Parks-Davis Auctioneers, Inc. v. T.O.K. Co.

588 S.W.2d 837, 1979 Tex. App. LEXIS 4146
CourtCourt of Appeals of Texas
DecidedSeptember 28, 1979
DocketNo. 5946
StatusPublished
Cited by2 cases

This text of 588 S.W.2d 837 (Parks-Davis Auctioneers, Inc. v. T.O.K. Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Parks-Davis Auctioneers, Inc. v. T.O.K. Co., 588 S.W.2d 837, 1979 Tex. App. LEXIS 4146 (Tex. Ct. App. 1979).

Opinion

HALL, Justice.

Plaintiff-appellee T.O.K., Inc., and defendant-appellant Parks-Davis Auctioneers, Inc., executed a written contract dated November 30,1974, and an amendment thereto dated September 30, 1975, for the excavation, removal and reconditioning of approximately 1,360,000 feet of an old petroleum products pipeline running through nine counties in east and central Texas. The line was composed of eight-inch and ten-inch steel pipe, except for a very small portion (40,000 feet) of six-inch steel pipe. It was located in an easement owned by Gulf Refining Company. Although the pipe in question was not in use, other lines in the easement were in use. The pipeline was originally constructed in the early 1900’s of 20-foot lengths of pipe joined together by threaded collars, a method of construction which is obsolete. Over the years of its use, sections of the pipeline in question had been replaced with lengths of pipe joined by welding, which is the present method of construction.

Parks-Davis and the other appellants (whom we shall later identify), acting together in a joint venture, purchased the pipe from Gulf with the intention of selling it for a profit after its removal and reconditioning. It is undisputed that Parks-Davis was acting for itself and the other appellants when it executed the contract and amendment in question.

The contract provided that T.O.K. would excavate the pipe and deliver it to storage yards located along the line; that Parks-Davis would “promptly thereafter” remove the pipe to its yard in the City of Houston; and that after the pipe was placed in the Houston yard, T.O.K. at its expense would clean, straighten, drift1 and tally the pipe. Prior to delivery to Parks-Davis, it was T.O.K.’s duty to “cut the pipe in approximate 40-foot lengths, using the rough cut or torch cut method, and as near as possible to cut only at the welds and to strap 2 all pipe [839]*839and cut at a minimum of two inches behind the collar.” T.O.K. also agreed to leave the pipeline right-of-way “in a clean, level and smooth condition,” “repair all fences and roads,” and “restore and leave the surface of the right-of-way in a condition acceptable to Parks-Davis, Gulf Refining Company, and the landowner.”

The original contract provided that Parks-Davis would pay T.O.K. “the sum of 58$ per foot for all pipe delivered to and accepted by Parks-Davis in compliance with the terms of this Agreement”; that T.O.K. would invoice Parks-Davis on or before the 5th day of each month “for all pipe delivered to and accepted by” Parks-Davis during the preceding month; and that Parks-Davis would make payment within ten days after receipt of the invoice. Under the terms of the amendment the parties agreed that by the 5th day of each month T.O.K. would bill Parks-Davis for work performed during the previous month “in accordance with the following schedule: a. 45$ per foot for pipe removed from the ground and ready for delivery to the Houston yard, b. 13$ per foot for pipe cleaned, straightened and drifted in the Houston yard”; and that Parks-Davis would pay the invoice by the 10th day of the month of billing. However, paragraph 17 of the contract provided that until the work was 75% completed Parks-Davis would retain 10% of the amount of each invoice; that upon completion of 75% of the work Parks-Davis would release one-half of the amount theretofore retained; that thereafter Parks-Davis would retain only 5% of each invoice; and within thirty days after receipt of an affidavit from T.O.K. “that all work has been completed under the terms of this agreement” Parks-Davis would pay T.O.K. the balance of the retained funds. Also, in paragraph 18 it was “specifically provided that if in the removal, delivery and reconditioning of said pipe any damage should occur to the pipe which is caused by T.O.K.⅛ acts of negligence, then Parks-Davis shall deduct from the payments otherwise due to T.O.K. an amount equal to 58$ per lineal foot for each joint of damaged pipe.” In paragraph 13, T.O.K. assumed the “entire responsibility” for the payment of losses, expenses, damages and claims arising out of any injury or alleged injury to person or property caused by it, and it agreed to indemnify Parks-Davis and hold it harmless from any and all such losses, expenses, damages and claims. The above provisions of paragraphs 13, 17 and 18 were not changed in the amendment.

The original contract provided that T.O.K. would commence work thereunder not later than the week of November 25, 1974; and that it would complete the work not later than June 20, 1975. The amendment recited that T.O.K. and Parks-Davis mutually agreed to cease operations under the contract from April 15, 1975, through October 6, 1975; that they “have now agreed to commence again the removal and reclamation operations” set forth in the original agreement; and that Parks-Davis agreed to pay T.O.K. $4,000.00 “for the start-up costs incurred in connection with the resumption of operations.” It was provided in paragraph 4 of the amendment that T.O.K. would commence operations “as soon as possible; however, it will not do so until Gulf Refining Company has provided an inspector to be on the job site at the commencement of and during the conduct of T.O.K.’s operations.” Paragraphs 5 and 8 set forth these terms:

“5. T.O.K. agrees to remove any and all of the remaining pipe in the ground which was the subject of the original Pipeline Removal Agreement, including pipe which was skipped over and not taken up previously, except where weather conditions make the right-of-way impassable and such removal is impractical [and except pipe through the City of Lufkin which will be negotiated later by the parties].
“8. Except as amended herein, the Pipeline Removal Agreement, dated November 25, 1974, is in full force and effect, and such Agreement is hereby ratified, confirmed and approved by the parties. It is further understood and agreed that the parties have not waived and do not hereby waive any default by the oth[840]*840er party in complying with the terms of said original Agreement.”

The amendment did not set forth a new date for completion of the work under the contract.

This suit was filed by T.O.K. against Parks-Davis on April 15, 1976. T.O.K. pleaded the contract and the amendment, and alleged that until March 11,1976, it had fully performed under the contract and was prepared to continue to perform until all work was completed, but that on that day it was forced to abandon and terminate any further work under the contract because Parks-Davis had materially breached the contract by failing and refusing to pay T.O.K. $32,591.58 for work performed during December, 1975, $6,361.10 for work performed during January, 1976, $43,496.98 for work performed in February, 1976, and $6,153.76 for work performed in March, 1976. T.O.K. prayed for recovery of those amounts, totaling $88,603.42. T.O.K. also alleged that Parks-Davis had retained $33,-980.12 from past invoices, and that by reason of Parks-Davis’s breach of the contract T.O.K. was entitled to recover the retained funds, which, after demand, Parks-Davis refused to pay. Additionally, T.O.K.

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Cite This Page — Counsel Stack

Bluebook (online)
588 S.W.2d 837, 1979 Tex. App. LEXIS 4146, Counsel Stack Legal Research, https://law.counselstack.com/opinion/parks-davis-auctioneers-inc-v-tok-co-texapp-1979.