Arvin-Kern Co. v. B. J. Service, Inc.

• Decision Date: 10 March 1960
• Docket Number: ARVIN-KERN
• Citation: 3 Cal.Rptr. 238,178 Cal.App.2d 783
• Court: California Court of Appeals Court of Appeals
• Parties: COMPANY, a limited partnership, Plaintiff and Respondent, v. B. J. SERVICE, INC., a corporation, Defendant and Appellant. Civ. 6037.

Page 238

3 Cal.Rptr. 238

178 Cal.App.2d 783

ARVIN-KERN COMPANY, a limited partnership, Plaintiff and Respondent, v. B. J. SERVICE, INC., a corporation, Defendant and Appellant.

Civ. 6037.

District Court of Appeal, Fourth District, California.

March 10, 1960.

Hearing Denied May 4, 1960.

Reed, Callaway, Kirtland & Packard, Hulen C. Callaway and Abe Mutchnik, Los Angeles, for appellant.

Young, Wooldridge & Paulden, Bakersfield, and William F. Peters, Los Angeles, for respondent.

COUGHLIN, Justice.

This is an action to recover damages resulting from the use of a defective piece of equipment furnished to the plaintiff partnership by the defendant corporation.

Plaintiff was engaged in causing oil and gas wells to be drilled upon land in the County of Kern; had employed drilling contractors to do the actual drilling; and, through its consultant engineer, contracted with the defendant to cement a 'liner' in place. In the course of this cement work, a tool furnished by the defendant and lowered into the oil well by the drilling crew came apart and plugged up the hole. As a result, additional drilling work was done which cost the plaintiff $68,564.11. The trial court rendered judgment in favor of the plaintiff and against the defendant in this amount. From this judgment the defendant appeals.

The defendant's contentions on appeal may be resolved by a determination of the questions whether there is substantial evidence to support the findings, and whether the findings, because of an alleged inconsistency, fail to support the conclusions of law and judgment.

At the outset 'it must be borne in mind that, in examining the sufficiency of the evidence to support a questioned finding, an appellate court must accept as true all evidence tending to establish the correctness of the finding as made, taking into account, as well, all inferences which might reasonably have been thought by the trial court to lead to the same conclusion.' Bancroft-Whitney Co. v. McHugh, 166 Cal. 140, 142, 134 P. 1157, 1158; Thomas v. Hunt Mfg. Corp., 42 Cal.2d 734, 736, 269 P.2d 12. 'It is also to be noted that while full findings are required upon all material issues a judgment will not be set aside on appeal because of a failure to make an express finding upon an issue if a finding thereon, consistent with the judgment, results by necessary implication from the express findings which are made.' Richter v. Walker, 36 Cal.2d 634, 226 P.2d 593, 596.

Plaintiff's consultant engineer awarded the cementing job to the defendant upon condition that the latter would funish a cementing tool essential to the application of the cement. The tool in question is known as a 'swab assembly'. It is attached to a piece of drilling equipment; placed inside of a 'liner'; and lowered into the hole. The 'liner' is perforated, permitting the cement to flow through onto the outside, holding and sealing the 'liner' in place. This operation is accomplished by delivering cement under pressure through a pipe to a designated place in the 'liner' beyond the 'swab assembly' which prevents the cement from backing up into the casing and forces it outside of the 'liner'. The 'swab assembly' consists of a 'mandril', or pipe, portions of which are threaded, with 'down swab rubbers' assembled thereon and held in place tightly by the use of 'stop' and 'lock' rings, together with a 'collar', or coupling, screwed on to the end of the 'mandril' to which the drilling equipment is to be attached. This tool, as described, was assembled by a representative of the defendant and delivered to the well site. Subsequently it was attached to a piece of drilling equipment known as a 'stinger' which was a 20 foot length of 2 inch pipe. This connection was effected by screwing a 'swedge', or a 'cross-over nipple', onto the connecting 'collar', or coupling, on the 'swab assembly'. The 'swedge' was used as a reducer; the 'collar' on the 'swab assembly' being larger than the 2 inch pipe. In turn the 'swedge' and the 'stinger' were attached by another coupling. Both the 'swedge' and the coupling attaching it to the 'stinger' were obtained from another representative of the defendant at the well site when the drilling equipment was being attached to the 'swab assembly'.

In due course, the foregoing equipment was lowered into the hole and the cementing operations commenced. The cement was forced under pressure down through the pipe in question. Upon completion of this operation, and after the cement had set, the equipment was raised. However, all of the 'swab assembly' with the exception of the 'collar' remained in the well; the 'mandril' had become detached from the 'collar'.

An inspection of the 'collar' revealed the presence of white lead indicating either, that it had not been screwed on tightly to the 'mandril' or that the threads on the 'collar' and the threads on the 'mandril' were mismated. Where the threads on the inside of a 'collar', or coupling, match the threads on the outside of the nipple end of a 'mandril', or pipe, and they are screwed together tightly the white lead 'squashes out', so that when they are unscrewed the lead is not present. If they are not screwed tightly, the lead remains. The lead also remains in those instances where the threads are mismated, although a 'friction bind' occurs giving the impression of a firm contact.

A representative of the defendant who assembled and delivered the cementing tool testified that he merely hand set the 'collar', i.e., did not set it tightly, although all of the other connections were tightened by the use of a vise and wrench. On the other hand, when the drilling crew attached the 'swedge' to the 'swab assembly', the 'collar' was held by a 'back-up wrench' while the 'swedge' was screwed onto it, and no one observed that the 'collar' was not screwed hightly onto the 'mandril'.

When the 'swab assembly' was delivered to the well site by the man who had assembled it, he told one of the drillers that he had checked it in his vise; that it was tight; and was ready to run. Later, the consultant engineer asked another representative of the defendant, the cementer in charge of the cementing crew, if the cementing tool was made up all right and if all of the threads fit. This was an extra precaution, as a double check. The cementer replied: 'Yes, she is OK, I put it in the vise and put a forty-six or fortyeight * * * , and jumped on it and she held.'

The first cause of action in plaintiff's complaint sounds in contract. In conformance therewith the trial court found that defendant had agreed to cement a 'liner' in place in plaintiff's oil well; to furnish the cementing tool, i. e., the 'swab assembly', necessary to do the job; that defendant assembled and furnished such a tool; that the tool so furnished was used for the purpose intended; that the 'mandril' of the cementing tool was insecurely affixed to one of the connections which was a part of the tool, came apart from that connection and remained in the well; and that as a result the plaintiff expended $68,564.11 in clearing the 'mandril' from the well.

Under the custom of the oil drilling trade, an agreement to furnish a special tool implies the further agreement that the tool so furnished shall be delivered in a serviceable and useable condition; that the drilling crew will not tamper with or dismantle such a tool; and that the obligation of determining whether the parts of such tool are securely affixed to each other is upon the supplier. The existence of this custom is established by substantial evidence and, although there is evidence in the record which would support a contrary conclusion, under the general rule it is our obligation to accept that evidence which supports the judgment. As a consequence, implied in the findings of the trial court is the agreement upon the part of the defendant to deliver the cementing tool in serviceable and useable condition, with all of the parts thereof securely affixed to the 'mandril'.

'It is the general rule that when there is a known usage of the trade persons carrying on that trade are deemed to have contracted in reference to the usage unless the contrary appears; that the usage forms a part of the contract * * *.' Hind v. Oriental Products Co., Inc., 195 Cal. 655, 667, 235 P. 438, 443.

This rule frequently has been applied. California Lettuce Growers v. Union Sugar Co., 45 Cal.2d 474, 482, 289 P.2d 785, 49 A.L.R. 2d 496; Isenberg v. California Emp. Stab. Comm., 30 Cal.2d 34, 37, 180 P.2d 11; Buckner v. A. Leon & Co., 204 Cal. 225, 227, 267 P. 693; Store of Happiness v. Carmona & Allen, 152 Cal.App.2d 266, 271, 312 P.2d 1104; Correa V. Quality Motors Co., 118 Cal.App.2d 246, 251, 257 P.2d 738; Guipre v. Kurt Hitke & Co., 109 Cal.App.2d 7, 14, 240 P.2d 312; Watson Land Co. v. Rio Grande Oil Co., 61 Cal.App.2d 269, 272, 142 P.2d 950.

Moreover, under the general rule applied to bailments, a depositor is liable to the depositary 'for all damages caused to him by the defects or vices of the thing deposited.' Sec. 1833, Civ.Code; Fisher v. Pennington, 116 Cal.App. 248, 250, 2 P.2d 518.

The defendant contends that there is no evidence supporting a conclusion that it was obligated to do anything more than to furnish a 'mandril'; that the 'collar' on the nipple end of the 'mandril' was not a part of the tool it agreed to furnish; and that it was not required to attach the 'collar' tightly to the 'mandril'. The foregoing evidenctiary supported findings foreclose this contention. For purposes of its own choosing, defendant describes the obligation imposed upon it by the agreement in question in terms of service, i. e., its duty to assemble the cementing tool and tightly attach the parts thereof together, whereas its obligation was to furnish a tool in a useable and serviceable condition. The plaintiff did not request the defendant to assemble a cementing tool; it requested the defendant to furnish such a tool. Consequently, it was not...