Martin v. Darcy

357 S.W.2d 457 (1962)

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Nature of the Case

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Facts

P owned the minerals under 671 by an assignment from Sun Oil Company. Sun's assignment obligated P to 'begin by August 10, 1959, the actual drilling of a well' on the tract. P also held three dry hole contribution letters by which Ohio Oil Company agreed to contribute $6,500, Western Natural Gas Company, $3,150, and El Paso Natural Gas Company, $3,150 toward the drilling of a well. Sun's assignment to P and each of the dry-hole letters to P, prohibited his assignment without prior written consent. P assigned his rights and obligations to D. The assignment described each of the four documents that P had from the four oil companies. D assumed the obligation to drill the well. The contract provided that P would receive $1,500 in the event D completed the well as a producer or $3,500 in the event it was a dry hole. P also retained one-eighth of the oil and other minerals in the property. As part of the deal, P had to send D the consents to the assignment from the four oil companies. On July 31, P wrote each oil company based in Texas and asked for their consents. On August 4, D wrote P, 'Since I do not have letters giving permission for you to assign cannot take the deal as outlined in our letter of agreement.' On August 6, P went to D's office with the consents from Ohio and Western. D refused to examine or consider them. On August 7, P returned to D's office with Sun's consent and a telegram from El Paso, which stated that its consent was already mailed. It was received on August 8. On August 7, P delivered a letter to D with the attached consents from all but El Paso Oil Company, whose telegram was attached. D did not drill the well. It was later drilled by other persons and was completed as a dry hole. P claimed that he was entitled to the contract amount of $3,500 because the well was a dry hole. D claimed that P breached the contract by failing to furnish the consents. P sued D for breach of contract. The jury found that P obtained the required written consents in sufficient time for D, in the exercise of reasonable diligence, to have commenced the actual drilling of the well by August 10, 1959. P was awarded $3500 plus lost profits of $3000. D appealed.