Procedural Posture

Procedural Posture

Defendants, subsequent oil producer and gasoline company, challenged the judgment of the Superior Court of Los Angeles County (California), which awarded plaintiff purchaser and intervenor assignors a permanent injunction and damages against defendants based on a contract for the purchase of oil.

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Overview

The purchaser entered a contract with the oil producer for the purchaser of crude oil. The oil producer assigned a portion of the proceeds to the assignor. The oil producer sold the property to the subsequent oil producer after he failed to develop oil. The subsequent oil producer executed a contract with the gasoline company for the sale of the oil. The purchaser and the assignor argued that subsequent oil producer was insolvent and that its failure to abide by the terms of their contract would result in irreparable damage to them. On appeal, defendants insisted that the purchaser failed to present a case for equitable relief upon the contract because the contract did not create an interest in real property and it the purchaser had an adequate remedy at law for damages for the breach. The court found that the contract did not convey any interest in the real property but was merely a contract to sell personal property. Therefore, the purchaser was not entitled to equitable relief because it had an adequate remedy at law and the contract was not subject to specific enforcement. The assignors had no place in the litigation at any stage of the proceeding.

Outcome

The judgment was reversed.