Nature of the Case
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Facts
Crystal Oil Co. owned certain leases. Crystal executed a farmout agreement of these leases with D on May 4, 1982. The terms of the farmout required D, at his expense, to drill a test well by May 15, 1982, and continue drilling to a depth sufficient to test the Cotton Valley Formation. If production was obtained, Crystal was required to assign D an interest in the leasehold estate. Crystal reserved an overriding royalty interest. If the first well was drilled, the agreement gave D the option to drill additional wells on the remaining acreage. The agreement was extended until July 15, 1982. D paid no consideration for this farmout. D then entered into an agreement with Bruce Massey whereby Massey would pay D $50,000 in exchange for D assigning to Massey his right to the leasehold estate under the Crystal-Dews agreement and subject to the terms of the Crystal-Dews agreement. D reserved 5% of the leasehold estate as an overriding royalty interest. Massey agreed in return to cause the well to be drilled as required by the Crystal-Dews farmout agreement. The well was completed as a producing well on November 14, 1982. Ps, all of the claimants in this case were hired by Massey to supply labor or material for drilling the well. D received his assignment of leases from Crystal. D never assigned his right to Massey pursuant to their agreement, because Massey never paid D the $50,000 in a manner satisfactory to D. D knew this would leave Massey unable to pay the subcontractors. Ps filed suit against Massey to collect the money owed to them. D was brought in as a party defendant and D then cross-claimed against all of the companies. The chancellor found that Massey and D were jointly and severally liable for the companies' claims. Each company was awarded a money judgment, for a total of $519,397.60 plus interest. D appealed.
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