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Imperial Refining Co. v. Kanotex Refining Co.

United States Court of Appeals for the Eighth Circuit
29 F.2d 193 (1928)


Facts

Imperial Refining Company (Imperial) (plaintiff) entered into a contract with Fern Oil Company (Fern) to purchase all the oil that Fern’s oil wells would produce over the period of one year. Imperial assigned its contract with Fern to Kanotex Refining Company (Kanotex) (defendant). The contract between Fern and Kanotex required Kanotex to connect its pipeline to oil tanks operated by Fern. Additionally, the contract obligated Fern to pay Imperial 10 cents per barrel for the oil that Kanotex purchased from Fern. Kanotex connected its pipeline to Fern’s tanks, but then refused to take or purchase any of Fern’s oil. Fern sued Imperial for breach of contract, winning $18,000 in damages. Imperial notified Kanotex of the judgment and requested that Kanotex pay the $18,000 to Fern. When Kanotex disregarded Imperial’s notice, Imperial paid the judgment. Imperial then sued Kanotex for $18,000 plus attorney’s fees and costs, alleging that as assignee Kanotex had the same obligations to Fern as Imperial had to Fern. The trial court dismissed the case. On appeal, Kanotex argued that Imperial’s contract with Fern was invalid because it lacked mutuality, and that Kanotex had no duty to Imperial to carry out the terms of Imperial’s contract with Fern.

Rule of Law

Issue

Holding and Reasoning (Booth, J.)

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