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Martin v. Darcy

Texas Court of Civil Appeals
357 S.W.2d 457 (Tex. Civ. App. 1962)


Facts

Harris Darcy (plaintiff) was assigned minerals under a tract of land by four companies subject to a requirement that he commence drilling by August 10, 1959. The assignments required that Darcy get the assignors’ consent before he reassigned his assigned interest. On July 29, Darcy signed a farmout agreement with Glen Martin (defendant), under which Martin assumed the obligation to drill. The agreement provided that Darcy would retain a royalty on produced minerals, or would be paid $3500 if the drilling resulted in a dry hole. On July 31, Darcy wrote the four companies seeking consent to assign his interest to Martin. On August 4, Martin backed out of the agreement, citing Darcy’s failure to provide consent letters. Darcy received all four consent letters by August 8, but Martin refused to drill. There was evidence that Martin could have begun the drilling process on the 8th and still commenced drilling by the 10th. Another party completed the well, which turned out to be a dry hole, for Darcy. Darcy brought suit against Martin for breach of contract. The trial court awarded Darcy $3500 for the dry hole as provided for in the contract, and $3000 in lost profits based on Darcy’s claim that he had a tentative deal to sell one-half of his retained royalty for $3000. Martin appealed.

Rule of Law

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Issue

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Holding and Reasoning (Pope, J.)

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