## Facts

- Kichimatsu Kishi owned the surface estate and an undivided three-fourths mineral interest in a 50-acre tract in the Orange oil field in Texas; Humble Oil & Refining Company owned the remaining one-fourth mineral interest.
- On December 23, 1919, Kishi executed an exclusive oil-and-gas lease to Humble with a three-year primary term.
- Humble did not drill within the three-year term.
- A producing well was completed on adjacent land about 150 feet from the tract on January 22, 1923, increasing demand for leases in the area.
- The next day Humble moved a rig onto the tract and began drilling, asserting the lease term began later (upon a co-owner’s delivery of a signed counterpart) and was still effective.
- Kishi objected, warned Humble it would be liable for damages, and maintained Humble lacked the right to exclusive possession and development.
- Humble completed a dry hole and relinquished possession on May 10, 1923; Kishi claimed the tract’s lease value had been lost during the period of wrongful possession.
- Kishi sued for trespass and damages measured by the market value of a lease he alleged he could have made at the time Humble took and held exclusive possession.

## Issues

1. Whether the lease primary term ran from the date stated on the instrument, such that the lease had expired before Humble entered and drilled, making Humble a trespasser.
2. Whether a mineral owner wrongfully ousted by an expired lessee may recover actual damages measured by the market value of a lost third-party leasing opportunity.
3. Whether evidence of contemporaneous lease-market value (rather than expected production) was legally sufficient to support a substantial damages award.

## Decision

- The court treated the lease term as running from the date the instrument bore, so the primary term expired before Humble’s January 1923 entry.
- Humble’s post-expiration entry and assertion of exclusive development rights constituted trespass and wrongful ouster of Kishi.
- Kishi was not limited to nominal damages; he could recover actual damages tied to the proven market value of a lease he was prevented from making due to Humble’s wrongful exclusive possession.
- On remand after prior appellate guidance, judgment was entered for Kishi for $28,125, and the writ was refused, leaving the judgment final.

## Legal Principles

- Absent contrary language, a fixed-term oil-and-gas lease runs from the date it bears, not from a later delivery date by another party.
- A former lessee who reenters or remains after lease expiration while asserting exclusive possession and development rights commits trespass and wrongful ouster.
- Actual damages for such a trespass may be measured by the market value of a lost leasing opportunity at the time of the wrongful exclusion, when supported by evidence of an active market and prevailing lease prices.
- Damages based on established contemporaneous lease value are distinct from, and not defeated by, the uncertainty of future production or the fact that the trespasser’s well was nonproductive.

## Conclusion

The case held that an oil-and-gas lease’s primary term began on the date shown on the lease, making Humble’s later entry unauthorized; because the wrongful ouster deprived Kishi of a valuable, provable opportunity to lease during a lease-market peak, he could recover substantial damages measured by that lost lease value rather than nominal damages.


Humble Oil & Refining Co. v. Kishi, 299 S.W. 687 (Tex. Civ. App.—Beaumont 1927, writ ref'd)