Stevens v. Galveston, H. & S. A. Ry. Co. , 1914 Tex. App. LEXIS 809 ( 1914 )

On Rehearing. Upon more mature consideration, we are of the opinion that the deed of June 8, 1881, conveys upon limitation and not condition subsequent. The condition in the deed is as follows:

"To have and to hold, all and singular the premises, with all the rights, privileges and appurtenances thereunto appertaining unto the said Galveston, Harrisburg San Antonio Railway Company, and its successors and assigns, so long as the said land shall be used as a railroad right of way, and if not so used, shall revert to the grantors herein."

The following authorities support our position: Tiedemann on Real Property, § 281; 2 Washburn on Real Property, §§ 970, 971; Green v. Gresham, 21 Tex. Civ. App. 601, 53 S.W. 382; Diamond v. Rotan,124 S.W. 196; McBride v. Farmers' Merchants' Gin Co., 152 S.W. 1135; Stewart v. Blain, 159 S.W. 928. Mr. Tiedemann, § 281, supra, says:

"An estate upon limitation is one which is made to determine absolutely upon the happening of some future event as an estate to A., so long as she remains a widow. The technical words generally used to create a limitation are conjunctions relating to time, such as ``during,' ``while,' ``so long as,' ``until,' etc. But these words are not absolutely necessary; for where it is necessary, in order to carry out the intent of the grantor, to construe an estate to be a limitation, it will be done, even though words, ordinarily used in the creation of an estate upon condition, appear in their stead. An estate upon limitation differs from one upon condition in this: That the estate is determined ipso facto by the happening of the contingency, and, does not require any entry by the grantor in order to defeat it. A conditional limitation is an estate limited to take effect upon the happening of the contingency, and which takes place of the estate which is determined by such contingency. Some authors, among others Mr. Washburn, have used the terms ``conditional limitations' and ``limitations' interchangeably, referring in both instances to the estate which is determined by the happening of the event. But it appears to be the better method to apply the term ``conditional limitation' to the estate which takes effect, and ``limitation' to the estate which is determined. A conditional limitation is an estate limited to take effect after the determination of an estate which in the absence of a limitation over would have been an estate upon condition. Strictly speaking, a conditional limitation cannot be limited after an estate up on limitation, except where the contingency which constitutes the limitation is not sure to happen and the estate is a fee upon limitation. Thus in a grant to A. during widowhood, and upon her marriage to B., A.'s estate would be an estate upon limitation, and consequently B.'s estate would be a good common-law remainder."

Mr. Washburn, discussing the same subject, section 970, supra, says:

"In this and many other respects, an estate upon condition, properly speaking, differs from what is known as a conditional limitation in either case, the estate is a conditional one. But in the one, though the event happen upon which the estate may be defeated, it requires some act to be done, such as making an entry, in order to effect this. In the other, the happening of the event is, in itself, the limit beyond which the estate no longer exists, but is determined by the operation of the law, without requiring any act to be done by any one. In case of a condition at common law, the grantor or his heirs alone can defeat the estate by entry for condition broken. In a conditional limitation, the estate determines, ipso facto, upon the happening of the event, and goes over at once to the grantor by reverter, or to the person to whom it is limited upon the happening of such contingency. So if the breach of a condition be relieved against in chancery, or excused by becoming impossible by the act of God, the estate to which it is annexed remains unimpaired, whereas a limitation determines an estate from whatever cause it arises. This distinction may be illustrated by a familiar example. A grant to A. B., provided she continues unmarried, is an estate upon condition; and if she marries, nobody can take advantage of it to defeat the estate but the grantor or his heirs. But a grant to A. B., so long as she continues unmarried, is a limitation. The moment she marries, the time for which the estate was to be held has expired, and the estate is not technically defeated, but determined. So the grant of an estateuntil a certain event happens is a limitation, and good at the common law, and upon it a remainder may be limited, provided the first estate limited were not in terms a fee simple absolute or determinable."

And in section 971, supra, he says:

"A stranger may take advantage of a limitation, but not of a condition. The only general rule, perhaps, in determining whether words are words of condition or of limitation is that, where they circumscribe the continuance of the estate, and mark the period which is to determine it, they are words of limitation; when they render the estate liable to be defeated, in case the event expressed should arise before the determination of the estate, they are words of condition. Thus a parol letting of premises to another, so long as he keeps a good school, is a conditional limitation, and no notice or entry is necessary to determine it if the tenant fail to keep such a school. The distinction between condition and limitation is that the latter determines the estate of itself; the former, to have that effect, requires some act of election on the part of him or his heirs in whose favor the condition is created. ``A condition respects the destruction and determination of an estate; a conditional limitation relates to the commencement of a new one. A condition brings the estate back to the grantor or his heirs; a conditional limitation carries it over to a stranger.'"

From the foregoing authorities it follows that the lands described in the deed of June 8, 1881, were conveyed upon limitation, and that the subsequent vendees of the original grantors in said deed would succeed to whatever right or interest in the estate that the original grantors had after the execution of the said deed, and plaintiffs herein, being the subsequent vendees of the original grantors of the deed of June 8, 1881, as such, would be entitled to maintain suit as to recovery of the lands embraced in the deed of June 8, 1881, by virtue of any breach of the appellee of the conditions in said deed unless title to the property, independent of the said deed, was not in the plaintiffs.

Notwithstanding our opinion as it relates to the deed of June 8, 1881, we are of the opinion that the judgment of the trial court as reformed upon original hearing should stand unchanged.

The findings of fact as filed by the trial court are not challenged, and are binding upon this court. Prairie Cattle Co. v. Balfour, 146 S.W. 674. From the findings of fact the trial court filed conclusions of law, the third conclusion being as follows:

"Third. I further find that the evidence having established, so far as plaintiffs are concerned, H. S. and J. S. Gillett as the common source of title through whom plaintiffs claim a six-eighths interest in the half blocks involved in this suit, which half blocks defendant also claims, plaintiffs have failed to show any interest in said half blocks, or any of same, and have failed to show that any title to any of the land whatsoever passed to them, or their grantors, by the deed signed by J. P. McKinney purporting to be assignee in bankruptcy of Henry S. and John S. Gillett, inasmuch as his authority does not appear and it has not been shown that H. S. and J. S. Gillett were ever adjudicated bankrupts, or that said McKinney was ever selected assignee in bankruptcy, or that any conveyance was ever made to him as such assignee."

This conclusion of law stands unchallenged, unless it is challenged by the eighteenth assignment of error. The eighteenth assignment of error is submitted as a proposition, and as such it fails to disclose any point of objection, or assign any reason for the contention that the court erred. We are of the opinion that the proposition is too general to entitle it to consideration, and the assignment of error is overruled. We are therefore of the opinion that the judgment, as reformed upon the original hearing herein, should stand, and that the appellants' motion for rehearing should be overruled.

We have given due consideration to the motion for rehearing as filed by the appellee, and are of opinion that it should also be overruled. The authorities cited in support of the contention as made in the motion are not considered as authorities in point in this cause.

In view of the opinion that the deed of June 8, 1881, conveys the lands therein described upon limitation and not upon condition subsequent, we deem it proper to permit the parties to file additional motions for rehearing, and it is ordered that 15 days be granted within which such motions may be filed.

On Second Rehearing. We will consider the eighteenth assignment of error, which appellants submit as a proposition, as being sufficient. It is as follows:

"The court erred in not holding that by accepting the deeds aforesaid and the deed from Charles Crocker, and by entering into possession of the premises thereby conveyed, defendant was precluded from denying the original ownership of said premises by Robert Campbell, and in not holding that plaintiffs showed a sufficient title as against defendant of the original ownership of said Robert Campbell."

Substantially, the proposition is that appellee, by accepting deeds from the trustees of Robert Campbell, and by entering into possession of the premises conveyed, in order to defeat the conditions of the deeds, is estopped from asserting any superior, outstanding title. As noted in the original opinion, the deed of June 8, 1881, conveys the land to appellee, its successors and assigns, "so long as the said land shall be used as a railroad right of way, and if not so used, shall revert to the grantors." It will be noted that the condition requires the continuous use of the premises as a railroad right of way, and upon failure to so use the premises, reverts to the grantor. As noted in the original opinion on rehearing, the condition is construed as one of limitation. In Robertson v. Pickrell, 109 U.S. 608, 3 Sup.Ct. 407, 27 L.Ed. 1049, the Supreme Court of the United States, speaking through Mr. Justice Field, of the relation of grantor and grantee, approved the general rule to be as follows:

"The vendee acquired the property for himself, and his faith is not pledged to maintain the title of the vendor. The rights of the vendor are intended to be extinguished by the sale, and he has no continuing interest in the maintenance of his title, unless he should be called upon in consequence of some covenant or warranty in his deed. The property having become by the sale the property of the vendee, he has a right to fortify that title by the purchase of any other which may protect him in the quiet enjoyment of the premises. No principle of morality restrains him from doing this, nor is either the letter or the spirit of the contract violated by it. [Blight's Lessee v. Rochester] 7 Wheat. 547, 548. See also, Willison v. Watkins, 3 Pet. 43 [7 L.Ed. 596]; Watkins v. Holman, 16 Pet. 25 [10 L.Ed. 873], and Taylor, Land. T. § 14."

After stating the rule, the court then adds:

"To this general statement of the law there is this qualification: That a grantee cannot dispute his grantor's title at the time of conveyance so as to avoid payment of the purchase price of the property; nor can the grantee in a contest with another, whilst relying solely upon the title conveyed to him, question its validity when set up by the latter. In other words, he cannot assert that the title, obtained from his grantor or through him, is sufficient or his protection and not available to his contestant. Where both parties assert title from a common grantor, and no other source, neither can deny that such grantor had a valid title when he executed his conveyance. Ives v. Sawyer, 20 N.C. 179, and Gilliam v. Bird, 30 N. 0. 280 [49 Am.Dec. 379]. The case of Board v. Board, to which counsel refer, was decided upon similar grounds; there the defendant in ejectment, claiming as grantee under the devisee of a life estate under a will, was held to be estopped from denying the validity of the will in an action by the grantees of the remainderman. L. R. 9 Q. B., 48.

"With exceptions or limitations of this character it will be found on examination of the authorities, particularly those of a modern date, that the doctrine of estoppel in pais, however it may have been applied formerly, cannot now be asserted to preclude the grantee from denying his grantor's title and acquiring a superior one, unless there exists such a relation of the parties to each other as would render the proceeding a breach of good faith and common honesty. No such relation exists between grantor and grantee in an absolute conveyance without recital or covenant, whether it be of the fee or of an estate for life. The grantee does not recognize by the acceptance of such a conveyance of an estate for the life of another, the possession of any greater estate in the grantor, or any obligation to hold the premises for him after the termination of the estate. So far as he is informed by such a conveyance he takes the entire interest of the grantor in the property. He does him, therefore, no wrong by purchasing any adverse claims which may strengthen his own title, which may give him a title after the termination of the life estate. Covenants in the instrument intended for him, such as to restore and surrender the premises on the termination of the life estate, or recitals declaring the reversion to be in the grantors or others, would, of course, change the relations of the parties. Obligations from such covenants or recitals might arise which would control the action of the grantee."

Also, in Cowell v. Colorado Springs Co., 100 U.S. 61, 25 L.Ed. 547, the defendant, who was holding under a deed with condition subsequent, was sued by the grantor for recovery of the premises upon a breach of the conditions, as stipulated in the defendant's deed. One of the defenses relied upon was that the grantor was without title at the time when conveyance was made. Mr. Justice Field, who also delivered the opinion of the court, said:

"The defendant, as already stated, went into possession of the premises in controversy under the deed of the plaintiff. He took his title from the company, with a condition that if he manufactured or sold intoxicating liquors, to be used as a beverage, at any place of public resort on the premises, the title should revert to his grantor; and he is therefore estopped, when sued by the grantor for the premises, upon breach of the condition, from denying the corporate existence of the plaintiff, or the validity of the title conveyed by its deed. Upon obvious principles, he cannot be permitted to retain the property which he received upon condition that it should be restored to his grantor on a certain contingency, by denying, when the contingency has happened, that his grantor ever had any right to it."

We are of opinion that the deed of June 8, 1881, is such an instrument as would be controlled by the principles as announced in the case last cited, and that the grantee would not be permitted to urge as a defense as against the grantor for the recovery of the premises upon a breach of the conditions in the deed, by setting up as against said grantor an outstanding title which the grantee acquired whilst in possession of the premises under a deed of the grantor. We think the following authorities support this view: Devlin on Real Estate (2d Ed.) pars. 1279, 1289; Railway Company v. Quigley,10 Idaho 770, 80 P. 401; Jacobs v. Miller, 50 Mich. 119, 15 N.W. 42; Waco Bridge Co. v. City of Waco, 85 Tex. 320, 20 S.W. 137; American, etc., v. Mercedes, etc. (Tex.Civ.App.) 155 S.W. 286; Hardy v. De Leon, 5 Tex. 211; Macklot v. Dubreuil, 9 Mo. 477, 43 Am.Dec. 550, 553; Doty v. Barnard,92 Tex. 104, 47 S.W. 712. The principle as announced in the case of Cowell v. Colorado Springs Co., supra, is the same which governs between the vendor and vendee where the vendor sues to recover of the vendee the purchase money for the lands conveyed by warranty deed. It is said in King v. Sullivan, 92 S.W. 51, that:

"No principle is better settled in this state than that an outstanding title, purchased by vendee in possession of land under a warranty deed, inures to the benefit of his vendor, and in a suit by the vendee against the vendor for breach of warranty he is limited in his recovery to the cost and expense incurred in procuring the outstanding title. McClelland v. Moore, 43 Tex. 355; Denson v. Love, 58 Tex. 468; Clark v. Mumford,62 Tex. 531; Johnson v. Blum, 28 Tex. Civ. App. 10, 66 S.W. 461; Sedg. Damages, § 979."

Additional authorities to the same effect are as follows: McGregor v. Tabor, 26 S.W. 443; Cook v. Coleman Co., 33 S.W. 756.

The outstanding title, which was acquired by appellee soon after it took possession of the conveyed premises, therefore inured to the benefit of appellee's grantors, perfecting the title which was conveyed to it. An outstanding title which has been purchased by the grantee during his possession of the premises under a deed from the grantor may be a good and valid defense as an offset against the purchase-money notes for an amount equal to the amount which the grantee was required to pay for the outstanding title. This, however, is a defense only when properly pleaded, and the evidence will justify such an offset. It also appears from the authorities cited that the grantee's possession may ripen by limitation into a valid title as against an outstanding title; such title so acquired by the grantee by limitation would, in that event, inure to the benefit of the grantor, and so long as the covenant in the deed which would require in equity such a relation as between the parties as to render the purchase of an outstanding title as against the grantor's title a breach of good faith and common honesty, such outstanding title so acquired, whether by limitation or by purchase, would inure to the benefit of the grantor.

In the instant case, the grantee proved a superior, outstanding title from Henry S. and John S. Gillett, connecting itself with such title to blocks 9, 42, and 43. As to block 8, the proof shows that the title to it remained in Williams and Pierson. Under the authorities just cited, the acquisition of the superior, outstanding title to the half blocks 9, 42, and 43, inured to the benefit of the vendor. It also appears that as to blocks 3, 8, and 10, by virtue of the continuous and adverse possession, the appellee acquired title to it by limitation, which also inured to the benefit of the grantor. The appellee went into possession under the deed of June 8, 1881, and accordingly is bound by said deed; and for the reasons just given appellee will not be permitted to dispute the title which it acquired to the half blocks by setting up any outstanding title to same. The trial court has found that the appellee has not violated any of the conditions of the deed, having performed same continuously since it purchased said property from Gantt Rankin, as trustees of Robert Campbell. This being true, appellants should not be permitted to recover of the appellee the half blocks in question, but, on the other hand, appellee, by virtue of the conveyance to it, by deed of June 8, 1881, did acquire the whole of said property, subject to the conditions in said deed, which conditions require continuous performance, and upon a breach of which conditions, the appellants would be entitled to the property, and to this extent, the judgment as heretofore rendered in this cause should be further modified so as to meet the views as herein expressed.