THOMAS v. LYONS (1949)

This is an appeal by defendant Ukiah Lumber Mills from a judgment equiting plaintiff's title to certain real property and the timber thereon. In addition the judgment decreed that a contract between plaintiff and defendants for the purchase and sale of the timber had been lawfully terminated by respondent by reason of defaults in payments thereunder by defendants and that said contract was null and void.

The complaint alleged two causes of action; count one contained allegations to quiet plaintiff's title to the land therein described and count two alleged the execution of a contract for the sale to defendants and the defendants' failure to make payments in accordance with the terms thereof. Defendants' answer claimed an interest in the land by virtue of the contract and denied that it had been breached. The case was tried before the court without a jury which rendered the aforesaid judgment appealed from by said defendant.

Said contract, the terms of which are not in dispute, was executed on April 11, 1946 by Marin Mann Thomas and her husband Fred Thomas, who was then living, and Charles P. Lyons, wherein the Thomas' agreed to sell and Lyons agreed to buy the timber standing on the Thomas property. Subsequently the contract was assigned by Lyons to the defendant Ukiah Lumber Mills. The sale price of the timber was $1.75 per thousand feet payable on or before the 10th day of each month for the timber cut during the preceding month beginning June 10, 1946. The contract further provided that the minimum monthly payment should not be less than $200. Payment was excused for the calendar month in which the buyer was prevented from hauling logs by government regulations or other restrictions or by weather conditions. The buyer was required to submit to the sellers a statement on or before the tenth day of the month showing the number of feet hauled during the preceding month. Upon the execution of the contract $6,022 was paid by the buyer, of which sum $1,022 was to be credited by the sellers to the monthly payments first to become due from the buyer and the balance was payment in advance for the last $5,000 worth of timber removed. When the parties estimated the value of the remaining timber equalled the advance, the quantity of timber yet to be removed was to be determined by agreement or on appraisal by a cruise made by a timber cruiser. It was provided further that if the buyer defaulted in the payment of any money due under the contract or otherwise committed any act of insolvency as therein enumerated, the sellers could, at their option, immediately terminate the agreement by notice to the buyer and if they so desired declare the balance of the purchase price immediately due and payable. With respect to default by the buyer in any of the terms, conditions or covenants, other than payments of money, the contract provided for a thirty day written notice to the buyer requiring performance within said time and if performance was not effected within said period the sellers could declare a default. Time was made the essence of the agreement and it was provided that a waiver of any of the terms and provisions would not operate as a waiver of such terms in the future.

The court found that the defendant did not make regular minimum monthly payments of not less than $200 as required by the contract and that it was in default in the sum of $439.25 on November 25, 1947, the date of the filing of the complaint. The court further found that at the date of default the remaining timber was worth more than $5,000 at a price of $1.75 per 1,000 feet; that the buyer did not furnish at the sellers a statement showing the number of logs hauled during the preceding month and that the filing of the complaint and its service upon the defendant served as notice that the sellers exercised the option to terminate the contract.

Appellant contends that the evidence is insufficient to sustain the findings that there was a default in the monthly payments; that the contract of sale was modified by two subsequent agreements and that a forfeiture occurred from the termination of the contract from which it should have been relieved under the provisions of section 3275 of the Civil Code.

Turning first to the question of whether the contract of sale was subsequently modified, the record discloses the following circumstances. Respondent Thomas was indebted to the Redwood Empire Production Credit Association and on January 1, 1947 executed an assignment of the moneys accruing under said contract to said Credit Association. The assignment contained a provision that on and after August 1, 1947 and until the advances made by the defendant Ukiah Lumber Mills should have been repaid the Ukiah Lumber Mills had the right to retain one-third of the moneys accruing under the contract of sale entered into by respondent Thomas with the Ukiah Lumber Mills. The amount of the advances made by said lumber mills was not specified. On February 18, 1947 said mills entered into an agreement with the Redwood Empire Production Credit Association wherein it agreed to be bound by the previous assignment. This agreement specified that the advances made by said mills to respondent Thomas totalled $1,822. The effect of the foregoing agreements, according to appellant, was that respondent Thomas acknowledged that $1,822 had been advanced by appellant on account of the contract for the purchase of timber for which appellant is entitled to be credited, and that a default in the payments required to be made under said contract cannot be considered to have occurred prior to their execution.

Whether or not appellant's foregoing contention is correct cannot be decided from the condition of the record herein. The alleged modification was not pleaded by appellant and thus no issue with respect thereto was raised in the trial court. The rule is well settled that a party cannot assert a new theory on appeal for the first time. Grimes v. Nicholson, 71 Cal.App.2d 538, 162 P.2d 934.

Appellant's contention that it should be relieved from the alleged forfeiture under the provisions of section 3275 of the Civil Code likewise cannot be considered by this court since appellant did not plead facts justifying the application of said section. See Barkis v. Scott, 34 Cal.2d 116, 208 P.2d 367.

Appellant's remaining contention relates to the sufficiency of the evidence to sustain the finding that they were in default in the minimum monthly payment as of November 25, 1947 in the sum of $439.25.

From our examination of the checks received in evidence we are unable to determine for which monthly period they were given in payment. We find no testimony which purports to specifically allocate the checks to the applicable monthly period. Defendant's Exhibit N, which was referred to by the trial court in its memorandum opinion, is a sketchy record which is of no assistance to us. Our difficulty in this regard is well illustrated by the fact that respondent's brief sets forth one formula for the application of the payments different from that of the trial court while her oral argument was predicated upon a yet different formula which leads to a result not only different from the result reached by appellant but also different from that reached in respondent's reply brief.

In view of the state of the record it is impossible for this court to determine whether a default existed, or if it did, in what amount. While the amount of the default is immaterial, the fact of a default is. The are mindful of the rule that findings made by the trier of fact must be affirmed if there is any substantial evidence in support thereof but since the record before us discloses no evidentiary basis for finding that a default existed, we are forced to the conclusion that the finding of a default is not sustained by the record and the judgment must therefore be reversed.

The judgment is reversed.

PEEK, Justice.

ADAMS, P. J., and THOMPSON, J., concur.