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Stonestreet v. Southern Oil

Supreme Court of North Carolina
226 N.C. 261, 37 S.E.2d 676 (1946)


Stonestreet (plaintiff) leased a lot to Southern Oil (defendant) for use as a filling station. Under the lease, Southern Oil had an option to purchase the premises from Stonestreet. The lease also stated that if the existing water supply to the lot was insufficient, Southern Oil would be responsible for securing additional water. The water supply was insufficient. Consequently, Southern Oil and Stonestreet, pursuant to a separate written agreement between them, hired someone to drill a well on the premises, each paying one-half of the cost. Southern Oil promised Stonestreet that if Southern Oil exercised the option to buy the premises, then Southern Oil would repay Stonestreet’s half of the well-drilling cost. Southern Oil’s promise to reimburse Stonestreet was not contained in either the lease or the written well-drilling agreement between Southern Oil and Stonestreet. Southern Oil exercised its option and purchased the premises, but did not reimburse Stonestreet for the drilling costs. Stonestreet sued Southern Oil for that amount. The trial court entered judgment in favor of Stonestreet. Southern Oil appealed.

Rule of Law


Holding and Reasoning (Stacy, C.J.)

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