THE CALUMET COMPANY
v.
OIL CITY CORP.
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The Florida Supreme Court affirmed dismissal of a bill for specific performance of an oil and gas drilling contract, holding that equity will not enforce specific performance against a driller when the contract requires ongoing personal supervision and discretionary judgment that courts cannot adequately monitor.
Specific performance will not be enforced against a driller in an oil well contract requiring continued supervision and discretionary performance, absent full performance or legally equivalent tender of performance by the complainant. The lack of mutuality of equitable remedies—where the driller's obligation cannot be specifically enforced against him—bars specific performance against the other party.
“Where the main object of a contract is to secure the development of land by the drilling of test wells for oil and gas on it, to the end that it may be determined whether the land contains oil or gas, and where the nature and character of the drilling to be done is left almost entirely to the good faith, judgment, discretion and skill of the one undertaking to drill the test wells contracted for, so the performance of the contract requires some personal supervision that will extend over a considerable period of time, such contract insofar as it affects the contracting driller, is incapable of specific performance by decree against him, because of the inability of the court to undertake supervision of performance of such a contract.”
Establishes the core principle that oil well drilling contracts requiring discretionary judgment and supervision cannot be specifically enforced.
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Join FLexlaw to unlock all legal intelligenceOn January 7, 1932, Oil City Corporation and Calumet Company entered into a contract where Calumet agreed to drill a second test well for oil and gas …
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— On January 7, 1932,.an agreement in writing was entered into between Oil City Corporation on the one part and Calumet Company on the other, in which it was recited that the Oil City Corporation being engaged in prospecting for oil and gas in Walton County, and being the owner of a large number of oil and gas leases on large tracts of land lying south of DeFuniak Springs, had already drilled a certain well designated as' No. 1, located at or near Rock Hill and was desirous of having a second test well for oil and gas started in the area then under lease by it at or near the “Oil Camp site of Antioch, Walton County, Florida,” and that Calumet Company, being ready and willing to undertake the drilling of said second test well, agreed, bound and obligated itself to begin drilling operations on said second test well within twenty days from the date of contract.
According to the terms of the agreement, the well was' *533to be commenced at a location to be selected by the Calumet Company on a block of leases to be assigned by the Oil City Corporation to Calumet Company, it being agreed that Oil City Corporation would assign to said Calumet Company an oil and gas lease on four (4) one hundred and sixty (160) acre tracts, each of which was to be located within one mile of the number 1 well that had been driven, said lease assignments to be placed in escrow in the First National Bank of DeFuniak Springs to be delivered to the drilling company and to become its property when actual drilling should be begun on the second well.
The Calumet Company alleging that it had, in accordance with the terms of the contract, selected the one square mile site for its drilling operations as to the second well and had duly notified Oil City Corporation thereof, and having employed laborers, purchased and placed on the site a derrick and other materials necessary for starting the well, including the purchase of deep-drilling oil-well machinery, and having negotiated for the drilling of the well and made its commitments and other arrangements, on the faith of the oil company’s contract to assign the leases hereinbefore referred to, and to place them in escrow with the bank as aforesaid, brought suit for specific performance of the contract with respect to the making and escrowing of the assignments, which promise it alleged defendant had failed and refused to carry out and perform for complainant’s benefit.
On demurrer to the bill (interposed under the old chancery practice) the bill was held to be without equity and the complaint was dismissed.
So the proposition to be decided on this appeal is whether or not there is equity in a bill in chancery brought for specific performance of an oil and gas well drilling and *534prospecting contract, whose terms and provisions, so far as complainant is concerned, are not capable of being required to be specifically performed, because they are largely of an individual service character and require some personal supervision extending over a considerable period of time.
Where the main object of a contract is to secure the development of land by the drilling of test wells for oil and gas on it, to the end that it may be determined whether the land contains oil or gas, and where the nature and character of the drilling to be done is left almost entirely to the good faith, judgment, discretion and skill of the one undertaking to drill the test wells contracted for, so the performance of the contract requires some personal supervision that will extend over a considerable period of time, such contract insofar as it affects the contracting driller, is incapable of specific performance by decree against him, because of the inability of the court to undertake supervision of performance of such a contract.
So a contract for the drilling of an oil well, where the details of its execution are left to the judgment and skill of the driller, will not ordinarily be specifically enforced against the party contracting to drill, where continued supervision is required. Los Angeles & Bakerfield Oil & Development Co. of Arizona v. Occidental Oil Co., 144 Cal. 528, 78 Pac. Rep. 25; Texas Pacific Coal & Oil Co. v. Barker (Texas Civ. App.), 252 S. W. Rep. 809; Caddo Oil & Mining Co. v. Producers’ Oil Co., 134 La. 701, 64 Sou. Rep. 684; Rich v. Donaghey, 71 Okla. 204, 177 Pac. Rep. 86, 3 A. L. R. 352; Olive v. Fayette County, 219 Ala. 172, 121 Sou. Rep. 703.
In the present case it was not made to appear in complainant’s bill of complaint that complainant had already drilled the well contracted for. So the principal considera*535tion for the agreement was still unexecuted on complainant’s part at the time the present suit was brought with reference to the agreement to assign and escrow the leases.
In Clark v. Andrew, 11 Fed. (2nd) 958, recently cited with approval by this Court in Yale Investment Co. v. Williams, 105 Fla. 414, 141 Sou. Rep. 308, the United States Circuit Court of Appeals of the Fifth Circuit held that before specific performance of any agreement is authorized, there must be mutuality of remedy in equity at the time of the filing of the complainanfs bill, else specific performance should be denied. To the same effect is our own case of Gautier v. Bradway, 87 Fla. 193, 99 Sou. Rep. 879.
The fact that the contract itself may not be void for want of mutuality of obligation, as distinguished from want of mutuality of corresponding remedies in equity, is immaterial. The test is whether at the time the suit for specific performance is brought, there is a recognizable mutuality of remedies' in equity between the parties to the suit as a basis for awarding specific performance in equity to the party complainant as against the party defendant. If there •is no such mutuality of equitable remedies, although there may be mutuality of obligation of ‘contract, specific performance will ordinarily be denied unless the contract has been fully performed on one side.
The instant appeal must be decided on the principle that equity will not enforce specific performance of a contract as against the defendant unless the complainant has either already performed all that is to be done on his part, or has placed himself in a situation where he can be compelled specifically to perform his side of the contract sued on, all of which must be made to appear in complainant’s bill of complaint. Clark v. Andrew, supra.
While a tender of performance may be the legal equivalent *536of actual performance, as was held in the case of Clark v. Andrew, just cited, such tender of performance must be of such character that it amounts to a substantial performance of all that complainant is required to do on his part. But unless it is an efficient tender, i. e., is the legal equivalent of complete performance on complainant’s part of all that he is required to do in order to discharge his own undertakings under the agreement, specific performance of an executory provision of a contract, based upon a mere tender of performance of complainant’s part, is not authorized as against the opposite party, unless the tender as made is the legal equivalent of actual performance.
. In this case it appears by the complainant’s own allegations that, by reason of the nature of appellant’s unperformed obligation to drill the oil well contracted for, appellant could not, at the time the present suit was filed, have been decreed to specifically perform its side of the contract it sought by its suit to specifically enforce against the opposite party. For this reason such bill of complaint was properly held to be without equity and was therefore properly ordered to be dismissed.
The decree appealed from is affirmed, but without prejudice to the right of appellant to seek appropriate redress other than specific performance, if it conceives that its contractual rights have been violated by appellee in the particulars complained of in the present proceeding as' a basis for its prayer for specific performance.
Affirmed.
Whitfield, Terrell and Buford, J. J., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By (13 total)
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Craven v. Trg-Boynton Beach, Ltd., 925 So. 2d 476 (Fla. 4th DCA 2006)…on the damages claim, it properly ruled that specific performance was not available because such relief would require the court to become inextricably intertwined with the project’s development. In the seminal case of Calumet Co. v. Oil City Corp., 114 Fla. 531, 154 So. 141, 142 (1934), the Florida Supreme Court explained: Where the main object of a contract is to secure the development of land by the drilling of test well (sic) for oil and gas on it, to the end that it may be determined whether the land…
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Howard Cole & Co., Inc. v. Sallie Williams and Zibe Williams and Executor of the Last Will and Testament of F. H. Williams, 157 Fla. 851 (Fla. 1946)…obligation to perform his part of the contract expired by reason of his failure to give notice of the extension of the contract on or before April 22, 1945. See Bucholtz v. Kuckler, 117 Fla. 749, 158 So. 290; Calumet Company v. Oil City Corporation, 114 Fla. 531, 154 So. 141. We recognize the rule that the granting or withholding of a decree for specific performance rests largely in the discretion of the Chancellor but the right to exercise this judicial discretion does not extend to the power or authority…
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Thompson v. Shell Petroleum Corp., 130 Fla. 652 (Fla. 1938)…n thus controlled his decision will not be disturbed on appeal, unless clearly erroneous. See also in this general connection Massari v. Salciccia, 102 Fla. 847, 136 So. 522; Booth v. Babbit, 114 So. 513, 94 Fla. 704; Calumet Co. v. Oil City Corp’n, 114 Fla. 531, 154 So.. 141. The decree appealed from is accordingly affirmed. Whitfield, P. J., and Chapman, J., concur. Ellis, C. J., and Terrell and Buford, J. J., concur in the opinion and judgment.…
Previewing 3 of 13 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Gautier v. Bradway, 87 Fla. 193 (Fla. 1924)
- Yale Inv. Co. v. Williams, 105 Fla. 414 (Fla. 1932)