Schneider v. Lipscomb County Nat. Farm Loan Ass'n

• Decision Date: 14 May 1947
• Docket Number: No. A-1083.,A-1083.
• Citation: 202 S.W.2d 832
• Parties: SCHNEIDER v. LIPSCOMB COUNTY NAT. FARM LOAN ASS'N et al.
• Court: Texas Supreme Court

Page 832

202 S.W.2d 832

SCHNEIDER v. LIPSCOMB COUNTY NAT. FARM LOAN ASS'N et al.

No. A-1083.

Supreme Court of Texas.

May 14, 1947.

Rehearing Denied June 25, 1947.

Error to Court of Civil Appeals of Seventh Supreme Judicial District.

Suit by Edward Schneider against Lipscomb County National Farm Loan Association and others to recover damages for breach of covenant of general warranty wherein defendant filed cross-actions against others. A judgment for defendant was affirmed by the Court of Civil Appeals, 196 S.W.2d 954, and the plaintiff brings error.

Reversed and cause remanded.

Boyer, McConnell & Hankins and Max W. Boyer, all of Perryton, for petitioner Schneider.

H. A. Berry, of Houston, for Lipscomb County Nat. Farm Loan Ass'n, respondent.

Hoover, Hoover & Cussen, of Canadian, and Saulsbury, Skelton & Everton, of Temple, for J. D. McCelvey, respondent.

Witt, Terrell, Lincoln, Jones & Riley and W. E. Terrell, all of Waco, for respondent Milam.

Roy Sansing, of Higgins, for respondent Turner.

A. H. McCulloch, of Dallas, for respondent Fannie P. Morgan and others.

SMEDLEY, Justice.

This suit is by petitioner Schneider against respondent Lipscomb County National Farm Loan Association, his grantor, to recover damages for breach of a covenant of general warranty. The trial court's judgment that petitioner take nothing was affirmed by the Court of Civil Appeals on its holding that the suit is barred by the four year statute of limitations pleaded by respondent. 196 S.W.2d 954, 956.

A part of the land that had been conveyed by respondent to petitioner was awarded by the Commissioner of the General Land Office as unsurveyed public school land to one Sansing on December 8, 1938, more than four years before the filing of this suit. The judgment of the Court of Civil Appeals was rendered on its conclusion that the award "constituted an act on the part of the State of Texas which amounted to an assertion of its superior title and constituted an eviction of the appellant". This was held notwithstanding the fact that petitioner did not yield to what the Court of Civil Appeals regarded as the assertion of a paramount title, but remained in possession of the land that had been conveyed to him, insisted upon the superiority of his title, and contested by suit the title asserted by Sansing under the award, until final judgment was rendered against him.

Respondent, the Farm Loan Association, on August 21, 1925, sold and conveyed to petitioner Schneider, with covenant of general warranty, all of survey 4 and a part of survey 3, Block D, W. P. Wiser surveys in Lipscomb County, containing 1,200 acres, the land being described by metes and bounds so that its north boundary line coincided with the north boundary line of the State. Petitioner went into possession of the land and continued to use, possess and occupy it. In the year 1937 one Sansing, believing that there was a strip of unsurveyed land belonging to the public school fund lying between the north boundary line of the State and the north line of Block D above referred to, filed an application for a survey of the land in order to buy it under the provisions of Section 6 of the 1931 Sales Act, Chapter 271, Acts Regular Session, 42nd Legislature, pp. 452, 453, 454, Vernon's Ann.Civ.St. art. 5421c, § 6. He caused a survey of the land to be made in 34 separate tracts and field notes to be returned to the Land Office. After approval by the Commissioner of the General Land Office of the field notes for 16 of the tracts, containing in all 2,343.03 acres, and valuation of the land, Sansing, on December 8, 1938, filed applications to buy the 16 tracts, and on the same day the Commissioner of the General Land Office issued to him an award of them.

The award was followed by the institution of 11 suits against Sansing by those who held and possessed, as parts of surveys in Block D, tracts that had been awarded to Sansing as unsurveyed land, one of these being filed by petitioner Schneider, in which he asserted his ownership, as a part of the land that had been conveyed to him by respondent, the Farm Loan Association, of 401.6 acres, being one of the tracts that had been awarded by the Commissioner to Sansing. The 11 suits were consolidated for trial. All of the plaintiffs except Schneider had claimed and sought to exercise the preference right of purchase given by Section 6 of the 1931 Sales Act to persons holding and occupying in good faith land sought to be bought by another as unsurveyed public school land. Sansing contested the rights of those who had sought to exercise the preference right, but judgment was rendered in their favor. The court found that the land which Sansing had applied to purchase was unsurveyed public school land and rendered judgment in his favor against Schneider for the title and possession of the 401.6 acres. The judgment was affirmed by the Court of Civil Appeals. Sansing v. Bricka, 159 S.W.2d 142. Schneider's suit against Sansing was filed December 1, 1939, and the judgment against him and in favor of Sansing became final following the appeal, some time in 1942. This suit was filed February 11, 1943.

The rule is well established that a cause of action for breach of a covenant of general warranty does not arise until there has been an eviction. Formerly, actual eviction was required before suit could be brought, but now suit may be brought after constructive eviction or ouster in pais, as when the paramount title has been positively asserted against the covenantee and he has yielded to it by surrendering possession or by purchasing the title. The covenantee thus constructively evicted has the burden of proving, before he can recover on the covenant, that the paramount title has been positively asserted him and that it in fact is paramount. Westrope v. Chambers' Estate, 51 Tex. 178; Jones' Heirs v. Paul's Heirs, 59 Tex. 41; Clark v. Mumford, 62 Tex. 531; Johns v. Hardin, 81 Tex. 37, 16 S.W. 623; Rancho Bonito Land, etc., Co. v. North, 92 Tex. 72, 45 S.W. 994; Whitaker v. Felts, 137 Tex. 578, 155 S.W.2d 604; Thompson on Real Property, (Perm. Ed.) Vol. 7, pp. 223-226, Sec. 3752.

The Court of Civil Appeals, in its decision that petitioner Schneider was evicted by the issuance of the notice of the award to Sansing, gave to the mere issuance or making of the award the effect of a constructive ouster. It held that the award by the Commissioner was the assertion by the State of its superior or paramount title. But if the award was a formal and authentic assertion by the State of paramount title (and as will be shown hereinafter it should not be so regarded) there was no submission to the assertion, and consequently there was no constructive eviction or ouster in pais. Constructive eviction that will serve as the basis of a suit for breach of the covenant of general warranty has two elements, (1) a positive assertion of a paramount title and (2) a yielding to that assertion of title. The opinion in Rancho Bonito Land, etc., Co. v. North, 92 Tex. 72, 75, 45 S.W. 994, 996, contains the following: "The warranty in former times could only be broken by an actual eviction from the possession, but in modern times the rule has been so far relaxed that an eviction in legal contemplation occurs when the facts are such that it would be useless for the covenantee to attempt to maintain the title conveyed him, e. g., where the holder of the superior title has taken actual possession or threatens suit. If in such cases he yields to a force he can not resist, he is, in contemplation of law, evicted." (Emphasis added.)

The court, discussing constructive eviction, or ouster in pais, in Jones' Heirs v. Paul's Heirs, 59 Tex. 41, 45, said: "If a paramount title is positively asserted against the vendee, he is not required to make an unavailing and useless resistance against a claim of title which is manifestly superior and must prevail. Under such circumstances he may give up the land to the claimant, and resort to his warranty."

In Clark v. Mumford, 62 Tex. 531, 535, the meaning and sufficiency of constructive eviction is thus tersely stated: "And notwithstanding a covenant of warranty is not broken until eviction by paramount title, still eviction by judgment at law is not essential to establish the breach; the covenantee may yield to the paramount title and give possession, or else buy his peace and claim for breach of the covenant."

For other authorities showing that yielding to the paramount title asserted is an essential part of constructive eviction, see: Thompson on Real Property, (Perm. Ed.) Vol. 7, pp. 223-226, Sec. 3752; Tiffany's Real Property (3d Ed.) Vol. 4, pp. 156, 157, Sec. 1013, 14 Am.Jur., p. 535, Sec. 72.

The decision of the Court of Civil Appeals that the mere making of the award by the Commissioner of the General Land Office "constituted eviction" is in conflict with the foregoing authorities which define and explain constructive eviction. Schneider did not yield to the award, but remained in possession and, as was his right, contested it. The decision contradicts the very term itself. There is no eviction, either actual or constructive, of one who remains in possession and asserts and defends his title against the title or claim pressed upon him.

There are decisions by courts of other states holding that when the state has the paramount title and makes a sale of the land, a covenantee in possession under another title may thereafter abandon possession and sue his covenantor. The rule of those cases is thus expressed in the text of American Jurisprudence cited by respondent: "A grant or sale of land by a state, while holding the paramount title, has been viewed as such a hostile assertion of title as will justify those in possession under defective titles in treating this act as an eviction, abandoning possession, and suing their covenantors. This view is based on the fact that ordinarily such sale is the only way in which the state...