M. J. Delaney Co. v. Murchison

• Decision Date: 15 July 1965
• Docket Number: No. 149,149
• Parties: M. J. DELANEY COMPANY, Appellant, v. John W. MURCHISON, Appellee.
• Court: Texas Court of Appeals

Page 705

393 S.W.2d 705

M. J. DELANEY COMPANY, Appellant, v. John W. MURCHISON, Appellee.

No. 149.

Court of Civil Appeals of Texas, Tyler.

July 15, 1965.

Rehearing Denied Sept. 16, 1965.

Jack Pew, Jr., Jackson, Walker, Winstead, Cantwell & Miller, Dallas, William H. Kugle, Athens, for appellant.

W. B. Fields, Fields & Fields, Jack T. Life, Life, Bolding & Key, Athens, for appellee.

MOORE, Justice.

Appellant, M. J. Delaney Company, a partnership, hereinafter referred to as the company, brought this suit against appellee, John W. Murchison, to recover $27,372.00 under a contract with Murchison for the drilling of an oil well known as the Robinson well. Prior to the drilling of the well, the company wrote Murchison as follows:

'Dear Mr. Murchison:

'This confirms the arrangement, verbally made, by which we are to drill your #1 Robinson Well, Frankston Area, East Texas, to the James Lime encountered at or above 10,000 feet.

'We have previously completed two wells in this immediate area for you-#1-A Eva Hurt, #-B Eva Hurt.

'The stipulations, responsibilities, billings and payments on this well will be the same as those on the two completed wells above mentioned.

'We each assume to each other, the same obligations granted in performing on these wells.

'If you understand this as our agreement will yoy please accept in the place below provided therefor and return two singed copies for our use.

'With kindest regards, we are

'Yours very truly,

'M. J. DELANEY CO.

'/s/ Wm. D. McBee

'Wm. D. McBee'

Murchison accepted the same and sent it back to the company.

After the well had been drilled to the contract depth of 10,004 feet, it appeared that it would produce oil and Murchison then instructed the company to set the pipe in the well. While the drilling crew was circulating the drill pipe, preparatory to setting the pipe, the company's driller, W. A. Holder, stopped the rotary while the Kelly was down and at a time when the bit was at or near the bottom of the hole. As a result, the drill pipe became stuck in the hole.

As will be hereinafter shown, the jury found that the company's driller was negligent in stopping the rotary and that such negligence was a proximate cause of the pipe becoming stuck. After considerable time and expense, the company succeeded in unsticking the pipe and later brought the well in as a producing oil well.

The company immediately billed Murchison for the sum of $49,519.80 covering the contract price of $4.95 per foot for the drilling of the well to the 10,004 foot level. He was not billed at that time for the expense of unsticking the pipe; however, the bill contained a notation reading as follows:

'Day work and third party service charges will be rendered separately at a later date.'

Murchison paid the bill and it was not until several months later than he was billed for an additional amount of $20,927.80 covering the expense for unsticking the pipe and also for the sum of $6,444.20 covering the additional expense in connection with bringing in the well after the pipe was unstruck, totaling $27,372.00. He refused to pay the bill and the company brought suit alleging a breach of contract and in the alternative for quantum meruit. At the time of the trial Murchison admitted that he owed the $6,444.20 for the expense of bringing in the well and deposited that amount into the Registry of the Court. He refused to pay the remaining $20,927.80 which represented the expense in unsticking the pipe. The primary question involved is whether Murchison or the company is to stand the loss in unsticking the pipe.

The company bases its claim upon the above letter agreement providing that the Robinson well was to be drilled under the same stipulations, responsibilities and obligations as the Hurt wells, and contends that since the Hurt wells were drilled under a written contract providing that Murchison would '8. Assume all risks after the well had been drilled to the contract depth' he became bound by this and all other terms and conditions of the previous agreement and therefore assumed all risks including the risk of the company's own negligence.

Murchison denied that he signed the contract or ever assented to the provisions thereof and therefore never agreed to assume the risk of the company's negligence.

He also alleged that because Mr. McBee, a partner in the company, agreed to unstick the pipe and assume full responsibility and failed to notify him that it was his responsibility, the company was estopped to assert any claim against him.

The cause was tried before a jury and in response to the Special Issues submitted, the jury found:

(1) That Murchison and the company entered into an agreement respecting the drilling of the Eva Hurt wells;

(2) That the written contract dated May 16, 1961, prepared by the company and forwarded to Murchison correctly states the tems and conditions of the agreement in regard to the Eva Hurt wells;

(3) That Murchison received the contract prior to commencing either of the Eva Hurt wells;

(4) That Murchison permitted the company to commence work under the contract without notifying the company that he did not accept the contract;

(5) That Murchison never at any time prior to the completion of the Robinson wells objected to any of the terms of the contract;

(6) That Murchison accepted the benefits of the company's work done on the two wells;

(6a) That the work performed by the company on the Robinson well, which is the well in question, was performed in a good workmanlike manner;

(12) That W. D. McBee, a partner in the Delaney Company, told Murchison that the company would assume full responsibility for getting the pipe unstuck;

(13) That Murchison believed and relied upon such statement.

(13a) That but for such statement, Murchison would have taken charge of the operations and expenditures in getting the pipe unstuck;

(15) That the company's driller, W. A. Holder, was negligent in stopping the rotary;

(16) That such negligence was a proximate cause of the pipe becoming stuck;

(19) That the company's driller, Holder, was negligent in stopping the rotary with the bit at or near the bottom of the hole;

(20) That such was not the proximate cause of the pipe becoming stuck;

(21) That Holder was guilty of negligence in failing to keep the rotary drill pipe turning;

(22) That such was a proximate cause of the pipe becoming stuck;

(25) That the company, by the conduct of its partners and employees, after the pipe became stuck led Murchison to reasonably believe that the company had assumed full responsibility for getting their drill pipe unstuck;

(26) That Murchison relied upon this conduct and believed in good faith that the company would not hold him responsible for the cost of getting the pipe unstuck;

(27) That but for such conduct and his reliance thereon, Murchison would have taken charge of the drilling operations and expenditures in getting the pipe unstuck.

Prior to judgment appellant, M. J. Delaney Company, made a motion to disregard all jury findings made in favor of the appellee, which motion was overruled. Appellee Murchison made a motion to disregard the jury's findings in Special Issues 1-6 and alternatively for judgment on the verdict. The court, without making any ruling upon appellee's motion to disregard, rendered judgment on the verdict. The judgment awarded the appellant-company a recovery of only the sum of $6,444.20 which appellee had previously paid into the Registry of the Court, and denied a recovery for the $20,927.80 in dispute.

The company duly perfected this appeal bringing forward fourteen Points of Error which are all briefed together, contending that since the trial court rendered judgment on the entire verdict, the effect of the judgment amounts to an affirmative finding that Murchison had agreed to 'assume all risks' in the performance of the contrat. Therefore, the company contends that since it was undisputed that $20,927.80 was a reasonable charge for unsticking the pipe, it is entitled to judgment because under the findings of the jury, appellee is bound by the written contract which provided that he would assume all risks after total depth had been reached, unless appellee has a valid defense. Appellant thus contends that the agreement to 'assume all risks' amounts to an indemnity contract agreeing to indemnify against its own negligence and that the only question is whether appellee's defenses are valid-(1) whether appellee is excused from payment because of negligence in the work on the well which occurred after total depth had been reached, and (2) whether appellee produced evidence of a case of estoppel.

Appellee Murchison contends that the judgment exonerating him from liability must be sustained because: (1) there is no evidence that he ever signed or assented to the written contract prepared by McBee covering the Hurt wells; (2) there is no jury finding or evidence showing that he agreed to be bound by the same terms and conditions in the drilling of the Robinson well as the Hurt wells; and (3) even though it be found that he did agree to assume all risks in the drilling of the Hurt wells, the language used in the letter agreement covering the Robinson wells is not sufficient to show that he agreed to assume the same stipulations, responsibilities and obligations as those in the drilling of the Hurt wells. In any event, he contends that an agreement to assume all risks would not bind him to assume the risk of the company's own negligence.

In the absence of any ambiguity, the construction of the contract becomes a question of law for the determination of the trial court. Tower Contracting Co. v. Flores, 157 Tex. 297, 302 S.W.2d 396.

'The cardinal rule to be observed in the construction of contract is to ascertain and give effect, whenever possible, to the real intention of the parties, as that intention is revealed by the language used in the agreement. * * *' 13 Tex.Jur.2d, Par. 122, page 287.

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