Moore v. Bartholomae Corp.

California Court of Appeal Jun 4, 1945 No. Civ. 14725Published

Before: McCOMB

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Holding. The court held that the reconditioning of an existing oil well did not constitute the drilling of a new well, and that the defendant's payment of royalties already owed under the lease did not establish an account stated or an accord and satisfaction.

Issues

Was there substantial evidence to support the finding that work on the well did not constitute the drilling of a new or additional well?
Was there substantial evidence to support the finding that there was not a series of accounts stated between the parties?
Was there an accord and satisfaction between the parties?

Disposition. affirmed

Quotations verified verbatim against the opinion

“The balance of the work constituted merely redrilling and reconditioning of an existing well.”

“The law is established in California that a debt which is predicated upon the breach of the terms of an express contract cannot be the basis of an account stated.”

“neither a promise to perform a duty nor the performance of a duty constitutes a consideration sufficient to support a new contract.”

McCOMB, J.

This is an appeal from a judgment in favor of plaintiffs, after trial before the court without a jury, in a declaratory relief action instituted for the purpose of construing a provision in an oil and gas lease.

The undisputed facts are these:

On March 28, 1923, plaintiffs leased to defendant a parcel of land in the city of Long Beach located in the Signal Hill oil field. The lease was for the purpose of permitting defendant to drill an oil well upon the demised premises and only required defendant to drill one well upon the property. Defendant agreed to pay a royalty of one-fifth of the oil recovered to plaintiffs pursuant to the terms of the lease. De

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fendant drilled a well known as Bartholomae #3 and placed the same upon production.

A few years later there was discovered in the Signal Hill oil field a sand deeper than the one from which Bartholomae #3 was producing. It was claimed that this sand was more productive than the higher one. Plaintiffs insisted that defendant drill a well into the deeper zone or allow them to do so. This contention on the part of plaintiffs resulted in an action being filed by them against defendant.

The litigation was compromised by an agreement of the parties, dated November 9, 1928, which so far as material here provided that (a) an additional well was to be drilled by defendant to the deeper sand and upon completion thereof the royalty on Bartholomae #3 and the additional well was to be reduced to one-sixth, and (b) defendant was granted the privilege of electing to drill wells in addition to the two hereinbefore mentioned and upon completion thereof and their being placed upon production the royalty upon all wells then drilled or thereafter drilled upon the demised premises should be “one-eighth (%) royalty and no more.”

Subsequent to November 9, 1928, (a) defendant drilled and placed on production in the deeper sand a well known as Bartholomae #6, whereupon the royalty was reduced on #3 and #6 to one-sixth; (b) commencing March 12, 1940, defendant performed work on Bartholomae #3 which may be summarized as follows:

The well was on production at 3,520 to 3,580 feet. The 4%-inch casing was cut at 2,800 feet and pulled. The Sc-inch and the 6

Moore v. Bartholomae Corp.

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