United Central Oil Corporation v. Helm
| Decision Date | 24 February 1926 |
| Docket Number | No. 4562.,4562. |
| Citation | 11 F.2d 760 |
| Parties | UNITED CENTRAL OIL CORPORATION v. HELM. |
| Court | U.S. Court of Appeals — Fifth Circuit |
H. F. Montgomery, of Houston, Tex., and L. P. Bryant, Jr., and R. M. Rowland, both of Fort Worth, Tex., for plaintiff in error.
Paul Carrington, of Dallas, Tex. , for defendant in error.
Before WALKER, BRYAN, and FOSTER, Circuit Judges.
This is a writ of error sued out to reverse a judgment awarding $15,256.96 as damages for breach of an oil-drilling contract. Error is assigned to the refusal to direct a verdict for defendant at the close of the case. Other errors assigned need not be considered. The parties will be referred to as they appeared in the District Court. There is no dispute as to the material facts, which are these:
Defendant in error, plaintiff below, was the holder by assignment of a lease of about 40 acres of land in Eastland county, Tex. Briefly stated, the lease granted the exclusive right to the lessee to exploit the land, drilling and operating thereon, for gas, oil, and other minerals, together with the rights incidental thereto, for a period of four years, but without any obligation on the lessee to begin operations at any time, or in fact to drill a well at all. The lease provided that, if oil, gas, or other minerals were found in paying quantities, the lessor was to have a royalty of one-eighth therein.
The lease had about two years to run, and plaintiff assigned it to the White Oil Corporation, which was thereafter succeeded by the plaintiff in error, defendant below. The contract between plaintiff and defendant referred to the lease, and defendant agreed to pay plaintiff $60,280.25 for same, one-half cash and the balance "out of the first one-half of all the oil or gas produced and saved from said lease, or the proceeds thereof, saving and excepting the one-eighth royalty reserved to the owner of the fee in the original lease." This contract further provided that the defendant should commence the drilling of a well within 37 days from date thereof (June 4, 1920), and drill the same with due diligence to completion. In the event of default in the drilling, the cash payment of $30,140.42 was to be retained as liquidated damages and the lease reassigned to plaintiff.
In accordance with the contracts, defendant drilled a well on the property within the time specified, carrying it down some 3,300 feet, but it proved to be a dry hole. After that another well was drilled to a depth of about 3,800 feet, and this well produced oil. In August, 1924, the production of this well had fallen to about 7 or 8 barrels a day, valued at $2 per barrel. On August 8th it was plugged and abandoned. Plaintiff received the cash consideration stipulated, and received payment for his share of all the oil produced from the well.
It is the contention of plaintiff that a proper construction of the contract is that, oil in paying quantities having been found, the obligation to pay him the full balance of $30,142.42, expressed in the contract, became absolute and payable at all events. To support this he relies mainly on the case of Empire Gas & Fuel Co. v. Pendar (Tex. Civ. App.) 244 S. W. 184. The principle announced in that case conforms to the general rule and is applicable to this case, but the facts are materially different. There the suit was by the owner of the land, who had granted a lease to the defendant, who had agreed to pay $60,000 in full, $5,000 cash, $25,000 in notes, with varying maturities, and the sum of $30,000 in oil from the leased premises, if the same was produced....
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Ebberts v. Carpenter Production Co.
...which prevented the occurrence of a condition would have the same consequence as the promisor's willful conduct. United Central Oil Corp. v. Helm, 5 Cir., 11 F.2d 760. Discharge of the condition (at least in effect) by the promisor's act making the occurrence of the condition impossible has......
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Atlantic Refining Co. v. Moxley, 14676.
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Bomar Oil & Gas, Inc. v. Loyd, No. 10-08-00016-CV (Tex. App. 7/15/2009)
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