Texas American Oil Corp. v. Theo H. Blue Drilling, Inc.

OPINION OSBORN, Justice. This is a venue case involving a drilling contract. The trial court overruled the Ap-pedant’s plea of privilege, and held that venue was properly established in Crane County under the provisions of Subdivision 5, art. 1995, Tex.Rev.Civ.Stat.Ann. We reverse and order the case transferred to the District Court of Midland County, Texas. The Appellee, as contractor, and the Appellant, as owner, entered into a written contract for Appellee to drill an oil well in Crane County, Texas, for Appellant. During the drilling operations, gas was encountered and it blew out, and a resulting fire destroyed the drilling rig. Appellee alleged in its suit that the Appellant breached its contract by failing to provide a rotating assembly for a blowout preventer, as provided for in Paragraph 26 of the contract. That paragraph of the contract provides: “Owner Will Furnish The Following: “All Water-Fresh and 10.0# Brine. Cellar, Pits and reserve pit if they have to be shot with dynamite. Line reserve pit if it is to be lined. Rotating assembly for B.O.P. if needed. Bradenhead to nipple up on surface casing.” In order to maintain venue under Subdivision 5, art. 1995, Tex.Rev.Civ.Stat.Ann., it was necessary for the Appellee to prove an obligation in writing, the execution by the Appellant, and that the obligation is performable in the county of the suit. MACPET v. Oil Field Maintenance Company, 538 S.W.2d 240 (Tex.Civ.App., Corpus Christi 1976, no writ). In this case, there is no question about the execution of the written contract. The sole question is whether or not the obligation made the basis of the Appellee’s suit is performable in Crane County, where suit was filed. Since the 1935 amendment of Subdivision 5 of Article 1995, the Courts have recognized that venue under this subdivision may not be fixed by implication. In Saigh v. Monteith, 147 Tex. 341, 215 S.W.2d 610 (1948), the Court said: “The intention of the Legislature in adding this amendment is obvious. Under Subsection 5 as it stood at the time of the amendment one might become a party to a contract which by implication [692] obligated him to perform in a particular county, although the contract did not expressly name the county of performance and obligate the defendant to perform therein. By amendment the language of the subdivision was made so plain as to admit of no construction that would fix venue by implication. In order to sustain venue in Harris County in this case the contract must have expressly named that county or some definite place therein where relator was obligated to perform. This contract does not meet that test. It provides merely that the relator was to make payments to the named bank. Where such payments were to be made is not covered by the express language of the contract. * * * ” The Appellee contends that since under the terms of the written contract the well was to be drilled in Crane County, and since the rotating assembly was used in the drilling of the well, the only place the rotating assembly could be furnished was in Crane County, and, thus, venue is not fixed by implication but by the terms of the contract. A similar contention was made in Hamilton v. Booher, 124 S.W.2d 184 (Tex.Civ.App., Amarillo 1939, no writ), where suit was brought for damages for the alleged breach of a rental contract for land in Lubbock County. The Court, after noting that venue could not be fixed by implication, said: “Appellee contends that the nature of the contract was such that it could not be performed in any county other than the one in which the land was located because it was for the breach of a contract to place him in possession of the land and that obviously the physical act of placing him in possession thereof could not be performed at any place other than upon the land itself, which was located in Lubbock County. We cannot agree to this contention. * * * ” In this connection, it is important to note that venue under Subdivision 5 is not controlled by the place where the contract requires the Appellee to perform the drilling of the well, but by the place where the contractual obligation sued upon requires the Appellant to perform. Rogers v. Waters, 262 S.W.2d 521 (Tex.Civ.App., San Antonio 1953, no writ); Jeter-Miliar Company v. Kasch Bros., Inc., 466 S.W.2d 598 (Tex.Civ.App., Eastland 1971, no writ); Heath v. Gilbreath, 536 S.W.2d 404 (Tex.Civ.App., El Paso 1976, no writ). The contract is silent as to the place that obligation is to be performed. Exhibit “A” to the drilling contract provides in paragraphs 5, 6, and 7 that certain machinery, equipment, tools, materials, supplies, instruments, services, and labor shall be provided at the well location. But that language was not used in Paragraph 26 of the contract, which was set forth above, and the only way to determine where the rotating assembly was to be furnished is by implication, just as the place for payment of the note in the Saigh case could only be fixed by implication. In Maynard Hill, Inc. v. Smith, 534 S.W.2d 733 (Tex.Civ.App., Waco 1976, no writ), suit was filed to recover damages from a manufacturer who contracted to provide aluminum windows for the plaintiff’s home which was being constructed in Waco. The written order which served as the basis for the suit stated the plaintiff’s name and address and the location of his proposed residence as Waco, Texas. The order obligated the manufacturer “to furnish items as described.” The appellate Court, in concluding that Subdivision 5 was not applicable, said: “The contract executed by Maynard Hill does not expressly state that the windows and doors are to be delivered to Waco or McLennan County. It states that they are to be ‘furnished’ * * *. The contract is addressed to Mr. Harry Trippett in Waco, and recites ‘Project: Smith Residence, Location: Waco, Texas’, but nowhere expressly agrees to deliver the building materials to such project or to Waco. The only way Maynard Hill can be said to have agreed in the contract to deliver the materials to Waco would be by implication, and venue under subdivision 5, cannot be fixed by implication, Bowden v. Murphy, Tex.Civ.App. (Waco) NWH, 448 S.W.2d 183; [693] Saigh v. Monteith, 147 Tex. 341, 215 S.W.2d 610; Thomas v. Oil Belt Supply Co., Tex.Civ.App. (Eastland) NWH, 375 S.W.2d 527; Johnston v. Personius, Tex.Civ.App. (San Antonio) NWH, 242 S.W.2d 471; Williams v. James, Tex.Civ.App. (Ft. Worth) NWH, 308 S.W.2d 528; Harkness v. Employers National Ins. Co., Tex., 502 S.W.2d 670.” The statement of facts contains evidence that when the owner agreed to furnish those items listed in Paragraph 26, it agreed to pay for such items, and that it is customary in the industry when the contractor needs the special equipment listed, the contractor will call a service company designated by the owner to supply such equipment and have it delivered to the drill site and charged to the account of the owner. While that may well be the custom in the industry, we conclude that such testimony is not controlling, and that we are bound by the terms of the written contract. Even a glance at Exhibit “A” reflects that the parties did specifically provide that over 50 different items would be provided at the well location when they intended for one of them to do so. They did not use that language with regard to the equipment listed in Paragraph 26, and we conclude that the only way an obligation can be imposed upon the owner to provide such equipment at the well site in Crane County is to do so by implication. Thus, Subdivision 5 of Article 1995 is not applicable, and the Appellant’s plea of privilege should be sustained. The order of the trial Court overruling the Appellant’s plea of privilege is reversed, and the case is ordered transferred to the District Court of Midland County, Texas.