Thomason v. McIntyre , 113 Tex. 220 ( 1923 )

Defendants in error sued plaintiff in error G.J. Thomason to cancel a conveyance of minerals and appurtenant rights, executed by defendants in error to said plaintiff in error. One of the alleged grounds of cancellation was fraud on the part of said plaintiff in error in procuring the execution of the conveyance. Plaintiffs in error, G.W. Thomason and Y.L. Thomason, intervened asserting an interest under G.J. Thomason. Plaintiff in error G.J. Thomason, besides other matters, plead limitations of two and four years. In response to special issues, the jury made many findings against plaintiffs in error, among which were findings that G.J. Thomason induced the execution of the conveyance by means of fraudulent representations; that this suit was filed within two years after the fraud was discovered or could be discovered by the exercise of reasonable diligence, and that the intervenors paid no valuable consideration on their purchase from G.J. Thomason.

The writ of error was granted on the conflict between the decision in McIntyre v. Thomason, 210 S.W. 564, and the decision herein reported in 233 S.W. 620. The former decision was that the suit of defendants in error would be barred in two years, the evidence conclusively showing that the fraudulent representations and acts, by which the conveyance was procured, were either known to, or could have been ascertained by defendants in error, with the exercise of the slightest diligence, for more than two years prior to the institution of the suit. The latter decision was that "the statute of limitation of four years and not the two years statute was the only statute that would bar the suit to cancel for fraud."

The Court of Civil Appeals, in its last opinion explains how the first decision came to be made. 233 S.W. 621.

We concur in the conclusion of the Court of Civil Appeals that there was evidence on the last trial to support the jury's findings, and deem it necessary to discuss only the point of conflict on which the writ of error was allowed.

It is settled that four years — and not two years — bars a suit to cancel a conveyance for fraud. Chicago T. M.C. Ry. Co. v. Titterington, 84 Tex. 225, 31 Am. St., 39, 19 S.W. 472; Moore v. Chamberlain, 109 Tex. 68, 195 S.W. 1135; Gorden v. Rhodes Daniel, 102 Tex. 300, 116 S.W. 40; Clark v. Texas Co-op. Inv. Co., 231 S.W. 382.

The rule announced in the case of The Texas Company v. Davis,113 Tex. 321, 254 S.W. 304, that a simple suit to remove a cloud from a title to land, when such title would sustain an action of trespass to try title at the date of institution of the suit, may be maintained at any time, is not in conflict with the rule that limitation of four years bars a suit to avoid a conveyance for fraud. The Amarillo Court of Civil Appeals accurately stated the distinction between the two kinds of suit, when it said, speaking through Judge Boyce:

"In order to prevent any misapprehension, which appellee seems to anticipate, as to the meaning of our opinion, we will say that the issues of ratification and limitation discussed are applicable only to that part of the cause of action which seeks to set aside and cancel the contract for fraud. If the deed of trust and note were given in violation of the provisions of the Constitution and statute, they would be, as between the parties, void; a ratification thereof would be subject to the same vice. The plaintiff could have defended a suit brought at any time to enforce them, and a suit to have the deed of trust declared void might be truly classed as a suit to remove cloud from title. But if this issue should be determined against the plaintiff, and he relies on the alleged fraud in inducing the subscription to secure a cancellation, a different situation is presented. The contract then would not be void, but merely voidable, and would be the subject of ratification. A judgment removing cloud from the title in such case would be a mere incident to the cancellation of the deed of trust, which would be a valid instrument until set aside for the fraud. The primary purpose of the suit in such event would be rescission and cancellation, and limitation applicable to that character of suit would apply and not the law of limitation of suits to remove cloud from title. Kennon v. Miller,143 S.W. 988; McCampbell v. Durst, 15 Texas Civ. App. 522[15 Tex. Civ. App. 522], 40 S.W. 320; Railway Co. v. Titterington, 84 Tex. 218, 19 S.W. 472, 31 Am. St. Rep., 39." Lone Star Life Ins. Co. v. Pierce, 200 S.W. 1108, 1109.

We refused writs of error in several companion cases to this one because we were of opinion that the questions raised in the petition for writ of error herein, which we have not discussed, were correctly determined by the Court of Civil Appeals, at least as far as necessary to maintain the correctness of the judgment of that Court. Further examination and consideration confirms that opinion.

Finding no reversible error, it is ordered that the judgment of the Court of Civil Appeals be affirmed.

Affirmed