CENTRAL MANUFACTURERS'MUT. INS. CO. v. Elliott, 3922.

• Decision Date: 07 November 1949
• Docket Number: No. 3922.,3922.
• Parties: CENTRAL MANUFACTURERS' MUT. INS. CO. v. ELLIOTT et al.
• Court: U.S. Court of Appeals — Tenth Circuit

177 F.2d 1011 (1949)

CENTRAL MANUFACTURERS' MUT. INS. CO. v. ELLIOTT et al.

No. 3922.

United States Court of Appeals Tenth Circuit.

November 7, 1949.

F. A. Rittenhouse, Oklahoma City, Okl. (John F. Webster, Walter D. Hanson, and Olive R. Rittenhouse, Oklahoma City, Okl., on the brief), for appellant.

C. L. McArthur, Ada, Okl. (Hobert G. Orton, Ada, Okl., on the brief), for appellee.

Before PHILLIPS, Chief Judge, and BRATTON and HUXMAN, Circuit Judges.

HUXMAN, Circuit Judge.

Lee Elliott and J. C. Shortes, Sr. instituted this action against the Central Manufacturers' Mutual Insurance Company in the District Court of Pontotoc County, Oklahoma, to recover a sum alleged to be due under an insurance policy insuring certain pulling units.¹ Jurisdictional factors being present, the action was removed to the United States District Court for the Eastern District of Oklahoma. Trial was had to the court, judgment was entered for plaintiffs, and the company has appealed.

The insurance policy insured the pulling units in question against loss by fire to the extent of $7500.00. The policy excepted from coverage "loss or damage to property caused by or incidental to blowout or cratering of any oil or gas well or any fire loss or damage resulting therefrom."

On December 10, 1947, one of the insured units, a Wichtex Pulling Unit, mounted on a truck, together with oil well servicing equipment, and other insured property, was destroyed by fire while being used as a part of a drilling rig in Garvin County, Oklahoma. Liability for loss being denied, this action was filed and tried with the above result.

Appellant's defense was that the fire was a result of a blow-out and that therefore the resulting loss was excluded from coverage under the above-quoted exclusion clause.

The facts concerning which there is no dispute are these. On December 8, when the well had been drilled to a depth of approximately 1250 feet, gas and water began issuing from the well. On December 9, heavy mud was used to stop the flow of gas. On the morning of December 10, the gas and water began flowing again. In the afternoon, when a nearby motor was started to pick up the pipe which was to be placed on the rig floor, an explosion causing the fire and the loss.

Aside from a preliminary question relating to the striking of paragraph nine from the answer and the exclusion of some proffered evidence by appellant, the sole question is whether the trial court's finding that the explosion and loss were not the result of a "blow-out", as that term is used in such cases, is supported by the record.

The question relating to the striking of paragraph nine of the answer and that relating to the excluded evidence raises substantially the same issue. Paragraph nine of the answer, in substance, alleged that the rules and regulations of the Corporation Commission of the State of Oklahoma required the use of Blow-Out Preventers and Casingheads in proven areas; and a master-gate, or its equivalent, an adequate blow-out preventer, together with a flow line valve of the proper size and working pressure, in unproven areas; and that such rules and regulations had not been complied with in this instance. This paragraph was stricken and the company's offer to prove the rules and regulations, as pled, was overruled.

The court did not err in striking the paragraph and in refusing to receive the proffered evidence. The only purpose thereof was to prove negligence on the part of the insured in the operation of the insured equipment. Assuming, without deciding, that insured were negligent in...