Court Opinion

ID: 9652618
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:28:35.328451+00
Date Added: 2024-06-11T18:12:53.004476
License: Public Domain

STONE, Circuit Judge
(dissenting). If the rule as to independent contractor is here applicable and if Davis is such a contractor, of course, the Midland cannot be held, no matter what rule of- liability is applicable as to the one legally responsible for the injury.
The contention made here is that Davis was not only an independent contractor but a sublessee or assignee of the lease. There may be a- difference of vital importance between these relationships.' Hence, the necessity of determining the true legal relationship between Davis and the Midland Oil Company. This is revealed in the contract between them and the approval thereof by the Interior Department. That contract provides that Davis shall, at his own expense, drill a well on this land to a certain depth; that the consideration therefor is expressed thus:
“The party of the second part, in consideration of said drilling, agrees to execute and deliver to the party of the first part, upon the completion of said well, as aforesaid, an assignment of .said lease hereinbefore specifically described, and to pay all rentals provided for in said lease falling, due prior to the completion of . said well to said depth; provided, however, Said second party shall be reimbursed by said first party for such rental payments upon the execution and delivery of said assignment.”
It further provides:
“It is further agreed by and between the parties hereto that the said party of the first part is not to receive, and does not hereby acquire, any interest in said lease until said assignment is executed and delivered as herein provided for, and duly approved by the Secretary of the Interior.” It provides also that the contract shall not be binding until it is approved by the Secretary of the Interior. That approval was secured and is expressed as follows:
“Approved with the' understanding that no interest in the lease will be acquired by Fred 0. Davis until an assignment is executed in accordance with the regulations and approved by the department.”
These quotations from the contract make it very clear that neither Davis nor the Midland Oil Company nor the department intended the contract (either presently or upon performance) to operate as an assignment of the lease or as the conveyance of any legal interest therein. Such assignment was to come after performance; was to be a formally executed and delivered instrument; and was subject to the approval (or disapproval) of the department. Both the contract and the “approval” thereof by the department definitely and carefully set out 'that no “interest in” the lease is acquired. by Davis until such an assignment so approved is delivered. The injury complained of here occurred during the drilling and months before such assignment was even requested. While the record shows that an assignment was attempted to be given later, it shows no approval thereof by the department; no assignment has ever been recorded nor any bond of Davis as such assignee recorded. Therefore, no valid assignment has been shown to have been, made even to the date of trial. To my mind, the above establishes that Davis was in no sense an assignee of the lease or a sublessee. Davis never has had and, as far as this record shows, has not now any legal interest in this lease. He is not sublessee, transferee nor assignee thereof. Since the definitely and carefully expressed intention of all of the parties was that Davis should have no “interest in” the lease until the formal assignment was delivered and approved and since no assignment was delivered until long after this injury and since no approval has yet takén place and since an attempted assignment without such approval is “ab*95solutely void” (Regulations No. 21), how can this lessee be heard to claim that its interest in or liability on account of the lease has been completely parted with?
In my judgment, Davis was an independent contractor. Casement v. Brown, 148 U. S. 615, at page 622, 13 S. Ct. 672, 675 (37 L. Ed. 582), where the court said:
“The will of the companies was represented only in the result of the work, and not in the means by which it was accomplished. This gave to the defendants the status of independent contractors. * * * ”
The general rule is that a defendant is not liable for a tort committed by an independent contractor. But this rule while general is not without exceptions. The application of this general rule is not a little restricted by several exceptions which are of some practical as well as legal importance. Among such exceptions are the following : (1) Where the injury is the direct result of the work contracted for; (2) where the work contracted for is' likely to cause injury unless precautions are taken; (3) where injury is the result of nonperformance of absolute (nondelegable) duties of defendant; (4) where the act contracted for is unlawful. Every jurisdiction has decisions announcing the general rule and the exceptions thereto. Clear statement of these principles and extended lists of citations may be found as follows: 26 Cyc. 1546-1566; 14 R. C. L. 79-108; a series of valuable notes in 65 L. R. A. at pages 445, 620, 742, and 833, and in 66 L. R. A. at page 119; a valuable note in 76 Am. St. Rep. page 382.
The general rule and the exceptions are settled law but there is, naturally, considerable variation in the application of these recognized principles' by different courts or by the same court at different times. It is' not always easy to determine whether the facts of a particular case place it within the general rule or within an exception and, if the latter, it sometimes is difficult to decide within which exception or exceptions to the rule the ease falls. 26 Cyc. 1557.
The trial court determined that this case was not governed by the general rule for he charged that the defense of independent contractor was “not available” and that both the Midland Oil Company and Davis were “responsible for the acts and omissions of Davis.” The court delivered no opinion and did not indicate which exception to the general rule he regarded here applicable.
Measuring the present facts by the above statement of the jaw, I think this case falls within .the exceptions and is not governed by the general rule.
It is within the first of the above exceptions because the injury is the direct result of the work contracted for. Chicago v. Robbins, 2 Black, 418, 17 L. Ed. 298; Robbins v. Chicago, 4 Wall. 678, 18 L. Ed. 427; St. Paul Water Co. v. Ware, 16 Wall. 576, 21 L. Ed. 485; Thomas v. Harrington, 72 N. H. 45, 54 A. 285, 65 L. R. A. 742 and note. It was the natural and necessary result of digging a deep well, such
as here contracted for, that various kinds of fluid wastes (including salt water) would be encountered and would have to be disposed of on the surface. The regulations of the department, governing drilling of such wells, recognize this situation and require “slush pits” to be prepared to receive such refuse. Regulations to Govern the Leasing of Land in the Osage Reservation, Oklahoma, for Oil and Gas Mining Purposes. Approved August 26, 1915. „ Paragraphs 45 and 61 and Amendments thereto. Approved May 13, 1919. If it be said that the injury here resulted not from the drilling contracted for but from the failure to confine and control the salt water, then the second of the above exceptions applies. That exception is applicable where the work contracted for is likely to cause injury unless preventive precautions are taken. In the leading case of Bower v. Peate, L. R. 1, Q. B. D. 321, at 326, Lord Cockburn has very well said:
“There is an obvious difference between committing work to a contractor to be executed from which, if properly done, no injurious consequences can arise, and handing over to him work to be done from which mischievous consequences will arise unless preventive measures are adopted. While it may be just to hold the party authorizing the work in the former case exempt from liability for injury, resulting from negligence which he had no reason to anticipate, there is, on the other hand, good ground for holding him liable for injury caused by an act certain to be attended with injurious-consequences if such consequences are not in fact prevented, no matter through -whose default the omission to take the necessary measures for such precaution may arise.”
Also see note at 65 L. R. A. 833, and Jacob Doll & Sons v. Ribetti, 203 F. 593, 121 C. C. A. 621 (3d C. C. A.). The evidence here shows that the natural and the necessary consequence would be injury to *96users of the water of this stream unless pollution from this well were prevented.
This case is, also, within' the third of the above exceptions because the injury results from nonperformance of an absolute duty of Midland Oil Company. We need not in-_ quire whether the common law imposes upon a landholder an absolute duty to prevent pollution of a stream to the injury of a user thereof. Here, there is a positive duty enjoined to prevent' such pollution. The Departmental Regulations (above cited) positively require this. . Paragraph 45, as amended, is:
“Lessee shall provide two properly prepared slush pits, into one of which he must deposit sand pumpings and other materials extracted from the well during the process of drilling, but such material as is suitable for the mudding of a well shall be run into the other pit. The construction of such pits shall be subject to the approval of the inspector. Sand pumpings and such materials shall not be allowed to run over the surface, of the land.7
Paragraph 61, as amended, is:
“All B-S and salt water from tanks or wells shall be drawn off into proper receptacles to hold and retain same without permitting it to'' run over the surface' of the land or into the creeks and ravines and where earthen tanks or sump holes are used, they shall, not be located in any draw or ravine, but must be located in places and be so constructed that water from rains will not flow into them and wash out the B-S or destroy the dams, and in cases where the B-S is no.t run through some treating process, same shall when in sufficient quantities be burned at least once every week and at more frequent intervals when possible.
“Where it is impossible to bum the B-S, or where it is necessary to pump salt water in such quantities as would damage the surface of the leased land or adjoining property, or pollute any fresh water, the lessee shall notify the superintendent, who shall give instructions in each instance as to the disposition of such B-S or salt water.”
Further, the solicitude of the department to protect pure water from contamination from oil wells is shown in paragraphs 48, 46 and 58. In paragraph 43 no oil well can be located within 200 feet of any “established watering place” without express permission. Paragraph 46 required “measures to prevent the contamination or pollution of any fresh water supply encountered in any well drilled for oil or gas.” Paragraph 58 requires protection of fresh water found in “any dry or abandoned well.” These regulations are in pursuance of the statute (34 Stat. 539, § 3) and have the .force of statutory requirements. They not only attach to- the relation established by the' lease to the Midland Oil" Company but they are specifically included in that contract. All of these requirements are placed upon the lessee. The” lessee is the only one having contractual or legal contact with the Osage Nation (owner of the land) or with the government, which is supervising the making, terms and enforcement of such leases. It is the lessee which is alone specifically named in the regulations; which is alone obligated by contract and which is alone bound by a bond for the benefit of the owner. The .very evident intent and arrangement is to look to the lessee and the lessee alone for the full performance of the lease. The regulations permit sub-leases and assignments or transfers of leases (Regulations, No. 21), but such are invalid unless approved by the department and unless such sublessee, ‘transferee or assignee shall furnish with his conveyance the same kind of bond as required of the original lessee; and “any attempt to sublease, transfer or assign an approved lease or any interest therein without" the consent and approval of the Secretary of the Interior shall be absolutely void and shall subject the original lease to cancellation in the discretion of such Secretary” (Regulations, lío. 21). The Regulations (paragraphs 38-67, inclusive) minutely define the duties of the “lessee” as to operation under the lease. All of such regulations (paragraphs 38-67) would be vain unless the lessee were to be held responsible no matter who did the actual work. That the word “lessee” (repeatedly used in these Regulations respecting operation) was not loosely used is evident from the circumstance that the Regulations had in mind that the actual work of drilling might be done by contract and mot by the lessee direct. The first paragraph (38) under the heading “Duties of Lessees” provides for resident agents of the lessee upon whom notice may be served. This action provides that, in case of the incapacity or absence of the designated agent or substitute, “any employe of the lessee upon the leased premises, or the contractor or other person in charge of drilling or related operations thereon” shall be considered as the agent and service upon “any such employee, contractor or other person shall be deemed service upon the lessee.”
From the preceding considerations, it *97would seem that the lessee was absolutely bound to the performance of those things required by the lease or by the Regulations to which the lease was expressly subject. As paragraphs 45 and 61 (above quoted) required the prevention of the very thing which occasioned the injury complained of here, those duties were such as could not be delegated by the lessee with release of liability.
“Under some circumstances duties are imposed upon one which he cannot delegate to another, and where this is the ease he is liable for their non-pérformance though ho employs an independent contractor to perform the actual work. Thus if a statute or municipal ordinance requires a person to take a certain precaution when work is being done and such precaution is not taken, it is no defense that a contractor was employed to do the work and that the failure to take the precaution was due to the contractor’s negligence. Likewise, if one contracts to do a certain thing, he cannot excuse his failure by saying that he employed another to do it.” 14 R. C. L. 98.
The numerous citations for the above-quoted text abundantly support it. In the present ease, the duty was both enjoined by regulations (with the legal force of statutes) and assumed as obligations in the contract of lease.
I conclude, therefore, that the trial court was right in charging that the defense of independent contractor was not open to the lessee, Midland Oil Company. *
The next contention is that, - even though the defense of independent contractor is not open to the company, yet the use of Osage lands under grazing leases (such as held by plaintiffs) was subordinate to the use of the same land under mineral leases, and, therefore, any injury naturally resulting to the former because of the operation of the latter in the usual, careful way would be without recourse. There is, in my judgment, no basis whatsoever for such position. No statute, departmental regulation nor course of dealing suggests such view. It would certainly require some affirmative showing to establish such an unusual and exceptional proposition.
This leaves for determination the question whether there was an absolute liability for this injury. Obviously, the injury was the result of violation of a positive duty enjoined by the Oklahoma statute (quoted in the majority opinion). I think the judgment below was right and should be
Affirmed.