Humble Oil & Refining Company v. Kishi

276 S.W. 190 (1925)

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Nature of the Case

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Facts

P, the owner of all the surface and three-fourths undivided interest in the oil and mineral rights, and Isaac Lang, the owner of the remaining one-fourth interest in the oil and mineral rights of 50 acres of land executed a lease granting D the exclusive right to enter upon said land and drill oil wells and take therefrom the oil. The lease was to remain in force for no longer period than three years from its date, unless within said three years drilling for oil was commenced. No drilling was begun and the lease expired. In January 1923, oil was found on an adjoining tract of land in a well drilled near P's acres. On January 23, 1923, D entered upon this 50 acres of land and began drilling an oil well claiming the exclusive right to the leasehold interest therein. It claimed that the lease had not expired and that under its terms it did not expire until three years after it was signed and acknowledged by Lang and delivered. P protested against this entry and advised D that he would hold it responsible for any damages that might accrue to him. Lang consented to the entry under the claim made. In January 1923, oil was found on an adjoining tract of land in a well drilled near P's acres. On January 23, 1923, D entered upon this 50 acres of land and began drilling an oil well claiming the exclusive right to the leasehold interest therein. It claimed that the lease had not expired and that under its terms it did not expire until three years after it was signed and acknowledged by Lang and delivered. P protested against this entry and advised D that he would hold it responsible for any damages that might accrue to him. Lang consented to the entry under the claim made. The well failed to produce. D relinquished possession on May 10, 1923. As a result of the discovery of oil on the adjoining tract of land, the leasehold interest in the 50-acre tract was of the market value of $1000 per acre. At the time D relinquished possession, the leasehold interest had no value by reason of the failure to find oil on this tract. P sued D and the court awarded P $1.00 holding that the amount of damages sustained by him was uncertain and not susceptible of proof. On appeal, the court held that D was entitled to recover the actual damages which was the value to him of his three-fourths undivided leasehold interest, but that proof of the market value of the entire leasehold interest was not in law sufficient upon which to base the amount of his recovery. P appealed.