpose of the evidence admitted thereunder, were highly prejudicial to the plaintiff.

Roach is not a party to this action, and his declarations after the consummation of the transaction, not in the presence of the plaintiff, that he had bought the mill and lumber business from Dicken, constituted the plainest sort of hearsay testimony, and could have been admissible under no conceivable theory except, after proper foundation had been laid therefor, for the purpose of impeaching Roach.

These declarations were not properly receivable in evidence under the rule of res gestae, and obviously not admissible on the ground that they constituted declarations against the interest of the declarant. Nor would proof of such declarations constitute proper substantive or independent and affirmative evidence contradictory to the testimony of Roach. Undoubtedly, where the intention of the parties to a written contract is rendered obscure by the ambiguity of the language in which its terms are expressed, evidence of declarations of the parties to said contract, or either of them, made contemporaneously with the negotiation and execution of the agreement, if explanatory of the purpose or intent of the same, would be admissible as part of the transaction or res gestae. But it is very clear that such declarations made by either of the parties, not in the presence of the parties to the action, after the transaction has been fully completed, in an action between one of the parties to the transaction and a third party, would involve a narrative of a past event, and, therefore, constitute hearsay testimony pure and simple. By no known rule of law are declarations thus made binding upon a stranger to the transaction.

But counsel for respondent advances the theory that, at the time the alleged declarations were made, “the transaction was not completed, and would not have been completed until the final transfer of title by Dicken to Roach.” In this counsel is mistaken. The question to be determined by the court as to the transaction between Dicken and Roach was: What

The case of Lewis v. Burns, 106 Cal. 381 , [ 39 Pac. 778 ], cited by respondent, was where the declarations of one De Blainville, deceased at the time of the trial, were allowed in

In other words, the declarations of De Blainville constituted a part of the very transaction on which the cause of action in that case rested. They were not, as here, made after the completion of the transaction.

The case of Bates v. Ábleman, 13 Wis. (644) 721, also cited by respondent in connection with the attempted application of the rule of res gestae to the declarations of Roach, afford no support to his position. This case, as we read it, is against him. There the validity of an assignment by a party for the benefit of his creditors was the question in controversy. The trial court refused to allow a witness to testify to declarations made by the assignor in insolvency after the assignment as to his intention in making it. The Wisconsin court, speaking of this ruling, said: “We think it [the testimony] was properly excluded. The statements of Seymour were not those of

The very recent case, In the Matter of the Estate of Henry Gird, Deceased, 157 Cal. 534 , [ 108 Pac. 499 ], was where the question whether the decedent was the father of the distributees of the estate of the deceased was the vital issue. A futile attempt was made to prove certain declarations alleged to have been made by the mother of said distributees to a doctor, some months prior to the birth of one of the children, “to the effect that she was ‘in the family way’ by one Smith, and that she desired to be rid of the child by an operation. ’ ’ Upholding the ruling of the trial court excluding said declarations, the court says: “This proposed evidence was properly excluded by the trial court. Alice was not a party to this proceeding, but only a witness on behalf of her children. Evidence of these declarations by her to the physician would have been pure hearsay, in no way binding on her children as evidence on the question of paternity. Being contrary to her evidence given on that question, the declarations, waiving other objections thereto, would have been admissible by way of impeachment of Alice as a witness, but a complete answer to appellants’ claim in this regard is that no foundation was laid for any such impeachment on the examination of Alice.”

That the effect of the rulings of the trial court admitting these declarations was to greatly prejudice the rights of plaintiff in the action cannot for a moment be doubted. The instrument which is the main subject of this controversy appears, from its language, to be nothing more than a mere option, or as involving only the bestowal upon Roach by Dicken of the right to accept or reject, within a certain time, the offer therein contained to buy the property mentioned at the price named. It is plainly apparent, therefore, that, in order to show that the transaction resulting in the execution of the instrument by Dicken constituted an executory contract of sale, parol testimony was absolutely necessary to be received. In fact, the rulings of the court admitting testimony aliunde the instrument itself for the ascertainment of its intent conclusively show that the court was in doubt as to the legal effect of the transaction as evidenced by the writing, for it may safely be assumed that, if the language of the instrument itself had been reasonably clear in the expression of the intent of the parties to the transaction, the court would have neither required nor allowed parol testimony to be introduced upon the subject, since, under such circumstances,

Of course, if, as we have in effect before observed, some competent evidence had been received showing that the transaction was of the nature claimed for it by respondent, a reviewing court would not perhaps feel justified in disturbing a finding based upon such testimony. But the situation here is that the court’s general findings (there is no specific finding upon the point under consideration), which necessarily embrace a finding that the transaction between Dicken and Roach amounted to an executory contract of sale, must rest, if at all, solely upon a construction of a writing whose language is apparently opposed to such construction.

But even if it could be said that there is some language in the instrument which lends some color to the construction which the court has given it, the evidence of the declarations of Roach must, nevertheless, be held to have been prejudicial.

In Estate of James, 124 Cal. 653 , [ 57 Pac. 578 , 1008], it was contended “that there is sufficient evidence in the record, which came before the court without objection, to support the findings of fact, and that, therefore, even conceding the admission of evidence under objection which should have been denied admission, still a new trial for the aforesaid reasons should not be ordered.” In answer to that contention, the court said: “This position cannot be sustained. If improper evidence under objection has been admitted, it is impossible for this court to say how much weight and influence it had in the mind of the trial court in framing its findings of fact. The improperly admitted evidence may have been all-powerful to that effect. As far as this court knows, it may have been that particular evidence which turned the scale and lost the case to appellants. This must of necessity be the rule wherever improper evidence has been admitted which upon its face tends in any degree to affect the final conclusion of the court.” (Italics ours.),

There are some other questions discussed by counsel in their briefs, but the point to which we have solely addressed our attention is conceded by counsel for the respondent to involve the pivotal proposition in the controversy, and, therefore, in view of our conclusion as to said point, others need not be noticed.

The order refusing plaintiff a new trial is reversed and the cause remanded to the court below for trial de novo.

Chipman, P. J., and Burnett, J., concurred.

A petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on August 25, 1910.