Cities Service Oil Co. v. Harvey

• Decision Date: 25 April 1945
• Docket Number: No. 3045.,3045.
• Citation: 148 F.2d 780
• Parties: CITIES SERVICE OIL CO. et al. v. HARVEY et al.
• Court: U.S. Court of Appeals — Tenth Circuit

148 F.2d 780 (1945)

CITIES SERVICE OIL CO. et al. v. HARVEY et al.

No. 3045.

Circuit Court of Appeals, Tenth Circuit.

March 26, 1945.

Rehearing Denied April 25, 1945.

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

Duke Duvall and John F. Butler, both of Oklahoma City, Okl., for appellees.

Before PHILLIPS, HUXMAN, and MURRAH, Circuit Judges.

MURRAH, Circuit Judge.

This is a tripartite lawsuit arising out of the destruction by fire of an oil derrick and other top ground equipment belonging to the Cities Service Oil Company, and located upon and used in the production of oil from one of its wells. The fire occurred when a workman on the well ignited escaping gas by throwing a burning match to the ground after lighting a cigarette. The equipment involved was insured against loss by fire under policies written by the Home Insurance Company and the Hartford Fire Insurance Company. These companies paid the loss under their respective policies in the total amount of $6,504.90 and brought this suit as subrogees to recover it. The amount of the loss and the right of the insurers to maintain the action is not questioned. Jurisdiction is based upon diversity of citizenship and requisite amount in controversy, both of which are shown on the record.

The amended complaint pleaded a contract dated May 13, 1942, between Cities Service as the owner of the well and appellee, Duke Anderson Drilling Company, by the terms of which the drilling company in consideration of $6.25 per hour ($150 for twenty-four hours) undertook "to clean out" the well in question, and to furnish all the usual equipment and labor used in the performance of the undertaking. The Cities Service was to have no power to direct, supervise or control the means, manner or method of performing the work covered by the contract — the contractor being responsible to the company solely for the results obtained. It was alleged that by the terms of the contract, the drilling company impliedly agreed to perform the work in a proper and workmanlike manner and to be responsible to the company for defective performance; that the Duke Anderson Drilling Company entered into some kind of an agreement with Harvey Incorporated for the performance of all or part of the work covered by the contract and that on or about the 14th day of May, 1942, and while in the performance of the contract, a fire occurred at the well resulting in the loss sought to be recovered. That the fire was caused by the workman who carelessly and negligently ignited the gas by striking a match to light a cigarette; that he was an employee of either Duke Anderson Drilling Company or Harvey Incorporated, and they are therefore liable for his negligent conduct.

Anderson Drilling Company answered, admitting the contract to clean out the well, but denied that the loss was caused by its negligence. It alleged that the fire was wholly unavoidable, but that in any event the Cities Service had full knowledge of all the existing conditions under which the work was performed, and if any of the drilling company's servants, or employees, were negligent, the Cities Service also negligently contributed to the cause of the damage by failing to warn the employees of the drilling company of the dangerous condition resulting from the accumulated gas which was well known to the Cities Service and unknown to the drilling company. Further answering, the drilling company alleged that subsequent to the execution of the contract of May 13, 1942, it entered into an oral agreement with Harvey Incorporated, whereby Harvey, with the knowledge, consent and acquiescence of Cities Service, undertook the performance of the contract as an independent contractor of the drilling company and as the agent of the Cities Service; that the workmen on the well were therefore employees of the Cities Service, and the drilling company was not liable for their negligent acts. By cross-petition, it alleged that Harvey Incorporated undertook the performance of the contract with the Cities Service in consideration of $135 per day, and if an employee of Harvey was negligent as alleged in the complaint, and if it be found that the cross-petitioner was primarily liable to Cities Service therefor, it is entitled to recover from Harvey Incorporated the amount of its liability.

Harvey Incorporated answered admitting the contract between Cities Service and Anderson Drilling Company, and the occurrence of the fire as alleged, but denied all other allegations in the complaint and cross-petition. Answering further, it averred that in order to perform its contract with the Cities Service, the Anderson Drilling Company rented Harvey Incorporated's drilling unit and men for its operation, and agreed to pay Harvey $135 per day therefor. That the workmen thereupon became the employees of the Anderson Drilling Company, or the Cities Service, and were under their direction and control during the performance of the work; that Harvey had no agreement with and received no compensation from the Cities Service, and was therefore not responsible for the acts of the workmen who were loaned or hired to the Anderson Drilling Company. Alternatively, Harvey Incorporated pleaded that Cities Service was contributorily negligent by failing to furnish a safe place for the performance of the work of cleaning out the well; by not using proper equipment or taking proper steps to prevent gas from escaping and accumulating in and around the well, and in failing to warn individuals of the dangerous conditions existent when the gas was ignited.

At the conclusion of the trial on the issues as cast by the pleadings, the trial court after appropriately instructing the jury on the law of master and servant, independent contractors and negligence, submitted three interrogatories in...