Case Title: Rodgers v. Arapahoe Pipe Line Co.

Citation: 181 Kan. 579, 313 P.2d 740

Docket Number: 40,577

State: kansas

Court: Kansas Supreme Court

Date: 1957-07-03T00:00:00Z

Document:
181 Kan. 579 (1957)
313 P.2d 740
J.A. RODGERS, Appellee,
v.
ARAPAHOE PIPE LINE COMPANY, a corporation; ENAMELEX CORPORATION OF TEXAS, a corporation; SINCLAIR PIPE LINE COMPANY, a corporation, and the affiliates and subsidiaries of said defendants, Arapahoe Pipe Line Company and Sinclair Pipe Line Company, Appellants.
No. 40,577

Supreme Court of Kansas.
Opinion filed July 3, 1957.
Delmas L. Haney, of Hays, was on the briefs for appellants.
Oscar Ostrum and J. Eugene Balloun, of Russell, were on the briefs for appellee.
The opinion of the court was delivered by
SCHROEDER, J.:
This is an action to foreclose a transporter's lien on an oil pipe line situated in various counties in the States of Kansas and Colorado. The appeal is from an order of the lower court overruling appellants' demurrer to the amended petition of the plaintiff.
The appellants herein, Arapahoe Pipe Line Company, a corporation, and Sinclair Pipe Line Company, a corporation, will be referred to as Arapahoe and Sinclair, respectively, or as appellants. The appellee, J.A. Rodgers, plaintiff below, will be referred to as appellee. The defendant, Enamelex Corporation of Texas, a corporation, will be referred to as Enamelex.
The amended petition in substance alleges that Arapahoe is a subsidiary of Sinclair and is the owner of an oil pipe line situated in the States of Kansas and Colorado, running from a point near Sterling in Logan County, Colorado, to a point near Independence in Montgomery County, Kansas, passing through many counties between said points.
The amended petition further alleges that the appellant, Arapahoe, was constructing said pipe line in 1954 and entered into a contract with Enamelex as its agent to furnish pipe coating or enamel to be used in said pipe line; that Enamelex, as agent of Arapahoe, contracted with appellee to furnish transportation for this pipe coating or enamel to various points along said pipe line; that the contract by and between Enamelex and appellee was in the form of two separate written agreements on two trucks and trailers of appellee, *581 coupled with an oral contract for the employment of appellee as driver of one of the trucks, to insure transportation and delivery of the pipe coating or enamel, a product of Enamelex, from its points of storage to points along the route of the pipe line; that all of said contracts constituted one single indivisible transaction; that appellee, under and by virtue of said express contracts, hauled pipe coating or enamel to various points along said pipe line to be used in such construction; that such materials were used in the construction and completion of said pipe line; that Enamelex did not pay the appellee for such hauling and that the appellee is entitled to a transporter's lien on the entire pipe line for such hauling, based upon verified lien statements and accounts properly filed and recorded in the various counties in Kansas and Colorado through which the pipe line runs. Pertinent portions of the seven-page amended petition will be detailed as the opinion progresses.
It must be noted at this point that Enamelex was named as a party defendant in the amended petition but did not take an appeal to this court.
The questions involved as appellants present them are:
I.
Does a transporter's lien as provided for by G.S. 1949, 55-212, 213 and 215, as amended, cover and provide a lien against an oil and gas pipe line?
II.
Does the amended petition state facts sufficient to establish a cause of action against the appellants for either judgment in rem and foreclosure or for a money judgment?
G.S. 1949, 55-212 (b), provides:
G.S. 1949, 55-213, provides:
G.S. 1955 Supp., 55-214, provides:
It is the contention of the appellants that the foregoing statutes are intended to and cover only specific equipment used in and about an oil-field in connection with the construction and operation of oil and gas leases and oil and gas pipe lines. They further contend that the statutes are intended to and do cover the transporting of drilling rigs, drill-in units, bulldozers, light plants, pipe pulling rigs, oil servicing company equipment, ditch diggers, bladers, scrapers, and all other equipment used in the construction, drilling, repairing or maintenance of an oil and gas lease or oil and gas pipe lines, and do not cover the transportation of items furnished or *583 supplied to be a permanent part of the oil and gas well or oil and gas pipe line.
The appellants cite G.S. 1949, 55-207, the general oil-field lien statute, which provides that any person who furnishes materials or labor shall have a lien upon the whole of such leasehold or oil pipe line or gas pipe line, etc. In contrast they point out that the act establishing the lien of the transporter does not specifically give a lien on the "whole" of the leasehold, oil pipe line or gas pipe line for the transportation or hauling of items which become a permanent part thereof.
They further cite G.S. 1955 Supp., 55-214, and specifically note that the section refers to "oil-field equipment delivered" and provides that the lien holder shall be notified before the "oil-field equipment" and materials are removed from the leasehold to which the lien claimant delivered the oil-field equipment and materials.
The lien of a transporter of oil-field equipment is purely a statutory lien which confers special privileges and should be strictly construed. This court in Bridgeport Machine Co. v. McKnab, 136 Kan. 781, 18 P.2d 186, sets forth the rule of construction pertaining to lien statutes as follows:
The lien of a transporter of oil-field equipment is analogous to the mechanic's lien. Both are creatures of statute and in derogation of the common law. The basis upon which this class of legislation rests is well stated by Justice Brandeis in Piedmont Coal Co. v. Seaboard Fisheries Co., 254 U.S. 1, 41 S. Ct. 1, 65 L.Ed. 97:
This court has used similar language in Given v. Campbell, 127 Kan. 378, 273 Pac. 442:
We think the construction which appellants seek to have placed upon the legislative act heretofore quoted is too narrow. Obviously, under 55-213, supra, a lien is given to one who transports oil-field equipment, including the cost of labor performed and materials expended in the transportation. By definition in 55-212 (b), supra, oil-field equipment includes oil-field supplies and materials used in completing oil pipe lines and, significantly, the definition includes oil pipe lines.
The primary element of a pipe line is the metal tubing or cast iron pipe divided into convenient lengths or joints. In the assembly of the metal tubing into a pipe line jointing material is needed to seal the line and a protective coating is needed to guard against corrosion from moisture and chemicals in the soil. These materials and supplies are clearly covered by the term "oil-field equipment" and become inseparable once the pipe line has been constructed and installed. None of these materials used in the line can be restored to the original form in which they were transported and therefore cannot be "removed" in the sense that the term is used in 55-214, supra.
The provisions of 55-214, supra, do not by their wording establish the lien created. They do not indicate for what the statute gives a lien or to whom the statute gives a lien. The very wording which begins "Any person entitled to file a lien as provided for in this act" presupposes that the lien has been established aside from this particular section. Furthermore, the first sentence of 55-214, supra, is complete in and of itself. It provides the time within which the lien of a transporter of oil-field equipment must be filed. Provision is then made in the event that oil-field equipment is to be removed from a leasehold interest to which the lien claimant delivered them that the party affected by the lien give notice before removing the same. It further provides the procedure to protect a lien claimant where oil-field equipment has been removed from the county in which it was originally delivered. That oil pipe lines are normally constructed on an easement and not a leasehold interest in land is indication that the legislature did not intend by 55-214, supra, to limit the scope of the lien.
*585 The provisions after the first sentence in 55-214, supra, were intended by the legislature to protect a lien claimant on such items, upon which a lien had been established by other provisions of the act, that could be removed after the lien had become attached. An oil pipe line, regardless of its length or size, is defined as oil-field equipment upon which a lien attaches when the conditions prescribed by the act are met. An absurd construction cannot be placed upon the act by requiring one person as defined in the act to transport each and every item going into the construction of an oil pipe line before a lien attaches. Thus, a reasonable interpretation of the act makes it mandatory that the transporter of any part of the materials or supplies which go into the construction of an oil pipe line have a lien upon the indivisible whole. This interpretation is consistent with the rule of construction heretofore noted. To whom and for what the lien statute gives a lien is clear from the act itself under rules of strict construction.
In Meyer v. Latta, 178 Kan. 316, 285 P.2d 782, the provisions of G.S. 1949, 55-207, were before the court for consideration. It was there held that a lien in favor of the driller, laborers or materialmen attached to the drilling rig furnished by the owner of the lease without regard to whether he owned such drilling rig, or whether he borrowed it, or rented it.
The practical application of the Meyer case to the instant case is the rule of construction  that once a right to a lien exists, a liberal construction is applied to the statute. This court there held that a lien will attach to all property on the leasehold at the time the lien is filed, construing G.S. 1949, 55-207.
A good discussion of many Kansas oil-field lien cases is undertaken in the Meyer case, some of which are cited by the parties in the instant case. Further discussion of these cases will not be undertaken here since reference to the Meyer case will suffice.
The extent to which this court has liberalized the mechanic's lien statute is indicated in Meadows v. Oil Co., 108 Kan. 228, 194 Pac. 916; and Woodmansee v. Oil & Gas Co., 113 Kan. 637, 216 Pac. 276.
If appellants' construction were adopted, portions of 55-212(b), supra, and 55-213, supra, would be emasculated. Persons who transported the equipment and machinery to build the oil pipe line would have a lien, but those who transported the materials from which the oil pipe line itself was constructed would be denied a lien. This could not have been the intention of the legislature.
*586 The appellants argue that 55-213, supra, gives a lien upon the interest of the owner in the oil-field equipment transported, provided the same is hauled or transported under an express contract with the owner. This is not in accordance with the statute. The provisions of 55-213, supra, specifically designate that a person who transports or hauls "... oil-field equipment under express contract with the owner ... or ... agent, ... of any such owner, shall have a lien upon interest of such owner in the oil-field equipment so transported and hauled...." (Emphasis added.)
On motion of the appellants in the lower court the appellee (plaintiff) was required to make his petition definite and certain by stating which of the three defendants (appellants and Enamelex) made the contract with the appellee and to specifically state with which officer or agent of the defendants such contract was made and whether the same was oral or in writing. The appellee amended his petition to read as follows:
At no time after the foregoing amendment was made to the petition did appellants attack the allegations of agency. Therefore, although such allegations are conclusions, they are sufficient when attacked by demurrer under liberal rules of construction, particularly in the absence of a motion to make definite and certain. Under such circumstances the question of the agent's authority is one of evidence, not of pleading. (Donie v. Associated Co., Inc., 173 Kan. *587 753, 757, 252 P.2d 609; Rogers v. Beiderwell, 175 Kan. 223, 262 P.2d 814; and Rule v. Mitchell, 173 Kan. 803, 806, 252 P.2d 924.)
Does the amended petition state facts sufficient to establish a cause of action against the appellants for either a judgment in rem and foreclosure or a money judgment?
This question is closely interwoven with the first question and much of the discussion heretofore presented is applicable thereto.
The principal contention of the appellants on this point is that the items listed in the account of the verified lien statement are non-lienable items. They argue that they are simply items of expense, citing Wilkinson v. Pacific Mid-West Oil Co., 152 Kan. 712, 107 P.2d 726; and Bridgeport Machine Co. v. McKnab, supra.
Appellee, in his amended petition, concerning the three express contracts, alleges that:
The two written contracts, in form set up as truck leasing agreements, specifically provided that the lessee, Enamelex, was to make the necessary repairs, provide all fuel necessary to the operation of the leased trucks, and carry public liability and property damage to adequately cover the equipment being leased.
*588 The plaintiff (appellee) specifically incorporated in the amended petition his verified account with Enamelex as follows:
*589 All of the items of expense above enumerated were paid by the appellee in the operation of said trucks while transporting the pipe coating and enamel to various points along the pipe line.
The amended petition, liberally construed as we must on demurrer in this case, fairly imports that the appellee owned two trucks and trailers and was in the transportation business; that Enamelex needed to have its product, pipe coating, transported to the pipe line of Arapahoe. It needed transportation. Appellee had transportation to sell. The express contract entered into was alleged in substance in the amended petition as having three component parts, two written leasing agreements and an oral contract  all taken together formed the real agreement between the parties under which appellee became the transporter of the materials which Enamelex, as the agent of Arapahoe, furnished for the completion of the pipe line.
Appellants' argument that these were items of expense and not lienable is refuted by the facts alleged, liberally construed in favor of the appellee. Enamelex, under the so-called lease contracts, was supposed to provide all the operating expenses and repairs for the trucks and trailers but failed to do so. Enamelex may have had its own reasons for setting up the contract in the form of a lease of the trucks and trailers and the employment of appellee as one of the drivers at a nominal wage.
Enamelex's failure to pay the expenses which it was required to furnish, if the so-called leasing contracts were bona fide, coupled with the fact that appellee at a nominal wage, which was not paid in full, was in charge and responsible to see that the trucks were kept fueled and greased and in operating repair, including the payment of state motor carrier taxes at ports of entry, weighing charges and permit fees at appellee's own expense, all lead to the inescapable conclusion, as garnered from the amended petition, that appellee was the transporter of the materials at an agreed contract price calculated from the two written leasing contracts and the oral agreement.
Various arguments of appellants indicating the nebulous character of appellee's claim to a lien have not been overlooked. The trouble with these arguments lies in the fact that they are essentially matters of defense, whereas here we are dealing with allegations of an amended petition which for purposes of the demurrer are to be taken as true. We are not at liberty to speculate on the evidence.
*590 In conclusion, we hold that the amended petition of the appellee alleges sufficient facts to state a cause of action as a transporter of oil-field equipment entitled to a lien on the oil pipe line of Arapahoe for unpaid transportation charges on material and supplies used in the construction of said oil pipe line, pursuant to the provisions of G.S. 1949, 55-212(b) and 213.
The judgment of the lower court overruling the demurrer of appellants should be and hereby is affirmed.