Imperial Refining Co. v. Kanotex Refining Co.

29 F.2d 193 (1928)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Imperial (P) made a written contract with Fern Oil Company whereby P agreed to purchase for one year from Fern all of the oil produced and saved from a certain oil and gas lease owned by the Fern. On the same day, P assigned the contract and all its rights thereunder to the Kanotex (D). After the assignment was made, D, acting under it and under the rights conferred by the contract, caused pipeline connections to be made to the leased premises. After making the pipeline connections, D refused to run the oil then being produced. Fern commenced suit in the state court of Oklahoma against P as the original promisor to recover damages for breach of the contract. P notified D of the suit and requested D to defend the same. D did not employ counsel to defend the suit, yet it did advise with P relative thereto and furnished certain of its employees as witnesses at the trial, and its counsel was present at the trial. P defended the suit with diligence. Judgment was obtained against it in the amount of $18,000 against P. P notified D and D did not pursue an appeal. P paid and satisfied the judgment. P sued D for $18,000 plus attorney fees and costs based on the premise that D was the assignee of the contract. D demurred claiming the contract was invalid for indefiniteness in the description of the leased premises. D also claimed the contract with Fern was void for lack of mutuality, and that, since the contract was void, no obligation in reference to it was assumed by D. The court dismissed and P appealed.