Tampico Oil & Gas Co. v. C'S Lease Service

398 S.W.2d 368, 24 Oil & Gas Rep. 83, 1966 Tex. App. LEXIS 2668
CourtCourt of Appeals of Texas
DecidedJanuary 12, 1966
DocketNo. 11352
StatusPublished

This text of 398 S.W.2d 368 (Tampico Oil & Gas Co. v. C'S Lease Service) 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
Tampico Oil & Gas Co. v. C'S Lease Service, 398 S.W.2d 368, 24 Oil & Gas Rep. 83, 1966 Tex. App. LEXIS 2668 (Tex. Ct. App. 1966).

Opinion

HUGHES, Justice.

C’s Lease Service, appellee, is a partnership composed of W. A. Seay, Jr. and G. B. and R. R. Seay, and is engaged in the business of servicing oil wells in Caldwell County. In the fall of 1963 appellant, Tam-[369]*369pico Oil and Gas Company, and appellee entered into an oral agreement by which ap-pellee was to service two oil wells owned by appellant on its Bronson-Francis-Slater Unit Lease in Luling, Caldwell County, Texas, for $75.00 per month. Appellee sued appellant alleging default in payments due under this contract as well as default in the payment for extra services performed by appellee at the request of appellant. The total amount sued for was $1,489.45, plus interest and attorney’s fees. Appellant answered and admitted the justness of the claim except for $442.74, as to which it denied liability. Appellant also filed a cross action for damages. The trial court, a jury being waived, denied any recovery on the cross action and rendered judgment for appellee for $1,091.34, interest, and attorney’s fees of $250.00.

' Neither party complains of the judgment rendered, except that appellant asserts error in not granting it recovery on its cross action, the partial effect of which would be to wipe out appellee’s judgment.

The trial court has made these pertinent findings of fact:

“(1) That in late August or early September of 1963 the Plaintiff and Defendant entered into an agreement under the terms of which Plaintiffs would furnish a pumper whose duties were to gauge daily Defendant’s storage tanks on its Bronson-Francis-Slater Lease in Luling, Caldwell County, Texas, and who was also to check Defendant’s two wells on such lease daily to see that they were operating properly; (2) That under the terms of said agreement Plaintiffs were to make repairs of a minor nature to said wells and to notify Defendant when major repair work was necessary; (3) That under the terms of said agreement Plaintiffs were to notify the McWood Corporation, the purchaser of the crude oil produced from said lease, as to when the tank batteries were full; (4) That some of the customary duties of a pumper in the oil and gas industry are to: (a) gauge storage tanks daily; (b) maintain accurate daily gauge reports ; (c) make minor mechanical repairs on lease equipment; (d) notify lease operator when major repairs are necessary; (e) notify crude oil purchaser or lease operator when storage tanks are full so that crude oil can be transported from lease by purchaser; (5) That URBAN SEAY was and has been at all times pertinent hereto an employee of Plaintiffs and the pumper who was furnished by Plaintiffs to service and Defendant’s Bronson-Francis-Slater Lease wells and tank batteries; (6) That the McWood Corporation agreed to purchase all the oil produced from said lease; (7) That Plaintiffs’ pumper, URBAN SEAY, or any other representative of Plaintiffs failed to be present each time when McWood Corporation would run the crude oil from said lease; (8) That URBAN SEAY nor any other employee of Plaintiffs gauged the storage tanks on such lease a number of days during the time the Plaintiffs serviced Defendant’s lease; (9) That such wells on said lease did not produce for a number of days in addition to the days they were shut-in due to repairs during the time the Plaintiffs serviced such lease; (10) That said wells on said lease were shut-in for repairs about 19 days during the time the Plaintiffs serviced such lease.
⅝ ⅝ ⅝ ⅜ ⅝ ⅝
That no act of Plaintiffs caused or contributed to the loss or reduction of oil production from Defendant’s oil wells situated on the Bronson-Francis-Slater lease at Luling, Caldwell County, Texas.
⅝ ⅝ ⅜ ⅝ ⅝ ⅝
That from August 1963 through April 1964 the Defendant’s wells were not consistently producing full allowable and such facts were known to Defendants; that the Defendant did not pro[370]*370test or indicate to Plaintiffs that the ' Plaintiffs’ charges made to the Defendants from August 1963 to April 1964 were unsatisfactory.”

The court further found that during the time appellee serviced the wells of appellant they produced 1819 barrels less than their allowable and the value of such oil not produced was $4,802.16.

Under these findings, and the undisputed evidence, it is the contention of appellant that appellee is shown to have breached its contract and that it is entitled to its damages. As to damages, there is evidence from which the trial court could have found that the two wells, if properly managed, could have produced their allow-ables except on days when they were shut in for repairs.

Appellant has ten points of error but we do not discuss them for the reason that it is our opinion that, under the facts and applicable law, appellant has waived its right to recover damages for appellee’s failure to fully perform its contract to service these wells.

Mr. R. R. Seay testified:
“Q Now, Mr. Seay, why did you stop working for Tampico?
A We did not receive payment as we should. We had paid, the majority of our hourly rate is for labor furnished and we felt it necessary to either receive payment or stop the services.
Q Did you send or did your office send Tampico statements each month for services you had performed?
A Yes sir.
Q Were those statements ever questioned ?
A No sir, not until we asked to receive payment on said balance.
Q Do you know about how long it was since they had paid when it was questioned?
A Two or three months, approximately before we received partial payment of about $500.00. Their balance was more then than what it is now and we received approximately a five hundred payment, I would say, two or three months before we stopped services.”

Appellant admitted that it had not paid appellee the $75.00 monthly payment for pumping these wells for the months of 9-15-63 through 4-15-64. In addition, it admitted it had not paid appellee other charges claimed owing by appellee.

Mr. C. Anthony Buckley, president of appellant corporation, testified:

“Q Mr. Buckley, I believe you testified that there were some 56 days of no production ?
A Yes, sir, * * *.
Q What did you testify as the basis on which you arrived at that conclusion? How did you determine the number of days that there was no production ?
A By checking the gauge reports.
Q Whose gauge reports?
A Gauge reports prepared by Urban Seay and the other people, I don’t know who they were.
* * * * *
Q You testified that you knew these two wells were capable of producing their allowable during all that time?
A Yes sir.
Q How do you know that?
A By the production.
Q By what ?
A By the production.
Q How many times were you on the lease?

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398 S.W.2d 368, 24 Oil & Gas Rep. 83, 1966 Tex. App. LEXIS 2668, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tampico-oil-gas-co-v-cs-lease-service-texapp-1966.