Stine Oil & Gas Co. v. English

• Decision Date: 26 February 1916
• Docket Number: (No. 8333.)
• Citation: 185 S.W. 1009
• Parties: STINE OIL & GAS CO. v. ENGLISH.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

185 S.W. 1009

STINE OIL & GAS CO. v. ENGLISH.^*

(No. 8333.)

Court of Civil Appeals of Texas. Ft. Worth.

February 26, 1916.

On Motion for Rehearing, April 29, 1916.

Appeal from District Court, Clay County; J. W. Akin, Judge.

Action by H. W. English against the Stine Oil & Gas Company. From a judgment for plaintiff, defendant appeals, and plaintiff cross-appeals. Reformed and affirmed.

Samuels & Brown, of Ft. Worth, and Wantland & Parrish, of Henrietta, for appellant. Arnold & Taylor, of Henrietta, and Huff, Martin & Bullington, of Wichita Falls, for appellee.

DUNKLIN, J.

The Stine Oil & Gas Company employed H. W. English to drill a well on a tract of land in Clay county, for the purpose of obtaining oil and petroleum therefrom. The contract of employment was in writing, in which the Oil Company was designated as the party of the first part and English as the party of the second part, and is as follows:

"I. Party of the second part hereby agrees to drill a well for the party of the first part for the purpose of obtaining therefrom oil and petroleum; said well to be sunk on a forty-acre tract of land in Clay county, Texas, near Petrolia, and consisting of lots 3 and 6, in block 1, according to the plat of land belonging to estate of J. D. Stine and M. F. Stine, deceased, of record in Book 1, page 16, of the Plat Records of Clay County, Texas, at a point to be designated by party of the first part.

"II. Said party of the second part agrees to drill said well to a depth of two thousand (2,000) feet unless oil in paying quantities is discovered at a lesser depth.

"III. Party of the second part is to supply, furnish, provide, and assemble at his own expense (except as hereinafter specified), at the place where said well is to be sunk, all and singular the necessary and requisite labor, fuel, material, machinery, appliances, apparatus, equipment, tools, utensils, and connections to enable him to sink and complete said well in a skillful, efficient, and scientific manner and way under the terms of this contract.

"IV. Diameter of the well when completed shall be 6 5/8 inches, if possible, and all and singular the appliances, machinery, apparatus, and utensils shall be of standard make and adequate as well as efficient for the purpose of this contract.

"V. If for any reason before the final completion thereof the drill should break, or said well cave in or become clogged or impassable, so as to prevent its ultimate completion, then party of the second part shall be under obligation to sink another well and perform an equivalent work without additional charge therefor, at another point on said tract.

"VI. Party of the second part agrees to begin the drilling of said well within thirty days from the date hereof, and to prosecute such work with diligence, efficiency, and good faith until the completion of the same under the terms of this contract, and the ultimate period within which said well shall be completed is hereby fixed at three months from the date hereof, unless further time is granted for that purpose by party of the first part. It is further agreed that said well is to be drilled with standard rig and cable tools.

"VII. Party of the first part is to furnish the casing for said well, to be delivered on the ground where said well is to be sunk.

"VIII. Each party is to pay one-half of the cost of fuel, which total cost shall not exceed seven and 50/100 dollars ($7.50) per day, or, in other words, the share of such expense to be borne by party of the first part shall not exceed three and 75/100 dollars ($3.75) per day; water for drilling purposes to be furnished by party of the first part in tank adjacent to well, but the pumping thereof to be done by party of the second part at his own expenses.

"IX. In drilling said well, party of the second part agrees to report to party of the first part the sands found in said well, and said party of the second part, at request of party of the first part, agrees to stop the drilling of said well at any sand when requested so to do, and test the same to determine whether or not it will produce oil in paying quantities, and, if oil in paying quantities is found at a lesser depth than 2,000 feet, then party of the second part agrees to stop the drilling of said well and finish the same in a workmanlike manner.

"X. If the said well is completed to a depth of 2,000 feet and oil in paying quantities has not been found therein, then party of the second part agrees, at his own cost, to pull the casing in said well, and unjoint the same, and have the same properly stacked: Provided, however, that it is possible for said casing to be drawn from said well with the machinery then on hand.

"XI. Party of the first part agrees to pay party of the second part, and party of the second part agrees to accept, as consideration for his performance of this contract, the sum of three dollars ($3.00) per foot to the point of completion, not to exceed 2,000 feet, which consideration is to be paid on the completion of the well under the terms of this contract.

"XII. Party of the first part is to be the judge, as the drilling of said well proceeds. whether oil is found in paying quantities, and when it shall be determined by said party of the first part, its agents and servants, that oil is or is not to be found in paying quantities, then the work of drilling said well shall desist and cease at its request, and party of the first part shall not be liable for any further costs thereof.

"XIII. All and every risk, hazard, damage, and liability in the matter of assembling the material, and in drilling said well and in connection therewith, and in testing and demonstrating said well, shall be and is hereby made the sole responsibility of party of the second part: Provided, however, that in the event the rig should be blown down or destroyed by a cyclone or tornado, the cost of restoring same shall be borne by party of the first part.

"XIV. When completed, unless prevented by too great a volume of gas or oil, the well shall be thoroughly bailed and `sand-pumped' by said party of the second part, until all drillings and sediment are removed therefrom and the well thoroughly cleaned.

"XV. Party of the second part agrees to deliver said well, when completed to the depth required, to party of the first part in good order, free and clear of all obstructions."

The well was drilled to a depth of 1,719 feet into a gas sand, which produced gas at the rate of 16,000,000 cubic feet per 24 hours. Eight-inch casing had been set at a depth of 1,694 feet, and 6-inch casing was set at a depth of 1,719 feet, where the gas was struck. The well could then have been finished and used for a gas well, and under a contract with the Lone Star Gas Company, which already owned the gas rights upon said land, could have been turned over to that company at a price equal to the cost of the work up to that time. But the officers of the Oil Company, preferring an oil well instead, decided to have the well drilled deeper in the hope of securing oil, and in obedience to instructions to that effect English continued drilling, and, having struck water below the gas sand, he shut it off by using a 5-inch casing, which was continued down to a depth of 1,783 feet, when he was directed by Mr. Fitch Stine, president of the Oil Company, to cease drilling. English was then directed by him to withdraw the 5-inch casing and return to the gas sand and finish the well as a gas well, which was afterwards done. The Oil Company paid English, for drilling the well to a depth of 1,783 feet, the contract price of $3 per foot, with the exception of a small balance of $138.05.

This suit was instituted by H. W. English against the Stine Oil & Gas Company to recover the aforesaid balance of $138.05 under the original contract, and also for the work he performed and certain expenses incurred in returning to the gas sand and finishing the well as a gas well after the company had decided to abandon its further efforts to procure oil. The demand for the work in returning to the gas sand and finishing the well as a gas producer was predicated upon an alleged parol contract on the part of the company, represented by Mr. Fitch Stine, its president, and Dr. Rumph, its vice president, to pay English for the alleged extra work at the rate of $50 per day, which was alleged to be the usual and customary price for such work with the drilling outfit used by plaintiff therefor. The claim for the expenses incurred in performing such alleged extra work, aggregating $155.85 and consisting of divers characters, such as telephone charges, hired help, etc., an itemized statement of which was attached to the petition as an exhibit, was based upon allegations that the same were necessary and that the defendant thereby impliedly became bound to pay the same. But, according to the plaintiff's contention, said extra work, for which he claimed compensation at the rate of $50 per day, did not include the drawing of the 5-inch casing, after the further drilling had been abandoned, which he admitted he was obligated to draw under and by virtue of the original written contract.

In its answer the defendant denied making the parol contract sued on, and specially pleaded as follows:

"In this connection this defendant affirmatively alleges: That on or about the 24th day of June, 1914, the plaintiff and defendant entered into a written contract by the terms of which plaintiff obligated and bound himself to drill, case, and complete and clean in a good workmanlike manner a well on lots Nos. three (3) and six (6), in block No. one (1), of land belonging to the Stine estate in Clay county, to a depth of not to exceed 2,000 feet, for the price of three ($3.00) dollars per foot. That drilling, casing, cleaning, and completing the well in good workmanlike manner and within the expressed and implied terms of said contract, meant the casing off of water from the top to the...