Ryan v. Schwab

261 S.W.2d 605, 3 Oil & Gas Rep. 220, 1953 Tex. App. LEXIS 2007
CourtCourt of Appeals of Texas
DecidedOctober 9, 1953
Docket15421
StatusPublished
Cited by2 cases

This text of 261 S.W.2d 605 (Ryan v. Schwab) 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
Ryan v. Schwab, 261 S.W.2d 605, 3 Oil & Gas Rep. 220, 1953 Tex. App. LEXIS 2007 (Tex. Ct. App. 1953).

Opinion

RENFRO, Justice.

The appellant Ryan brought suit against Dick Schwab and five associates for money due under a written contract for the drilling of a wildcat oil well and for the value of drill stem pipe cemented in the hole by order of appellees to seal off salt water flow.

Under written contract, Ryan was to drill to a depth of 5,500 feet at the rate of $3 per lineal foot. The appellees had the right to require appellant to drill to 8,000 feet. The basis of pay, after 5,500 feet, was to be at the rate of $550 per day.

No production was found at 5,500 feet and the appellees directed appellant to continue drilling. After a depth of 6,000 feet had been reached, appellees sent one Carlton to the well to act as their representative.

While drilling at 7,735 feet, hot salt water was encountered. Appellant’s driller was using, at the time, a mixed string of drill pipe consisting of 4½ inch pipe on the bottom and 3½ inch at the top. The hot salt water forced the drilling mud out of the well, and as more mud was pumped in the hot salt water continued to force it out. Appellant’s driller tried to close the blowout preventer but was unable to do so because the 4½ inch rams in the preventer would not fit around the 3½ inch drill pipe.

Carlton ordered that the drill pipe be turned loose and the master gate closed over it. This was done and the pipe was for all practicable purposes lost. It is conceded by both sides that the expense of recovering the pipe, if recovery is possible, would exceed its value.

The parties stipulated the amount due appellant for drilling operations and that part of the judgment is not challenged. The appellant Ryan has appealed from that part *607 of the judgment denying him recovery of the value of the drill pipe.

The jury found, in answer to the first four issues, that Carlton, acting in the scope of his employment, ordered the day driller to set the drill stem in the hole and close the master valve, and the appellant’s driller did so shut down the well because ordered to do so by Carlton. In answer to issue No. 5, however, the jury found that the method used in shutting off the well was the method that would be used by a person of ordinary prudence in the exercise of ordinary care under the same or similar circumstances.

The jury found that Carlton knew, in time to have enabled him to order a 3½ inch blowout preventer installed, that appellant was not using such preventer.

In further answer to further issues the jury found that there was not a blowout at 7,735 feet; that appellees knew before trouble was encountered that appellant did not have blowout insurance, but allowed the appellant to continue drilling.

Under the terms of the contract, appellant was required to furnish a Cameron blowout and the various size rams for the blowout preventers and all other materials and things necessary to complete the well, including labor and water, and to carry blowout insurance.

Appellant moved for judgment on the verdict. Judgment was entered for appel-lees on the verdict.

The appellant alleges error of the court in refusing to allow him judgment for the drill pipe, which the jury found to be $11,-426.90, and alleges the court erred in construing the contract to provide that Ryan, as drilling contractor, must bear all or any loss of equipment, including drill pipe, used in drilling operations under circumstances where such loss was occasioned by the deliberate design and act of appellees’ agent in ordering destruction of the drill pipe as an expedient to minimize appellees’ cost in conducting drilling operations, after a flow of salt water had been encountered and at a time when appellees were in complete and exclusive control of the drilling rig and its-equipment and personnel.

It is appellant’s contention that after the appellees’ agent assumed control and operation of the well, that, whether specified or not in the contract, the law implied that the bailee, appellees herein, should return the bailed equipment. He argues that it was not necessary to show negligence on the part of the bailee for the reason that the act of cementing the pipe stem in the ground was a considered and deliberate undertaking for the sole purpose of minimizing ap-pellees’ own expenditures, as well as to limit their potential third party damages. He argues that the appellees, having refused to return the pipe, or to pay the appellant the value thereof, their liability, in law, to do so is absolute. He contends further that Carlton agreed in writing to be responsible for the drill pipe in consideration for appellant’s permitting further use of the rig.

The writing by Carlton referred to in the preceding paragraph was dated July 30, 1948, and reads as follows: “I, Earl Carlton (Dick Schwab rep) give orders to rig up to try kill well pumping cement thru drill pipe 3½" will be responsible for any damage done to any equipment belonging to S. J. Ryan, Contractor.” The drill pipe had become stuck or lost on July 22nd. Appellant’s rig had been released on July 24th. .The well had been abandoned on July 28th. Carlton testified that upon discovering the well was not yet dead the appellant was ordered to rig the equipment for further efforts to kill the well, and that he gave the above memorandum because Ryan mentioned that the boilers or something might be blown up; that drill pipe was not discussed. Appellant’s brother testified that the memorandum was intended to guarantee payment of the drill pipe. The appellant requested an issue, which the court refused to submit, inquiring if the appellees,, by the memorandum, intended to obligate themselves for the loss of the drill pipe. No point of error is based on the refusal of the court to submit such issue.

*608 The appellant cannot rely upon any written promise by appellees to insure against loss of the pipe, other than the Carlton memorandum, for the only provision in the written contract pertaining to loss reads as follows: “Contractor agrees to hold Owners harmless from any and all claims, expense, loss and damage arising from any cause whatsoever in connection with the work to be performed under this contract, regardless of whether such work be performed by Contractor, or employees of Contractor, or by sub-contractor or by all.” We do not find any provision in the contract imposing any liability upon appellees for loss or damage.

The Carlton memorandum, in our opinion, obviously refers to any damage that might be sustained in further efforts to kill the well, and does not refer to any previous loss or damage.

In the absence of a jury finding to the contrary, we hold that the memorandum did not refer to. the drill pipe, and therefore cannot agree with appellant that Carlton agreed to pay for same.

The evidence does not support appellant’s contention that the drill pipe was destroyed by the deliberate design of ap-pellees as an expedient to minimize their own loss in conducting drilling operations. It is true the jury found the well did not blow out. It is true also that the jury found that appellees’ agent was not negligent in doing what he did. Appellant’s driller testified in substance that what was done was the only thing to be done to stop the flow of hot salt water.

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Bluebook (online)
261 S.W.2d 605, 3 Oil & Gas Rep. 220, 1953 Tex. App. LEXIS 2007, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ryan-v-schwab-texapp-1953.