Court Opinion

ID: 9638190
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:37:04.400774+00
Date Added: 2024-06-11T18:10:04.711456
License: Public Domain

SYMES, District Judge
(dissenting).
I regret I am unable to concur with that part of the opinion of the court that decrees specific performance against the appellee, appellant, the Continental Oil Company.
Referring to the detailed statement of facts in the opinion, and without repeating the same, I am of the opinion that the meager negotiations between the parties in question did not result in any so-called “verbal agreements,” and that the same is not established. The Continental Oil Company and the Osage Company were strangers; no contract relations existed between them, and their respective interests were hostile, the Continental Oil Company having derived its title through Mamie Axelrod. This is the title which the Osage Company directly contested.
• When it appeared that litigation would ensue, the Continental Company, without requiring any of the parties to change their position, offered in exchange for the possession of the tract in question to conduct all proper drilling operations thereon, develop it, and hold the proceeds to abide by the event. This offer was declined by the Osage Company, so it cannot be heard to complain of any losses, etc., due to drainage or delay. An offer once refused is at an end, and the offeree cannot be compelled to keep it open.
It may be true that the Continental Company drained this property; but, if so, it did only what it had a right to do as owners of the adjoining property, and what any good oil operator would have done under the circumstances. It simply continued to protect its investment in its own tract, and the fact that it later became interested in the adjoining property did not require it to risk its other investment.
It is true that the Continental Company objects to giving up the $50,000 placed in escrow, contrary to its former expressed willingness so to do. This changed position is, however, justified by subsequent events, to wit, the wide fluctuation in the price of oil, uncertainty of drilling operations, etc. Further, at no time could it count upon obtaining a good title. Texas Co. v. Herring (C. C. A.) 19 F.(2d) 56. Neither the Osage Company nor the court had been able at any time to give a good title, and the decree entered below, and affirmed here, is in this respect conditional, and not absolute, and even after this decision is rendered the Continental Company cannot tell where it stands with any certainty. At no time has, or could, a tender be made by the other party. In Enge-moen v. Rea et al. (C. C. A.) 26 F.(2d) 576, this court said (page 578):
“A "court of equity will not ordinarily decree specific performance when it cannot dispose of the matter in controversy by a decree capable of present performance. It will not as a general rule enjoin a breach of a contract where to render its decree effective it would have to give continuous supervision and direction to the matters involved over a long period of time.”
In Pomeroy’s Equity Jurisprudence (2d Ed.) vol. 5, § 2280, it is said: “It is a familiar application of the principle as to performance by the plaintiff, that the vendor or lessor cannot force performance upon the purchaser, unless he is able to give a good title to the subject-matter.”
The Continental did not pray for relief against Axelrod, but only against the Osage Company. There was no contract relation between them, so on what equitable ground can specific performance be decreed? The Osage Company did not offer to turn the property over, or ask for any specific performance in its original bill. The offer so to do was contained in its reply, so it likewise has changed its position in the midst of litigation, and likewise might have been influenced by change in conditions in the price of oil.
In dealing with similar situations arising in the oil industry, this court has always recognized the hazard involved, that values are fluctuating, and parties must act promptly. Texas Co. v. Herring, supra. As pointed out, both the Osage and the Continental have alternately opposed and asked for specific performance when, and to the extent, that it *732was to their advantage so to do, changing their respective positions as conditions changed.
If the original offer of the Continental Company had been accepted, the property would have been developed, and a considerable sum of money accumulated to await the outcome of the litigation. This proposition would have inured to the benefit of all parties, irrespective of the final outcome of the litigation.
Specific performance is a matter of discretion, and never of right. Story’s Equity Jurisprudence (14th Ed.) vol. 2, § 1026. It is available only to better enforce under proper circumstances rights arising out of contracts. This necessitates, of course, the presence of a binding contract as a condition precedent, although the mere existence of a legal contract is not alone sufficient to call forth this equitable remedy. It is a fundamental principle (25 R. C. L. 207), that equity will not decree specific performance of a contract not founded upon a valuable consideration, moving from the party in whose behalf performance is sought. In the instant case, what consideration passed from the Osage Company to the Continental?
Another factor in respect to specific performance is that it will not be decreed where the contract is not certain in its terms, and must be free from doubt, and make the precise act which is to be done clearly ascertainable.
In an English case, Wheatley v. West-minister Brym Coal Co., L. R. 9 Equity, 538, it was held that specific performance is not ordinarily awarded against the lessee under a mining lease, because all that the lessor is entitled to is payment of rent. While the fact that the value of the property which is subject to the contract increases or diminishes, does not excuse performance, yet it is a circumstance sometimes sufficient to justify the court in denying specific performance. Texas Co. v. Herring, supra. The court, under .the terms of the decree affirmed, must supervise the operation of the lease, must see that the plaintiff co-operates and assists the Continental Company in appearing before the Secretary of the Interior, and undertake other duties not ordinarily assumed by a chancellor.
Further, specific performance will not be decreed when performance depends on the consent of a third person who is at liberty to withhold his consent. Pomeroy’s Equity Jurisprudence, vol. 5 (2d Ed.) § 2178, p. 4890; Ellis v. Treat (C. C. A.) 236 F. 120.