Humphrey v. C. G. Jung Educational Center of Houston

• Citation: 624 F.2d 637
• Decision Date: 21 August 1980
• Docket Number: No. 78-2927,78-2927
• Parties: Robert K. HUMPHREY, Individually and as Executor of the Estate of Blanche Meyer Humphrey, et al., Plaintiffs-Appellants, v. The C. G. JUNG EDUCATIONAL CENTER OF HOUSTON et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 637

624 F.2d 637

Robert K. HUMPHREY, Individually and as Executor of the Estate of Blanche Meyer Humphrey, et al Plaintiffs-Appellants, v. The C. G. JUNG EDUCATIONAL CENTER OF HOUSTON et al Defendants-Appellees.

No. 78-2927.

United States Court of Appeals Fifth Circuit.

Aug. 21, 1980.

Lynn N. Hughes, Roy L. Wardell, W. James Kronzer, Houston, Tex., for plaintiffs-appellants.

Hutcheson & Grundy, Thomas T. Hutcheson, Thomas R. Kelsey, Houston, Tex., for defendants-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before MORGAN, CHARLES CLARK and TATE, Circuit Judges.

LEWIS R. MORGAN, Circuit Judge.

Appellants, Blanche Meyer Humphrey ¹ and her children, Elizabeth Humphrey Murphy, Robert K. Humphrey, and Marjorie Hunter Humphrey, instituted this diversity action to recover title and possession of an undivided one-half interest in a parcel of land located in Houston, Texas. Appellee ² Carolyn Fay acquired title to this property in fee simple subject to a condition subsequent that the property not be used commercially. Appellants contend that Ms. Fay's estate was destroyed when she breached the condition subsequent and appellants elected to exercise their right of entry for condition broken. The District Court for the Southern District of Texas granted appellees' motion for summary judgment, concluding that appellants' action was barred by the Texas three-year statute of limitations. Tex.Rev.Civ.Stat.Ann. art. 5507 (1958). We reverse and remand for further proceedings.

The following facts were stipulated by the parties. On February 11, 1920, Herbert K. and Blanche Meyer Humphrey and their cotenants, R. G. and Edith R. Caldwell, conveyed to Tom Randolph a tract of land on Montrose Boulevard in Houston, Texas, located in Lot F, Block 8, Turner Addition, Harris County, Texas. This deed restricted the use of the property to "residence purposes only" and prohibited the erection of "any store or shop thereon for the sale of merchandise or any other commodity." In the event the grantee violated these restrictions, the deed specified that "said land shall revert to the Grantors herein, should they so elect."

None of the restrictions in the Humphrey deed were violated prior to August 3, 1972, when the property was conveyed by General Warranty Deed to Jasper Galleries, Inc. Shortly thereafter Jasper Galleries demolished the existing residence and began construction on an 8,000 square foot art gallery building covering a majority of the property and of the adjoining Lot E in Block 8. Jasper Galleries completed construction of the building on May 1, 1972, and held its grand opening on May 10, 1973. The parties agree that beginning no later than May 10, 1973, the property was used in open, obvious, and continuous violation of the Humphrey deed restrictions. On July 25, 1975, Jasper Galleries conveyed the property (and the adjoining Lot E) to Carolyn Fay, who continued to use the property for commercial purposes.

Appellants filed their lawsuit seeking an undivided one-half interest in the property on September 3, 1976, three years and three months after the violation of the restriction commenced. Blanche Meyer Humphrey, one of the original grantors of the Humphrey deed, was a named plaintiff in the action.

After submitting joint stipulations of fact to the district court, plaintiffs and defendants filed cross motions for summary judgment. The court first determined that the 1920 Humphrey deed conveyed a fee simple on condition subsequent and reserved in the grantors an optional right to reenter and terminate the estate granted should the property ever be used for commercial purposes. The parties do not challenge this interpretation of the Humphrey deed restrictions. The court then concluded that appellants' right to reenter upon breach of the condition subsequent was barred under the Texas three-year statute of limitations. Tex.Rev.Civ.Stat.Ann. art. 5507 (1958). ³ Accordingly, the court granted appellees' motion for summary judgment and dismissed appellants' lawsuit with prejudice.

Article 5507, Tex.Rev.Civ.Stat.Ann., provides a relatively short limitations period for certain actions to recover real estate from an adverse possessor:

Suits to recover real estate, as against a person in peaceable and adverse possession thereof under title or color of title, shall be instituted within three years next after the cause of action accrued, and not afterward.

It is clear that appellees have established a limitations defense under this article if Carolyn Fay's possession of the property, when tacked on to the possession of her immediate predecessor, was under "title or color of title." Those terms are defined in Tex.Rev.Civ.Stat.Ann. art. 5508 (1958):

By the term "title" is meant a regular chain of transfers from or under the sovereignty of the soil, and by "color of title" is meant a consecutive chain of such transfers down to such person in possession, without being regular, as if one or more of the memorials or muniments be not registered, or not duly registered, or be only in writing, or such like defect as may not extend to or include the want of intrinsic fairness and honesty; or when the party in possession shall hold the same by a certificate of headright, land warrant, or land script, with a chain of transfers down to him in possession.

Appellants contend that the three-year statute of limitations does not apply to a right of entry for condition broken since the party owning a fee simple on condition subsequent cannot, under Texas law, have "title or color of title" to an interest never conveyed to him or his predecessor in title. Appellees reject this contention and argue that the district court correctly determined that the Humphreys forfeited their right to enforce the condition subsequent. ⁴

Although the terms "title and color of title" are defined in article 5508, it is helpful to review the history and purpose of the three-year limitations statute before deciding if it is applicable in a particular case. ⁵ The Fifth Congress of the Republic of Texas enacted the statute in 1841 in response to a problem peculiar to Texas land titles. During the period from 1820 to 1840 three different sovereigns Spain, Mexico, and the Republic of Texas exercised dominion over the region and issued grants to vast tracts of public land. Because the recording procedures utilized during these years were less than reliable, and because volumes of records were lost or destroyed during the revolution, many of these grants applied to lands that had previously been donated by the same or a different sovereign. As a result, it was often difficult or impossible to determine the ownership of large bodies of land. This confusion of land titles was particularly troublesome to a young nation interested in encouraging emigration and the development of its lands.

The three-year limitations statute was enacted to remedy this problem. The statute promoted stability in land titles by protecting junior grantees from the assertion of neglected but superior claims by those who acquired their titles from Mexican or Spanish grants. League v. Atchison, 73 U.S. (6 Wall.) 112, 18 L.Ed. 764 (1869). The grantee who held under a prior grant was protected provided he did not sleep on his rights for more than three years. For the most part, the problem sought to be remedied by the three-year statute no longer exists. Texas Land Titles: Part II, 7 St. Mary's L.J. 50, 86 (1975); Norvell, The Three Year Statute of Limitations, 2 Baylor L.Rev. 1, 1 (1949); West, The Texas Three Year Statute of Limitation, 19 Texas L.Rev. 373, 373 (1941).

The Texas courts have resisted attempts to apply the statute to situations that do not comport with its history and purpose. The leading case on the meaning of the statute is Burnham v. Hardy Oil Co., 108 Tex. 555, 195 S.W. 1139 (1917). In Hardy Oil, Henry and Henrietta Parker owned as community property a league of land originally granted to Henry. After Henrietta's death, Henry conveyed the property to his son, Wm. Parker, and devised the property to Wm. in his will. Hardy Oil, the defendant in the action, held the property under regular conveyance from Wm. Parker. The plaintiffs, the heirs of a daughter of Henry and Henrietta Parker, claimed a portion of the property on the ground that Henry had lacked authority to dispose of his deceased spouse's community share. As part of its defense, Hardy Oil invoked the three-year statute of limitations.

In discussing the scope and reach of the three-year limitations statute, the court found it necessary to expand upon the statutory definition of "title":

As the term is used in this statute, it necessarily means something less than the paramount right to the land. The holder of such a right stands in no need of limitation for the establishment of the superiority of his claim. A statute of limitation of itself implies the existence of a better right than that possessed by the limitation claimant. Likewise, the term as used in the statute, necessarily means something more than the right conferred by naked deed, adverse possession under which, though it conveys no title, will, with other requirements met, perfect a limitation under the five years statute. Otherwise, there could be no justification for permitting the title to ripen under a shorter period of possession than is required by the five years statute.

The necessity, as the Legislature viewed it, of quieting by limitation the rights to land of persons who stood in neither of these situations, but who occupied, it might be said, a ground between them, was the cause of the enactment of the statute. In an enactment of such design, this would lead, naturally, to the employment of the term "title," if employed at all, in some strictly technical sense. Hence, its definition in the statute as, "a regular chain of transfer from or under the sovereignty of the soil."

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