Schlegel v. Moorhead

553 P.2d 1009 (Mont. 1976)

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Nature of the Case

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Facts

Moorehead (D) owned an oil lease. D had little experience with the business end of oil operations, but he had worked in the fields for almost 30 years. D had no previous experience with options. D has twice attempted to sell his leases with no success. At no time did D attempt to make any effort to learn about the oil field developments around him. Schlegel (P) learned that an oil company had two producing wells that indicated there were significant amounts of oil near D's leasehold. P did this by doing his homework and investigating local commissions and meeting with a geologist. P even examined public records. P offered to purchase D's leasehold for $5,000 under a 90-day option. When D asked why P wanted the well, P stated that he had a general interest in the area, but he did not reveal the other oil discoveries. P tried to exercise the option and D refused to convey the well. P sued for specific performance. The court refused to grant specific performance on grounds of inadequate consideration, misrepresentation, concealment, and unfair practices. P appealed.