Imperial Refining Co. v. Kanotex Refining Co.

Imperial (plaintiff) had a valid one-year contract to purchase all of Fern's oil at a fixed price and quantity, then assigned that contract to Kanotex (defendant), whose own agreement with Imperial required Kanotex to connect its pipeline to Fern's tanks and pay Imperial 10 cents per barrel purchased from Fern; Kanotex connected its pipeline but then refused to buy any of Fern's oil, causing Fern to sue and win an $18,000 judgment against Imperial, which Imperial paid after Kanotex ignored its request to cover the judgment. Imperial then sued Kanotex to recover the $18,000 plus costs, arguing Kanotex, as assignee, had assumed Imperial's duty to purchase Fern's oil; the trial court dismissed the case, and Kanotex argued on appeal that the underlying Imperial-Fern contract lacked mutuality and created no duty running to Imperial.