Atlas Const. Co., Inc. v. Aqua Drilling Co.

• Decision Date: 19 January 1977
• Docket Number: No. 4634,4634
• Citation: 559 P.2d 39
• Parties: ATLAS CONSTRUCTION CO., INC., Appellant (Plaintiff below), v. AQUA DRILLING COMPANY, Appellee (Defendant below).
• Court: Wyoming Supreme Court

Page 39

559 P.2d 39

ATLAS CONSTRUCTION CO., INC., Appellant (Plaintiff below), v. AQUA DRILLING COMPANY, Appellee (Defendant below).

No. 4634.

Supreme Court of Wyoming.

Jan. 19, 1977.

Edwin H. Whitehead of Urbigkit, Halle, Mackey & Whitehead, Cheyenne, for appellant.

Robert L. Duncan, Cheyenne, for appellee.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

ROSE, Justice.

FACTS

Pursuant to an oral contract between appellant-Atlas Construction Co., Inc., and appellee-Aqua Drilling Company, Aqua drilled a number of water wells for the domestic supply of houses constructed in Cheyenne by Atlas. The purchasers of five of the Atlas houses encountered problems with insufficient water production from their wells. In response to Atlas' insistence that corrective action be taken, Aqua drilled one new well and bailed sand out of the existing wells numerous times. Atlas concluded that Aqua had not taken the action necessary to correct the problem and employed a second drilling firm, Alpine, to drill new wells for the homeowners. In this action Atlas seeks reimbursement from Aqua for those sums it was forced to expend for the services of Alpine.

The trial court found generally for the appellee Aqua and we affirm.

Atlas assigns the following grounds for error:

'I

'The evidence in the cause supports the proposition that there was a contract between the parties to supply wells which would provide an adequate source of water for residential use and there was a breach of that contract.

'II

'The purchasers of the five new homes received from the vendor an implied warranty that the home was constructed in a reasonably workmanlike manner and fit for habitation.

'III

'The general law concerning drilling water wells is inapplicable in this case because of the implied warranty of habitability.

'IV

'Conclusion by district court that the wells were properly drilled was not based upon the fair preponderance of the evidence.'

The issues for our decision may be reduced to these two following inquiries:

Breach of Contract

(1) Did Aqua fail to discharge its obligation under the contract?

Breach of Warranty

(2) Does the subcontractor, Aqua, make the same warranty to Atlas as Atlas, as a general contractor, makes to its homeowner-customers?

Breach of Contract:

Atlas contends that it entered into a contract with Aqua whereby Aqua agreed that each well would be drilled to a depth and completed in a manner which would provide an adequate water supply for residential purposes. Atlas charges Aqua's obligations under the agreement were not fulfilled since it did not deliver the wells in such condition as would furnish the householders an adequate supply of domestic water.

Aqua responds to this argument by asserting that Atlas limited the maximum depth of the wells to 200 feet and, in any event, all of the wells were in fact drilled to at least that depth or as deep as was necessary to realize the desired result. Aqua further urges that all wells originally produced adequate water and the subsequent failure of the wells was due to Atlas' refusal to periodically pump and produce the wells according to Aqua's instructions.

There is evidence in the record to support these following factual conclusions:

Atlas instructed Aqua to drill no deeper than 200 feet, and in all cases adequate water was discovered and produced within the 200-feet limitation. The wells were drilled and completed in a workmanlike manner, the reason for the production failure being the neglect of Atlas to pump and produce the wells as instructed by Aqua.

On all of these factual issues there was dispute, but the oft-repeated appellate rule which must be applied in such circumstances is:

'. . . We must assume that evidence in favor of the successful party is true, leave out of consideration entirely evidence of the unsuccessful party in conflict therewith, and give to the evidence of the successful party every favorable inference which may be reasonably and fairly drawn from it. (Citing case.)' Stock v. Roebling, Wyo., 459 P.2d 780, 784. See also Tavares v. Horstman, Wyo., 542 P.2d 1275; and Keys 931(1) and 989, Appeal and Error, West's Wyoming and Pacific Digests.

The facts being in dispute, the question of breach of contract was for the trial court. There was sufficient evidence to support that court's decision that the agreement was not breached and we will not disturb that judgment here.

Breach of Warranty:

The appellant argues that the rule of Tavares v. Horstman, supra, is applicable as between Atlas and Aqua. In Tavares, the suit was between the purchaser and the builder of a new home. The builder had agreed to install a septic tank as a part of the plumbing and the system failed soon after installation. In holding the builder to have breached an implied warranty of fitness, we said:

'We further hold along with a vast majority of courts that where a vendor builds new houses for the purpose of sale, the sale carries with it an implied warranty that it is constructed in a reasonably workmanlike manner and is fit for habitation. . . .'

This is not the applicable rule as between those who contract for the drilling of a water well. The driller does not impliedly warrant that he will find and produce water when he agrees to drill a well. It is said in 17A C.J.S. Constracts § 494(2) at p. 717:

'. . . (U)nder a contract to dig, drill, or sink a 'well,' there exists no implied agreement that water shall be reached.' ¹

We have held in a water-well case (Terry v. Moore, Wyo., 448 P.2d 601 (1968)) that there can be no warranty unless there be a representation relied upon which becomes the basis for the bargain. There was no express or implied warranty of production upon the part of Aqua which induced Atlas to hire it to drill the water wells. We find no evidence in the record that Aqua made any representations whatever concerning the finding and production of water in the wells in question here.

A recent case from North Carolina is peculiarly appropriate to our consideration of the implied-warranty issue. In Lyon v. Ward, 28 N.C.App. 446, 221 S.E.2d 727 (February 4, 1976), the action was brought by the home purchaser against the buildervendor for breach of warranty of fitness. The plaintiff charged that the house was not constructed in a workmanlike manner and free from structural defects in that one of the fixtures, i. e. the water well, would not supply adequate water for necessary domestic purposes. The defendant-builder filed a third-party action against the water-well driller upon an implied warranty of fitness theory.

In holding for the homeowner in his suit against the builder, the North Carolina court quoted Tavares v. Horstman, supra, together with other recent cases considering the question, and said:

'. . . In relaxing the rule of caveat emptor, North Carolina has followed the developing trend in the United States which recognizes that there ought to be an implicit understanding of the parties when an agreed price is paid that the home is reasonably fit for the purpose for which it is to be used. Tavares v. Horstman, 542 P.2d 1275 (Wyo.Sup.Ct.1975); see also Humber v. Morton, 426 S.W.2d 554 (Tex.1968); Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966); Schipper v. Levitt & Son's Inc., 44 N.J. 70, 207 A.2d...