Baker & Taylor Drilling Co. v. R. W. Stafford, Trustee

Appellee Stafford is the Trustee in reorganization of Tri-State Petroleum, Inc.; Appellant Baker and Taylor Drilling Company has filed a mechanics lien against a Texas gas well in which appel-lee claims an undivided interest on behalf of Tri-State. J. D. Amend also owns an undivided interest in the gas well in question, which is referred to as the Wilbanks Well, or the Section 2 well.

Baker & Taylor Drilling Company drilled the Wilbanks well and its lien is for approximately $27,000.00 which it claims is due for part of the drilling costs. While the Wilbanks well was being drilled, Baker & Taylor received three $20,000.00 checks from Tri-State, but it applied about $30,000.00 of that $60,000.00 to a pre-existing debt that Tri-State owed Baker & Taylor, as the balance due for drilling costs of a “dry hole” (referred to as the Nusbaum well or Section 54 well). The trustee claims that Baker & Taylor should have applied the full $60,000.00 to the cost of drilling the Wilbanks well.

Baker & Taylor has preserved its objection to the jurisdiction of the Court over the subject matter of the dispute and over Baker & Taylor as a party.

During 1962 Tri-State entered into a series of…