Epley v. Ingersoll

SCHOTTKY, J. pro tem. Plaintiff commenced an action against defendants upon a promissory note executed by defendants in favor of plaintiff’s assignor. Defendants Elmer Ráy Ingersoll and Emma Ingersoll, his wife, were copartners doing business under the firm name and style of Ingersoll Lumber Company. On May 10,1949, at Marysville, California, defendants gave plaintiff’s assignors, Arthur D. Mervin and Rebecca Mervin, his wife, a promissory note for $6,000, payable in $1,000 monthly installments commencing July 1, 1949, with a certain grace period allowed for payment of the last two installments. The note was given in consideration for and in connection with an agreement between defendants and plaintiff’s assignors, the Mervins, also dated May 10, 1949, which superseded a previous agreement between the parties, [41]under which agreement of May 10, 1949, defendants agreed to purchase all the merchantable timber of specified size and variety located on a certain 480 acres of real property owned by the Mervins and situated in Tuba County, California. The agreement contained the proviso:

"Should it develop during the overall operations that there is more than five per cent of loss due to overripe trees there shall be an adjustment made at that time between the parties hereto. In case the parties cannot agree upon a reasonable adjustment to be made in case one should have to be made as provided herein, then they shall submit the matter to arbitration. Each party shall select one person and the two so selected shall name a third disinterested person, and the decision of the majority shall be binding upon the parties hereto. ”

The complaint alleged that only $2,960 had been paid on the note and sought judgment for the balance of $3,040, interest, and the sum of $450 attorney’s fees. Defendants in their answer set up a-separate defense in which they alleged that the percentage of overripe and unmerchantable trees was more than 50 per cent; that they had sought an adjustment which had been refused by plaintiff; that the consideration for said note had therefore failed to the extent of $3,040, the balance due on the said note; and that plaintiff was not entitled to recover thereon.

The case was tried by the court sitting without a jury. The principal and in fact the only issue at the trial was the amount of timber which was unmerchantable because overripe or rotten. Expert testimony and other testimony was presented by both parties, and the evidence was highly conflicting. The trial court found that defendants were entitled to an allowance of $600 for overripe timber over and above the 5 per cent tolerance allowed by the contract. This reduced the unpaid balance on the note from $3,040 to $2,440, for which plaintiff recovered judgment, together with $450 attorney’s fees. Defendants’ motion for a new trial was denied and they have appealed from the judgment and from the order denying their motion for a new trial.