Cotherman v. Oriental Oil Co.

272 S.W. 616, 1925 Tex. App. LEXIS 423
CourtCourt of Appeals of Texas
DecidedApril 8, 1925
DocketNo. 2451.
StatusPublished
Cited by33 cases

This text of 272 S.W. 616 (Cotherman v. Oriental Oil Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cotherman v. Oriental Oil Co., 272 S.W. 616, 1925 Tex. App. LEXIS 423 (Tex. Ct. App. 1925).

Opinion

JACKSON, J.

This suit was instituted by G. M. Cotherman, .'appelliant,. ¡against the Oriental Oil Company, a corporation, appel-lee, in the district court of Wichita county, Tex., for the recovery of damages in the sum of $9,000, with interest and costs, for the alleged breach of a written contract entered into between the parties on or about November 1, 1922.

Appellant alleges that he was the owner of the oil and gas lease described in the contract, and complied with all of the terms, obligations, and conditions imposed upon him thereby, and that defendant accepted title, entered into possession of the premises, and begun the drilling of. a well under the terms of the contract. He also alleges the conditions and obligations imposed upon appellee by • the terms of said contract, and that appellee agreed to drill an oil well on 10 acres of the land described to the maximum depth of 1,-S50 feet, unless oil or gas in paying quantities was found at a lesser depth; that appellee drilled the well to the approximate depth of 1,775 feet, abandoned all drilling operations, and failed and refused to finish and complete said well to the depth of 1,850 feet, or to oil or gas at a lesser depth, and, notwithstanding appellant’s insistence and demands that it comply with the contract, appellee failed and refused to do so, and that, because of such failure, appellant was damaged in the sum of $9,000, which he was to receive in oil, if oil was discovered on said premises, and that, by- virtue of the breach of the contract by appellee, appellant also lost title to the oil and gas lease, which reverted to Dee and Bellport, the original owners, as his title was dependent upon the compliance by appellee with the drilling obligations imposed in the contract, all of which was well known to appellee.

Appellant alleges as the measure of damages the $9,000 to be paid in oil under the terms, and conditions of the contract, and, in the alternative, the value of the leasehold, which he alleges to be the sum of $9,000.

The contract sued upon was attached to appellant’s petition and made a part thereof, and after giving the date as October 20, 1922, identifying appellant as first party," and appellee as second party, provides that, for the consideration stated, and subject to the terms and conditions thereof, first party agrees to transfer, sell, and assign, and sec; ond party agrees to purchase and pay for the leasehold estate situated in the county of Archer, and describes the land as the west 10 acres of the north 20 acres of the north 30 acres of the East 60 acres of block 17, and the north 30 acres of the east 80 acres of the west 100 acres of said block. The other terms and provisions of said contract necessary to a determination of the issues presented read as follows:

“Second party "agrees to drill a well on the 10-áere tract above described to a maximum depth of 1,850 feet, unless oil'or gas in paying .quantities is found at a lesser depth. In this connection it is specified that the derrick for said well shall be erected within 8 days from this date, October 28, 1922, as herein provided, and second party shall begin actual drilling of said well within 25 days from this date, 28th day of October, 1922, and shall prosecute the drilling thereof with due diligence until said well is completed as herein provided. It is further specified that by the term “paying well,” as heretofore used in this paragraph, if at a depth of more than 1,500 feet, is meant a well which produced 15 barrels or more per day (24 hours), but, at a depth less than 1,500 feet any well producing as much as 5 barrels or more per 24-hour day shall be a paying well.
“It is further specified that second party shall pay all of the cost and expense of every kind and character incidental to the drilling and completing of the aforesaid well, and that said well shall be drilled with rotary tools in a good and workmanlike manner, and in accordance with, the best practices and custom prevailing for tie kind and character of work to be performed, and in accordance with such rules and regulations, state or federal, as may now be in force or may hereafter be lawfully promulgated.
“It is further specified that second party shall carry necessary workmen’s compensation for the protection of employees engagéd in the drilling of said well.
“It is further agreed that, for said assignment to the" property above described, the first party herein shall be paid the sum of $225 per acre for the 40-acre lease above described, which said $225 per acre shall be paid by second party out of seven-sixteenths of the oil or gas produced from said leasehold estate, after the- *618 second party herein has been reimbursed for the actual cost of drilling and completing said .well out of the first seven-eighths of the oil or gas produced from said leasehold estate, which cost shall not in any event exceed a maximum of $3 per lineal foot for said first well. It is the intention of the parties herein that the second party shall receive the actual expense incurred in drilling and completing the first well out of the first seven-eighths of the oil or gas produced from said lease, .and that such payment shall not in any event exceed $3 per lineal foot for said first well, and that, following payment to second party of such amount, first party herein shall then receive all of seven-sixteenths of the oil or gas from said leasehold estate until he has been paid a total sum of $9,000, and after such payment first party shall have no further interest in said lease or leasehold estate.
“It is further agreed that the first party shall deliver to second party with this contract in escrow with Security National Bank of Wichita Palis, Tex,, a valid and bona fide assignment of the leasehold estate above described, to be delivered by said escrow holder to second party upon the completion by second party of a paying oil well as herein described.
“It is-further specified that second party shall comply with each and all of the- terms and provisions of the original lease contract on said property above described, and, particularly, shall pay to the fee owner the sum of $250 per year for each well, where gas only is found and used or sold off of the premises above described, such payment to be made in advance to the fee owner. It is understood that this is one of the provisions of said original lease contract with which second party agtees to comply. * * *
“It is understood and agreed that the consideration moving to first party herein is securing a producing well' on some portion of the lease above described;- and in event of second party’s failure to commence drilling, or to secure such a producing or paying well as herein provided, then all of the -rights acquired hereunder by 'second party shall revert to first party, who, in such event, shall-own and hold the title to said lease and leasehold estate.”

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Bluebook (online)
272 S.W. 616, 1925 Tex. App. LEXIS 423, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cotherman-v-oriental-oil-co-texapp-1925.