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Morris Brothers Lumber Co. v. Eakin

decided: January 7, 1959.


Author: Maris

Before BIGGS, Chief Judge, and MARIS and McLAUGHLIN, Circuit Judges.

MARIS, Circuit Judge.

This is an appeal by the plaintiff from a judgment entered by the District Court for the Western District of Pennsylvania for the defendants n. o. v. and from an order in the alternative granting a new trial if the judgment n. o. v. should be reversed on appeal. The judgment was entered in a suit which the plaintiff, Morris Brothers Lumber Company, had brought against the defendants, David E. Eakin and John L. Eakin, Jr., who are brothers, and their wives, Frances B. Eakin and Mary Louise Eakin, respectively, for damages of $20,698.30 resulting from a shortage of 172.089 acres in a tract of timber, known as the Copperhead tract, which the plaintiff had purchased from the defendants and which had been represented to contain about 291 acres of land. In a second count, the plaintiff asserted fraud on the part of the defendants in misrepresenting the actual number of acres contained in the tract, claiming a loss of profits of $34,755.39. Jurisdiction was invoked by virtue of the diversity of citizenship of the parties. The law of Pennsylvania governs the rights of the parties to the litigation.

The controversy arises out of the following facts: The father of defendants David E. Eakin and John L. Eakin, Jr. had acquired in 1908 and 1913 a tract of land known as the Kennerdale tract, containing 927.85 acres, located in Clinton Township, Venango County, Pennsylvania, of which the Copperhead tract was a part. As devisees under their father's will the Eakin brothers became the owners of this land upon his death in 1951. In the course of administering his estate, of which the two brothers were executors, a forestry consultant at their request prepared a timber appraisal report under date of December 11, 1951. The total area of the Kennerdale tract was divided into three areas labelled "AB", "CD" and "EG". The portion known as the Copperhead tract was designated as "EG" and marked as containing 291 acres.

A few years before entering into the transaction which culminated in the conveyance to the plaintiff of the timber contained in the Copperhead tract, Richard D. Morris, president of the plaintiff company, made inquiries concerning the purchase of timber owned by the Eakin brothers but was informed by Marriott C. Dick, a purchasing agent for another lumber company, that they were not interested in selling. It appears that subsequently on November 12, 1954 David Eakin wrote to Dick offering to sell a "tract of timber" consisting "of 260 acres, - more or less". Dick visited Eakin who drew a sketch showing the boundaries of the property he proposed to sell which corresponded with the boundaries shown by Eakin to the plaintiff's officers and employees at a later date. The company by whom Dick was employed did not purchase the timber. Shortly thereafter Dick arranged to go upon the land with Morris.

On December 6, 1954 Dick, Morris and George J. Hepfl, plaintiff's foreman, went upon the land to view the timber.When they arrived at a powerhouse on the boundary of the tract Morris left them and went into the midst of the timber in order to determine whether it was as thick in the center as it was around the edges, and to determine whether or not the "dollars' worth of timber" was there. This he determined by estimating the number of board feet that he thought it would cut per acre and multiplying it by the number of acres and then multiplying that by the average market price at that time for timber. He had been informed by Dick that the tract contained 300 acres. He was in the woods approximately three hours. As he went through the timber he concluded that it would produce between 15,000 and 20,000 board feet per acre. He concluded that the timber "was worth $8.00 per thousand on the stump" and "averaging 15,000 to the acre would make it worth $120 per acre" or $36,000. Oil and gas wells were located on the tract as well as power stations.

Dick and Morris then went to the Eakin home.They found Frances B. Eakin, David's wife, at home. She told Morris that the Copperhead tract contained 300 acres and that the price was $35,000. Morris proposed to pay as follows: $500 down, $17,000 at the time a written agreement was executed, and $17,500 ninety days from that date, no timber to be cut until it was paid in full. Morris and Dick then went to a local bank in Franklin, Pennsylvania, to talk to one Ren D. Latchaw, who handled the Eakins' affairs, concerning this property and then proceeded to the office of H. Carl Wasson, an attorney, in the same city. Wasson prepared a receipt for the deposit of $500 which was signed by David Eakin for himself and his brother, and reads, in pertinent part, as follows:

"We hereby acknowledge to have received from Morris Brothers Lumber Company, of Vienna, Ohio, the sum of Five Hundred Dollars ($500.00) to apply on the purchase price of a tract of timber in Clinton Township, Venango County, Pennsylvania, formerly owned by John L. Eakin and now owned by David E. Eakin and John L. Eakin, Jr., also known as Lester Eakin, heirs-at-law and devisees of John L. Eakin, deceased, the said timber being all the timber now growing upon a parcel of land in said Clinton Township bounded as follows:

"On the North by land formerly the Gailey Farm and land owned by the said David E. Eakin, et al from which the timber was sold to Delbert Rankin by John L. Eakin; on the East by the Bullion and Kennerdell Black Top Road; on the South by the gravel road which runs from the above mentioned black top road westwardly to what was formerly Summit City and on the West by the Drilling Rig Road, the Waite Lease and land now or formerly of Gailey. Containing about two hundred ninety-one (291) acres, and being commonly known as the Cooperhead [sic].

"The total purchase price for said timber is thirty-five thousand Dollars ($35,000.00), of which Seventeen Thousand Dollars ($17,000.00) will be paid on or about December 10, 1954, and the balance, to-wit, Seventeen Thousand Five Hundred Dollars ($17,500.00) within three (3) months from the date of the Timber Contract, it being understood that no timber whatsoever will be cut from said premises until the purchase price has been paid in full. * * * No timber shall be cut from said premises less than ten (10) inches in diameter measured breast high. * * * The purchasers shall use normal care to keep from damaging the small timber and shall likewise use due care in protecting all oil wells and oil, gas and rod lines * * *. The purchasers shall have five (5) years from the date of the Agreement in which to cut and remove said timber." It was at Wasson's office that Morris for the first time noticed that the acreage was 291 acres but said that it was "close enough". He also learned there that only timber 10 inches in diameter at breast height was to be cut.

On December 10, 1954 Morris, Hepfl and David Eakin went upon the land and there seemed to be some confusion in finding the exact boundaries. Morris told Eakin that the line was not a particular factor with him but it was to Hepfl because of the danger of crossing the line into someone else's timber. Eakin told Morris that there were 291 acres, although they always referred to that tract as containing 300 acres. Morris learned that he was not to cut timber from a small acreage at the west side of the premises or timber within a certain distance from the oil wells and power stations located on the tract, but he thought it was still big enough so that he could give that much up and not be hurt badly. Under date of December 9, 1954 the parties executed an agreement in which it was recited that the two Eakin brothers had conveyed to the plaintiff a tract of timber containing about 291 acres for $35,000, which was to be paid to the Exchange Bank and Trust Company of Franklin to release judgments held by the bank and for delivery of a timber deed. Under the same date a document described therein as a timber deed was executed by the two Eakin brothers and their wives, called therein grantors, and signed by the plaintiff, called grantee, selling and conveying all the timber 10 inches or over in diameter measured breast-high contained in the Copperhead tract which was described therein by the same boundaries which were set out in the receipt signed December 6, 1954, and as "Containing about two hundred ninety-one (291) acres, and being commonly known as the Copperhead." The grantee was given five years to remove the timber. The grantors reserved to themselves and the grantee agreed not to cut any timber within 50 feet from any of the 35 oil wells and 100 feet from either of the two power stations located on the tract.

The plaintiff's employees started cutting the timber in April, 1955. They told Morris that there would be a shortage in the timber which he disbelieved. When again informed of a shortage he went upon the property but thought he should wait a little longer. When the employees were "about finished with the last set" it became certain that there was a shortage. About 1,500,000 board feet had been cut whereas Morris had estimated that 300 acres would produce at least 4,000,000 board feet. The present suit was started on June 1, 1956.Subsequently, a survey showed that there were only 118.911 acres upon which timber had been cut.

The case was tried to a jury. After the plaintiff rested its case the defendants moved for compulsory dismissal under Rule 41(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. The district court dismissed plaintiff's count based on fraud, concluding that there was no proof of fraudulent representations. Upon the close of the evidence, the defendants moved for a directed verdict which was granted in respect to the wives of the Eakin brothers, but decision was reserved in respect to the two Eakin brothers themselves. The jury returned a verdict in favor of the plaintiff in the amount of $15,000. The district court, after hearing argument on the defendants' motion for judgment n. o. v. or for a new trial, set aside the jury verdict and entered judgment in favor of the defendants n. o. v. In the alternative, the district court entered an order granting a new trial on the ground that the jury's verdict was contrary to the weight of the evidence. The plaintiff appealed.

On this appeal the plaintiff contends that the district court erred in granting judgment n. o. v. because the verdict was in accordance with the evidence, the applicable law and the charge of the trial judge. It also urges that the district court erred in dismissing its count based on fraud. No objection, however, is raised as to the action of the ...

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