Canon v. Chapman

161 F. Supp. 104, 9 Oil & Gas Rep. 694, 1958 U.S. Dist. LEXIS 2330
CourtDistrict Court, W.D. Oklahoma
DecidedMarch 21, 1958
DocketCiv. 7018
StatusPublished
Cited by4 cases

This text of 161 F. Supp. 104 (Canon v. Chapman) is published on Counsel Stack Legal Research, covering District Court, W.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Canon v. Chapman, 161 F. Supp. 104, 9 Oil & Gas Rep. 694, 1958 U.S. Dist. LEXIS 2330 (W.D. Okla. 1958).

Opinion

RIZLEY, District Judge.

The plaintiff, F. T. Canon, instituted this action seeking recision of a purchase contract on a used oil-well drilling rig and a return of $15,000 cash paid on the purchase price of the rig, cancellation of two promissory notes given for the purchase price of the rig and for damages. The plaintiff alleges joint action by all of the defendants amounting to fraud in the sale of the rig, false representations, breach of express warranty and breach of fiduciary relationship.

The defendant Smith on behalf of the Star Drilling Company counterclaimed seeking judgment on an $8,000 note given by plaintiff for part of the purchase price of the rig.

The defendant Chapman counterclaimed for sums expended for repair to the rig and for judgment on a $2,000 promissory note given by plaintiff as part of the purchase price and in which he, Chapman, claims to own an undivided one-half interest.

The defendant Harman counterclaimed on the same $2,000 note in which he claims to own an undivided one-half interest.

The defendant Smith on behalf of the Star Drilling Company filed a cross-complaint against the defendant Harman which was voluntarily withdrawn before trial.

The Court finds the following facts and conclusions of law according to its conception of the preponderance of the evidence:

Findings of Fact

1. The plaintiff now is, and during all material times has been, a .citizen and resident of the State of Michigan.

2. The defendants now are, and during all times material have been, citizens and residents of the State of Oklahoma.

3. The amount in controversy in the case exceeds the sum of $3,000 exclusive of interest and costs.

4. The plaintiff, F. T. Canon, lives in Detroit, Michigan. He has been engaged in the oil business since 1930 or 1931 and has operated “cable tool drilling rigs” in the states of Michigan, Ohio and West Virginia. He also worked as a truck driver and rough neck in oil fields in Texas where “rotary drilling rigs” were used.

5. The defendant F. L. Chapman is the owner of the Chapman Pipe and Supply Company at Oklahoma City, Oklahoma, and deals in all kinds of used oil field equipment, including used rotary drilling rigs.

6. The plaintiff first met Chapman in 1950 or 1951 in Chicago, Illinois, and in 1951 or 1952, he visited with the defendant Chapman in Oklahoma City, Oklahoma, for one day while enroute to Albuquerque, New Mexico, and had talked with him two or three times on the telephone prior to 1955.

7. In July, 1955, the plaintiff telephoned the defendant Chapman and requested Chapman to look over some rotary drilling rigs., owned by the Tiger Drilling Company of Oklahoma City which had been advertised for sale in a national oil and gas publication. The plaintiff offered to pay the defendant Chapman for inspecting the rigs and advised Chapman that he wanted to buy a rotary drilling rig which would drill from 2,500 to 3,500 feet without breakdowns and that he wanted the rig by September 1, 1955. Chapman inspected the Tiger Drilling Company’s rotary rigs and telephoned the plaintiff regarding them, but the plaintiff concluded that these were too high priced for him.

8. A short time thereafter, the defendant Chapman telephoned the plaintiff at Detroit, Michigan, and told the plaintiff that he, Chapman, had located *107 a drilling rig which might meet the plaintiff’s requirements and requested the plaintiff to come to Oklahoma City to inspect the rig. Chapman said that a partnership was breaking up and that the partners, who owned the rig, needed the money. He was, in reality, referring to the Star Drilling Company which is a corporation rather than a partnership.

9. Prior to this last mentioned telephone call, the defendant Chapman in a conversation with the defendant Harman had learned that the Star Drilling Company, an Oklahoma Corporation of which the defendant Billy Gene Smith was the President, had listed a used Wilson rotary drilling rig for sale.

10. The defendant Don Harman is the owner and operator of the Don Har-man Pipe and Supply Company in Oklahoma City and was engaged in buying and selling all kinds of used oil field equipment including used rotary drilling rigs. An inventory of the Star Drilling Company rig had been left with the defendant Harman by the defendant Billy Gene Smith who stated that he wanted to sell the rig for the net sum of $20,-000 and the broker, Harman, could add another ten percent (10%) or $2,000 on the sale price for his commission in selling the rig.

11. At the request of the defendant Chapman, the plaintiff came to Oklahoma City. After his arrival in Oklahoma City, the defendant Chapman made known his opinion that the Star Drilling Company rig was in good shape and would drill a well within a reasonable time to a depth of 3,500 feet. Chapman had not inspected the rig and so informed the plaintiff of this fact.

12. On the day following his arrival in Oklahoma City, the plaintiff and the defendants Chapman and Harman drove in Harman’s car to Carter County, Oklahoma, to inspect the Star Drilling Company rig. On the trip to Carter County, the rig was discussed in a general way. The defendant Chapman told the plaintiff that the rig had drilled several wells in recent months and was apparently in good shape. The defendant Chapman asked the plaintiff to refrain from discussing price with Smith upon their arrival in Carter County for the reason that he, Chapman, could get a better deal on the price if the plaintiff would allow him, Chapman, to negotiate with Smith. Because of this request by the defendant Chapman, plaintiff did not discuss price with Smith, but instead left negotiations on price up to the defendant Chapman.

13. When the plaintiff and the defendants Chapman and Harman arrived at the lease site in Carter County, the rig was stacked. The defendants Chapman and Harman introduced the plaintiff to Billy Gene Smith, president of the Star Drilling Company, and then walked away while the plaintiff and Smith inspected and discussed the rig. While plaintiff contends that the defendant Billy Gene Smith represented to plaintiff that “this particular rig was in first-class mechanical condition and was capable of drilling to 3500 feet with a minimum of repairs,” the preponderance of the evidence is that the only representations made in this connection were to the effect that “this rig had recently drilled numerous wells without necessity of major repair or loss of time.” The overwhelming evidence by outstanding representatives of the oil business who had engaged the services of the rig shortly before the sale, was to the effect that such representations were true.

14. The plaintiff was told by Billy Gene Smith that the chain guard should be fixed and that the water pump on one of the motors leaked and pointed out other necessary repairs. Smith also stated that he had a few joints of worn drill pipe that should be replaced, but that he had about 2,500 feet of good' drill pipe. The plaintiff wanted an additional 1.000 feet of drill pipe and wanted the rig cleaned up and painted and also wanted the necessary replacement parts secured and installed.

15.

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Bluebook (online)
161 F. Supp. 104, 9 Oil & Gas Rep. 694, 1958 U.S. Dist. LEXIS 2330, Counsel Stack Legal Research, https://law.counselstack.com/opinion/canon-v-chapman-okwd-1958.