Consolidated Lumber Co. v. Frew

CONREY, P. J.

This is an appeal by the defendants from an order granting plaintiff’s motion for a new trial. The action is one to recover judgment for seven thousand five hundred dollars, with interest, upon a note dated September 30, 1911, made by the defendants in favor of plaintiff’s assignor, one E. U. Wheeloeh. Execution and delivery of the note are admitted, as well as nonpayment thereof. A reduction is claimed on account of a so-called partial failure of consideration, the defendants offering to pay a sum slightly less than four thousand dollars, together with interest thereon from date of the note to date of the commencement of the action. The case was tried to a jury which returned a verdict for only six thousand dollars, whereas the plaintiff contends for the entire indebtedness shown on the face of the note.

In December, 1910, the Consolidated Lumber Company and the Watts Lumber Company sold and delivered to the defendant American Aeroplane Company lumber which was used in the construction of grandstands, hangars, and other structures on certain land known as Dominguez Aviation Field in Los Angeles County. Bills were rendered to the defendant company for such lumber, amounting to 648,710 feet, being the aggregate amount of the deliveries severally claimed to have been made by the lumber companies. The defendant company held a lease on the Dominguez Aviation Field lands whereon the structures above named had been erected. The defendant company having failed to make prompt payment for its lumber, claims of lien against that property were filed

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by the lumber companies. Shortly before the time limited by law for the commencement of actions for the enforcement of such liens, conferences were held between the representatives of the lumber companies and of the aeroplane company, which resulted in a settlement made for the purpose of preventing foreclosures. Mr. Will L. Frew was a director and was secretary of the American Aeroplane Company, and', seems to have represented that company in its dealings with the lumber companies when the lumber was ordered and delivered, and.also in the subsequent settlement. As witness for the defendant company, Mr. Frew stated that Mr. Whee-lock, who was representing the lumber companies, made a proposition that if the defendant company would pay forty per cent of the face of the claim, he would allow it to stand for a year on the condition that he would hold a transfer of the lease as security, and any time before the expiration of that year the debtor could pay the amount or adjust the amount of the claim and the lease would be transferred back. This testimony was received subject to all legal objections' which might be made to it. There was a stipulation covering such objections, both on general grounds and upon the special ground that such testimony tended to vary, modify, and alter the terms of the written contract between the parties, - and that by reason of the acts, declarations, and transactions of the defendants they were estopped from proving or offer- ■ ing to prove a shortgage of lumber delivered to the defend- ’ ant company. Following upon the negotiations above mentioned, the defendant company did pay forty per cent of the claim, and the defendant corporation executed an unconditional transfer of its lease to Wheelock in his own name, but really as trustee for the Consolidated Lumber Company, and-the recorded lien claims were canceled. This transfer was made on April 25, 1911. It should be noted that on account of some objections made by Wheelock to the original lease held by the defendant company, a new arrangement was made, by consent -of all the parties, with the lessors, whereby the old lease was canceled and a new lease made to the defendant company, which was dated and executed on April 25, 1911, and it was that lease which was on that day assigned ' by the defendant company to Wheelock. At the same timeWheelock executed to the defendant company a sublease of the property,- which sublease recited Wheelock’s ownership