Williston Oil & Gas Co. v. Phoenix Insurance Co., 6127.

• Decision Date: 02 November 1959
• Docket Number: No. 6127.,6127.
• Citation: 271 F.2d 745
• Parties: WILLISTON OIL & GAS COMPANY, a corporation; and Petroleum Operators Corporation, a corporation, Appellants, v. PHOENIX INSURANCE COMPANY, a corporation; and Manufacturers Casualty Insurance Company, a corporation, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

271 F.2d 745 (1959)

WILLISTON OIL & GAS COMPANY, a corporation; and Petroleum Operators Corporation, a corporation, Appellants, v. PHOENIX INSURANCE COMPANY, a corporation; and Manufacturers Casualty Insurance Company, a corporation, Appellees.

No. 6127.

United States Court of Appeals Tenth Circuit.

November 2, 1959.

Peter H. Holme, Jr., Denver, Colo. (Richard P. Matsch, and Holme, Roberts, More & Owen, Denver, Colo., were with him on the brief), for appellants.

Edward E. Murane, Casper, Wyo. (Murane, Bostwick & McDaniel, Casper, Wyo., were with him on the brief), for appellees.

Before BRATTON, LEWIS and BREITENSTEIN, Circuit Judges.

BREITENSTEIN, Circuit Judge.

The issue for determination is the liability of appellants Williston Oil & Gas Company and Petroleum Operators Corporation¹ for damage by fire to a truck owned by Daniel Marken, doing business as Marken Drilling Company,² and covered by insurance written by the appellees. In a Wyoming state court suit Marken recovered judgment against the insurance companies in the amount of $6,710. They, as subrogees of Marken, then brought this action.

Williston and Petroleum were co-owners of oil producing properties in Park County, Wyoming. Two wells thereon required reconditioning. Williston contracted with Marken to do such work on well No. 3 and with Big Horn Well Servicing Company³ as to well No. 4. Each well was connected by a pipeline with the same battery of storage tanks. Well No. 3, well No. 4, and the storage tanks were each located on different forty-acre tracts.

In the early morning of December 5, 1953, at the request of Claygore, an employee of Petroleum, a truck owned by Marken was driven by McCrady, an employee of Marken, from the site of well No. 3 to the location of well No. 4 and there loaded with a pump. McCrady then drove the truck carrying the pump to the tank battery and left it with the pump loaded thereon at a point where, on December 7, it was severely damaged by fire of unexplained origin so far as the record discloses. At the time of the fire no Marken workmen were at the scene. The identity of those who were present is not shown by the record.

The insurance companies assert the right to recover from Williston and Petroleum under a written contract between Marken and Williston. By this contract Marken undertook "certain work over operations" on well No. 3. The forty-acre tract on which well No. 3 was located was specifically described. Marken agreed to furnish equipment, which, as listed, did not include a truck. Paragraph 3 l of the contract read thus:

"Owner (Williston) shall be responsible for loss of or damage to the hole and Contractor\'s (Marken\'s) equipment while contractor is being paid on a diem basis."

Williston and Petroleum object to the trial court's finding of fact that they "were engaged in a joint operation in cleaning out and making repairs to" the wells in question. The trial court said that such finding was based upon admissions in the answer of Williston and Petroleum. The insurance companies concede that no such admissions were made but say that the finding is sustained by the evidence.

While admittedly Williston and Petroleum were co-owners, a co-ownership is insufficient to establish a mining partnership or a joint venture. There must be cooperation in the project.⁴ To establish such cooperation, reliance is placed on the activities of Claygore, the Petroleum employee, who requested McCrady to use the Marken truck to move the pump from the No. 4 well to the tank battery.

Lundberg, the chief petroleum engineer of Williston and the individual in responsible control of operations at the wells for that company, testified that Claygore was an officer of Petroleum but the nature of that office, the extent of authority, and the type of duties are not disclosed by the evidence. Claygore did not testify. The trial court made no findings as to the position of Claygore. Marken was not acquainted with Claygore. McCrady said that at the beginning of the operations at well No. 3 Claygore gave instructions as to where the rig and other equipment were to be placed. Lundberg testified that "Mr. Claygore had no authority over the operations of either the drilling equipment or the work over rig." While Lundberg approved a Big Horn invoice containing items for December 6 and 7 relative to the removal of the mud from the No. 4 well, this does not establish any authority in Claygore to act for Williston. The removal of the mud from well No. 4 was a part of the Big Horn job.

The evidence is insufficient to sustain a finding that Claygore had any authority to speak or act for Williston or to join Petroleum either as a participant in the reconditioning operations or as a party to the Marken and Big Horn contracts. There is no evidence that Petroleum was paying any part of the expense under either the Marken or Big Horn contract. The benefit which Petroleum might have...