Birchminster Resources v. Corpus Christi Management Co., 794

• Decision Date: 12 December 1974
• Docket Number: No. 794,794
• Citation: 517 S.W.2d 608
• Parties: BIRCHMINSTER RESOURCES, Appellant, v. CORPUS CHRISTI MANAGEMENT COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 608

517 S.W.2d 608

BIRCHMINSTER RESOURCES, Appellant, v. CORPUS CHRISTI MANAGEMENT COMPANY, Appellee.

No. 794.

Court of Civil Appeals of Texas,

Tyler.

Dec. 12, 1974.

Rehearing Denied Jan. 9, 1975.

Ramey, Flock, Hutchins, Grainger & Jeffus, Sam B. Cobb, Jr., Mike A. Hatchell, Tyler, for appellant.

Sorrell, Anderson & Sorrell, William R. Anderson, Jr., Richard W. Crews, Jr., Corpus Christie, for appellee.

DUNAGAN, Chief Justice.

This is an appeal from an order sustaining appellee's plea of privilege. Appellant-plaintiff Birchminster Resources (Birchminster) sued appellee-defendant Corpus Christi Management Company (CCM) in Smith County to recover sums alleged to be due under a written contract for the drilling of an oil or gas well in Starr County. CCM filed a plea of privilege to be sued at its domicile, Nueces County. Birchminster filed a controverting affidavit pursuant to Subdivision 5, Article 1995, Vernon's Ann.Tex.Civ.St., maintaining that the suit was upon a valid contract in writing performable in Smith County. The trial court granted the plea of privilege and ordered the cause to be transferred to Nueces County. We affirm.

Prior to February 1, 1974, Charles Birch, drilling superintendent for Birchminster, discussed with Stanley Coen, a consulting engineer for CCM, the possibility of Birchminster drilling oil and gas wells for CCM on its lease premises in Starr County, Texas. Pursuant to that conversation, Birchminster's superintendent prepared a written contract and forwarded it to Coen in care of CCM. Upon receipt of the proposed written contract, Coen contacted Birch and made statements to the effect that although the terms of the contract were all right, CCM preferred using an International Association of Drilling Contractors' (IADC) standard form contract. Coen sent Birchminster a copy of an IADC contract which CCM had used on another job, marking the sample contract by crossing out and adding appropriate names and designations. The 'marked-up' copy of the IADC contract which CCM had used on another job was introduced into evidence as Plaintiff's Exhibit Number 1. Plaintiff's Exhibit No. 1 and all standard form IADC contracts have a clause, Sec. 27, which states:

'27. ACCEPTANCE OF CONTRACT:

'This instrument shall not become a binding contract until Owner has noted its acceptance and Owner shall be under no obligation to Contractor until such acceptance has been noted and a fully executed copy of this agreement sent to Contractor. Contractor will sign all copies of this instrument and return all but one signed copy to Owner.

Owner ---

By ---

'The foregoing contract is accepted by the undersigned as contractor this -- day of ---, 19--, subject to rig availability, and subject to all of its terms and provisions, with the understanding that it will not be binding upon Owner until Owner has noted its acceptance, and with further understanding that unless said contract is thus executed by Owner within -- days of the above date Contractor shall be in no manner bound by its signature thereof.

Contractor ---

By --

Title ---

Accepted this -- day of ---, 19--, which is effective date of this agreement.

Owner ---

By ---

Title ---

Birchminster secured blank copies of the IADC standard form contract which contained exactly the same provisions as Plaintiff's Exhibit No. 1, had its secretary fill out duplicate originals in accordance with Plaintiff's Exhibit No. 1, and sent two copies to CCM. The purported duplicate original contracts were received by CCM, but were never signed by the company. In its petition, Birchminster did not allege that CCM had executed the contract.

Although the facts are somewhat unclear, the testimony reveals that Birchminster moved its rig onto the well-site and commenced drilling on about February 1, which was either about the same time or about four or five days before Birchminster mailed the duplicate original contracts. On or about February 13, 1974, during the course of drilling operations, a blow-out occurred. Shortly thereafter, CCM ordered Birchminster to remove its rig from the location. Thus, Birchminster had performed various drilling operations for about thirteen days. Although there is some dispute between the parties, the testimony reveals that between five to ten days of work had been completed before CCM received the duplicate original contracts and that the work continued from three to eight days after CCM had the duplicate original contracts in its possession. Testimony shows that CCM had a mud logger and consulting engineers present during the drilling operations and that Coen might have been present.

In response to appellant's request, the trial court made the following pertinent findings of fact:

A. Prior to commencement of drilling operations on the oil well in question, Birchminster's drilling superintendent and Coen entered into negotiations in contemplation of Birchminster drilling a well for CCM.

B. The oral negotiations led to a preparation of a form of written contract by Birchminster which was forwarded to Coen in care of CCM.

C. Coen contacted Birchminster's drilling superintendent and informed him that an alternative form of written contract would be required.

D. The alternative form of written contract, which was forwarded by Coen to Birchminster, was a 'marked-up' copy of another drilling contract and is in evidence as Plaintiff's Exhibit Number 1.

E. Birchminster prepared and executed a written contract in the form submitted by Coen and sent it to CCM for execution.

F. The form of contract prepared and executed by Birchminster was in the terms and form suggested by Coen .

G. Birchminster moved onto the well site and commenced drilling operations after the terms of the contract had been agreed upon, but before it was executed by CCM, as was required by Sec. 27 of Plaintiff's Exhibit No. 1.

H. CCM never executed the written contract.

As a conclusion of law, the trial court stated that 'Contracting parties, if they so desire, have a right to contract that a written instrument shall not become a binding contract until both parties, or one party, has signed or noted his acceptance thereto.' The trial court concluded, as a matter of law, that Plaintiff's Exhibit No. 1 failed to satisfy the venue requirements of Subdivision 5, Article 1995, V.A.T.S.

The general rule of venue is that a defendant must be sued in the county of his domicile. In order to defeat defendant's plea of privilege to be sued in the domiciliary county, the burden is on the plaintiff to allege and prove by a preponderance of the evidence that the case comes within some well-defined statutory exception to Article 1995, V.A.T.S., before one may be deprived of the right to defend a suit against him in the county of his residence. Compton v . Elliott, 126 Tex. 232, 88 S.W.2d 91 (Tex.Comm. of App., 1935, holding approved); Berry v. Pierce Petroleum Corporation, 120 Tex. 452, 39 S.W.2d 824 (Tex.Comm. of App., 1931, holding approved); Admiral Motor Hotel of Texas, Inc. v. Community Inns of America, Inc ., 389 S.W.2d 694 (Tex.Civ.App., Tyler, 1965, n.w.h.).

The venue facts under Article 1995, Subdivision 5, that are at issue in the present case require: (1) that the claim is based on a written contract, and (2) that the contract was entered into by the defendant or by one authorized to bind him, or was assumed or ratified by him. McDonald Civil Practice Sec. 4.11.1, p. 444.

Appellant contends that Sec. 27 was not a condition precedent to the written contract. Where parties to a written contract intend that it shall not be binding until it is signed by the parties, the signatures of both parties are required to give effect to the contract. Simmons and Simmons Construction Co. v. Rea, 155 Tex. 353, 286 S.W.2d 415, 418, 419 (1956); Ives v. Urban, 385 S.W.2d 608 (Tex.Civ.App., Corpus Christi, 1964, writ ref'd., n.r.e.).

Where the trial court makes and files findings of fact, which have support in the evidence, such findings are binding on the reviewing court, and, in...