Anchor Casualty Co. v. McCaleb
| Decision Date | 27 January 1950 |
| Docket Number | No. 12726.,12726. |
| Citation | 178 F.2d 322 |
| Parties | ANCHOR CASUALTY CO. v. McCALEB, et al. |
| Court | U.S. Court of Appeals — Fifth Circuit |
A. D. Dyess, Houston, Texas, for appellant.
William C. Perry, Jr., Jack Binion, Harold A. Crawford, B. B. Patterson, Houston, Texas, for appellees.
Before HOLMES, McCORD, and WALLER, Circuit Judges.
This action was instituted as a suit for a declaratory judgment pursuant to Section 274(d) of the Judicial Code, now Title 28 U.S.C.A., §§ 2201 and 2202, to secure a construction of certain portions of a liability policy issued by appellant to the appellees. The claims are for property damages caused by an oil-well explosion. Appellant is a corporation, duly organized under the laws of Minnesota, and has a permit to do business in Texas. The appellees are citizens of Texas; there is complete diversity of citizenship between the parties; and the amount involved is in excess of $3000, exclusive of interest and costs.
The material facts, which were submitted to the court without a jury, may be briefly stated as follows: On July 5, 1947, Nichols McCaleb, H. A. Potter, Sr., and M. G. Hansbro, became associated as joint venturers in a mining partnership formed for the purpose of drilling for oil under a lease jointly owned by them. Potter and Hansbro agreed to advance the money necessary to meet the drilling expenses, and McCaleb agreed to take charge of the actual drilling operations. All parties were to consult on such matters as determining the sand in which completion would be sought, the point at which to perforate, and questions of like importance. In furtherance of the enterprise, H. A. Potter, Jr., was appointed trustee to hold legal title to the lease, and was authorized to countersign checks drawn by McCaleb on the joint account. At the request of Potter, Sr., and on behalf of the three joint venturers, H. A. Potter, Jr., secured the issuance of the policy in controversy through appellant's authorized agent. Potter, Jr., disclosed to the agent all of the material facts with reference to the partnership and the joint venture with reference to the drilling of this well. After being fully advised of all the facts, said agent decided that the policy should be issued in McCaleb's name, because the permit to drill, which was issued by the Texas Railroad Commission, was in his name. The premiums on the policy were paid by Hansbro and H. A. Potter, Sr.
On March 17, 1948, while this policy was in full force and effect, and while the named insureds were attempting to accomplish their purpose, the oil well blew in with a tremendous gas pressure. It was a wild well for a period of approximately fifty hours before it was brought under control. During the time the well was out of control, considerable quantities of oil and gas distillate, sand, and mud, were blown into the air and carried by the wind onto the properties of landowners and tenants in the immediate area, resulting in claims by them for damages done to their property. At the time this action for a declaratory judgment was brought in the district court, four claims aggregating more than $35,000 had been filed in the state court against McCaleb, Potter, Sr., and Hansbro.
The appellant contends that, since the policy of insurance was issued to Nichols McCaleb in his individual capacity, and since the blowout occurred as a result of an operation by the partnership, neither McCaleb nor the partnership was protected by the policy. It further contends that all losses and damages were incidental to the blowout, and constituted but one accident, whereby its liability, if any, is limited to $5000 under coverage "B" of the policy. Appellees contend that when oil, sand, and mud, were blown onto the properties of various owners, additional accidents resulted to the property of each of them; that it was the intention of the parties, when the policy was issued, to cover all of the appellees; and that, if it did not, then it was issued in the name of Nichols McCaleb only because of a...
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... ... Insurance Company, A Rhode Island Corporation; Continental ... Casualty Company, An Illinois Corporation; First State ... Insurance Company, A Delaware Corporation, ... See, e.g., Anchor ... Casualty Co. v. McCaleb, 178 F.2d 322 (5th Cir.1949) (imposing coverage for damage to ... ...
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