Dempsey Oil v. Hussey Whelan

The court concluded, and that conclusion is assailed by appellant, that under the facts proven the appellant should be held liable to pay for the gas used in drilling the well the distance between 2,340 and 2,500 feet, been use of the express promise at the time of the appellant to pay for the gas so used. The appellant urges that even if the Dempsey Oil Company, Limited, promised to pay for the gas so used, it would be without consideration and not legally binding. As found by the court the appellant promised to pay for the gas used in drilling the well the 160 feet in controversy at the time and under the following circumstances, viz.:

"Upon reaching the depth of 2,340 feet a disagreement arose between the contracting parties as to whether the oil which was actually struck at that depth, was in paying quantities as contemplated by the drilling contract."

The appellees were insisting at the time that oil in paying quantities was reached at the 2,340 feet, and the appellant was insisting that oil in paying quantities was not struck at the 2,340 feet drilled. The appellees refused to furnish any more gas to drill the well deeper than the 2,340 feet, because of their insistence that oil in paying quantities was already reached, and the drilling was shut down on that account The appellant wanted to continue drilling the well to the 2,500 feet depth. Under the contract the appellant was to drill the well 2,500 feet deep "unless oil in paying quantities shall be found at a lesser depth." And under the contract the appellees were to furnish "all fuel necessary for the drilling of the first well." Therefore as between the parties the contract would be fully performed according to its terms in either of two events: (1) When the well was drilled 2,500 feet deep; or (2) when "oil in paying quantities shall be found at a lesser depth." If "oil in paying quantities" was struck at a lesser depth than 2,500 feet, then the appellees were not obligated to furnish any more fuel for drilling. The appellees, having an interest in the well and oil, had also the legal right to have the well as it stood continued, producing "oil in paying quantities." The disagreement, then, between the contracting parties was not, as it appears here, an utterly groundless and unfounded controversy as to the full performance of the contract. Even though ultimately, if so, the contention so made by the appellees could not have legally prevailed, yet nevertheless there existed at the time of the promise by appellant a reasonable opposition made in apparent good faith by appellees and in the exercise of a contractual right to drilling the well any deeper than the 2.340 feet. The rule is well established, it is true, that where a legal obligation exists a cumulative promise to perform it, unless upon a new consideration, is a nullity. A promise cannot be conditioned on a promise to do a thing to which a party is already legally bound. But the facts, as found by the court, legally furnish a new consideration for the agreement, and not merely a cumulative promise to perform the old contract. A sufficient consideration for the promise of the appellant to itself pay for the gas used to drill the well on to the depth of 2,500 feet was shown when it was made to appear that the appellees agreed to forego their determination to insist and to forbear the exercise of their contractual right to claim that "oil in paying quantities" had already been reached in return for the promise of appellant to pay for all fuel necessary to drill the well deeper. Page on Contracts, § 286; 9 Cyc. pp. 323, and 335; 13 C.J. p. 342; 1 Elliott on Contracts, § 234.

The appellant, however, was not liable for the $28.27 paid by appellees, because the gas bill was not promptly paid when due. That amount is in the nature of a penalty, outside the terms of the contract between the parties to this suit. The duty of the appellees was to pay promptly the gas bill, and then demand payment by appellant to them.

A foreclosure of the attachment lien was not necessary to support a judgment against the sureties on the replevin bond, and judgment on the replevin bond follows after a judgment against their principal. Vogt v. Dorsey, 85 Tex. 90, 19 S.W. 1033; Tripplett v. Hendricks (Tex.Civ.App.)212 S.W. 754.

The judgment is modified so as to eliminate a recovery for $28.27, and as so modified is in all things affirmed. The appellees will pay costs of the appeal.