TX 15.04 Parties In Possession
ADI Adverse Interests
TX000065 Revised Title Search and Examination Requirements
The application of any statute of limitation is based on fact. Until such facts are proved and substantiated by a court judgment, they are subject to varying interpretations and may, in many instances, be difficult to prove by reason of lapse of time and unavailability of witnesses.
It is, therefore, company policy not to insure based solely on the appearance of limitation title or the apparent application of a particular statute of limitation. The general requirement is that a judgment of a court of competent jurisdiction be obtained upholding the desired application of the appropriate statute of limitation. The title examiner must, in all cases, exercise discretion in applying statutes of limitation, limiting the use of such statutes to bolstering an otherwise technically defective title.
Express insurance may be available. If you have questions, contact a Texas Underwriting Counsel.
Limitations of Action for Land
The limitation Statutes are to be found, primarily, in Section 16 of the Civil Practice and Remedies Code ("C.P.&R. Code") of Vernon's Texas Codes Annotated ("V.T.C.A.").
The land limitation statutes are uniformly phrased to limit the institution of a suit to recover real estate, as against a person in "peaceable and adverse possession", to three, five, ten, or twenty-five years after accrual of the cause of action. (C.P.&R. Code, Sec. 16.024, 16.021, 16.026, 16.028)
"Peaceable possession" is defined as possession of real property that is continuous and not interrupted by an adverse suit to recover the property. (C.P.&R. Code, Sec. 16.021)
"Adverse possession" is defined as an actual and visible appropriation of the land commenced and continued under a claim of right that is inconsistent with and is hostile to the claim of another. (C.P.&R. Code, Sec. 16.021)
The most common applications of "adverse possession" are those instances where the adverse claimant has fenced the land and run cattle on it (one without the other is generally insufficient) or is actually farming the land or is actually living on the property.
"Claim of right" has been defined by the courts to mean that the claimant must have entered on the land intending to claim it as his own and to keep it for himself.
One court has declared that the essential elements of any limitation title are use, claim, and possession and these elements must all concur in the claimant.
C.P.&R. Code, Sec. 16.021, 16.022, and 16.023 contain common aspects of limitation concepts that apply to all the other sections of the limitation subchapter of the Code. Included are the definitions of "Adverse Possession", "Color of Title", "Peaceable Possession", and "Title" and the tacking of successive interests. For the purposes of the statutes limiting real property actions, the following additional definitions apply:
- "Color of Title" means a consecutive chain of transfers to the person in possession that:
is not regular because of a muniment that is not properly recorded or is only in writing or because of a similar defect that does not want of intrinsic fairness or honesty; or
is based on a certificate of headright, land warrant, or land scrip. (C.P.&R. Code, Sec. 16.021)
- "Title" means a regular chain of transfer of real property from or under the sovereignty of the soil. (C.P.&R. Code, Sec. 16.021)
The effect of disability on parties bringing actions, or against whom actions may be brought, have been codified as follows:
- A person is under a legal disability if the person is:
Younger than 18 years of age, regardless of whether the person is married;
Of unsound mind; or
Serving in the United Sates Armed Forces during time of war.
- If a person entitled to sue for the recovery of real property or entitled to make a defense based on the title to real property is under a legal disability at the time title to the property vests or adverse possession commences, the time of the disability is not included in a limitations period.
- Except as provided in the 25 year limitation statutes (Sections 16.027 and 16.028), after the termination of the legal disability, a person has the same time to present a claim that is allowed to others under chapter 16 of the C.P.&R. Code. (C.P.&R. Code, Sec. 16.022)
The tacking of successive interest now applies to all the real property limitation statutes and is set out in Section 16.023 as follows: To satisfy a limitations period, peaceable and adverse possession does not need to continue in the same person, but there must be a privity of estate between each holder and his successor.
The Three Year Statute
This statute provides, in substance, that an action against a person in peaceable and adverse possession under title or color of title is barred after the expiration of three years from the time the cause of action accrues. (C.P.&R. Code, Sec. 16.024) The statutes define "Title" as a regular chain of transfers from or under the sovereignty of the soil. "Color of Title" is defined as a consecutive chain of transfers to the person in possession that is not regular. The following are examples of a chain that is not regular:
- Failure to properly record a muniment;
- A muniment that is only in writing;
- A muniment defect that does not want of intrinsic fairness or honesty; or
- Possession based on certificate of head right, land warrant, or land script.
It is difficult to prove a limitations title under the three year statute.Texas courts in the cases of Shaw v. Ball, 23 SW2d 291,1930 Tx SCt and Jones v. Harrison, 773 SW2d 759,1985 Tx 4th Ct of Appls have stated that the 3 year statute of limitations vests title in the successor by deed from a grantor against whom an abstract of judgment has been filed. Company policy is that you may rely on a deed from a successor from a grantor against whom the abstract of judgment was filed upon the passage of at least 10 years. Any lesser time requires prior underwriting approval.
The Five Year Statute (C.P.&R. Code, Sec. 16.025)
This statute provides that an action against a person having peaceable and adverse possession of land, cultivating, using or enjoying the property, paying applicable taxes, and claiming under a duly registered deed is barred after the expiration of five years from the time the cause of action accrues.
It does not apply to a claim based on a forged deed or a deed executed under a forged power of attorney.
The Ten Year Statute (C.P.&R. Code, Sec. 16.026)
This statute provides that an action against one having peaceable and adverse possession of land and who cultivates, uses or enjoys it is barred after the expiration of ten years from the time the cause of action accrues.
It limits the peaceable and adverse possession to not more than 160 acres including improvements, or the number of acres actually enclosed if this exceeds 160 acres.
Peaceable possession of real property held under a recorded deed or other memorandum of title that fixes the boundaries of the possessor's claim extends to the boundaries specified in the instrument.
The Twenty-Five Year Statute (C.P.&R. Code, Sec. 16.028)
The twenty-five year statute prohibits an action against a person having peaceable and adverse possession for twenty-five years in good faith under a deed or other instrument purporting to convey which has been recorded in the county deed records where any part of the property is located.
This applies regardless of legal disability in the adverse claimant or any person under whom the adverse claimant claims.
The adverse possession extends to the property described in the recorded deed or instrument even though the instrument is void on its face or in fact.
A person holding property and claiming title under this statute has good and marketable title regardless of a disability arising at any time in the adverse claimant or a person claiming under the adverse claimant.
The "Exercise of Dominion" Twenty-Five Year Statutes (C.P.&R. Code, Sec. 16.029)
This statute applies to suits involving title to land not claimed by the State. It must be shown that the holders of the apparent record title have not exercised dominion over or have not paid taxes on the property, and that the opposing parties have openly exercised dominion over and asserted title to and have paid taxes on such land annually before delinquency for twenty-five years. Such showing constitutes prima facie evidence that title has passed to the opposing parties. This statute does not affect a statute of limitations, the right to prove title by circumstantial evidence, or suits between trustees and their beneficiaries.
The statutory definition of possession uses the word peaceable, that is, continuous and not interrupted by adverse suit.
Furthermore, adverse possession is an actual and visible appropriation of the land. (C.P.&R. Code, Sec. 16.021)
The courts have elaborated to some extent on the statutory definitions.
- It has been held that the land must be appropriated to the purpose for
which it is adapted;
- Furthermore, the possession must be exclusive;
- For example, a wife has no possession apart from her husband; nor
- May the possession be shared with the owner.
However, it has been held that:
- An occasional use of the land for timber purposes is of itself not sufficient.
- The mere fact that livestock has been grazed on the land and attended and
fed on the land is not of itself sufficient;
- Placing of hack marks on trees is not alone sufficient;
- Camping and fishing on the land is not of itself sufficient; but
- The mere fencing of land unaccompanied by other elements (such as the continuous grazing of cattle) is sufficient.
On the other hand, actual residence on the land is not essential; nor is it necessary that a tenant actually occupy the land between harvesting one crop and planting another.
The good faith or bad faith of the claimant is unimportant under the ten year statute. The very reason for the possession may be to acquire title by adverse possession alone. An agreement contemplating such result may be upheld.
The requirement of continuity is not defeated by temporary and reasonable breaks either in the possession or in the enclosure where there is no intention to abandon possession.
The adverse claimant's claim must be adverse or hostile to the true owner. It is not necessary that he claim adversely to the entire world. While not impossible, it is difficult to adversely possess against a contenant.
An adverse claimant must not in any way acknowledge the title in any other person than himself and he must assume that there is an owner against whom he is claiming the title. For example, he cannot agree to hold under another, take or offer to take a lease, offer to buy, or promise to pay rent and still maintain an adverse claim.
Closely related to the above is the situation where a grantor gives a deed and then remains in possession making the same use of the land that he made prior to the deed. Here it has been held that such possession is not adverse to the grantee in the absence of notice to the contrary.
Payment of Taxes
Regardless of the statute involved, the payment of taxes is regarded as an indicia of a claim of ownership. Non-payment of taxes may also be significant.
However, except for the five year statute and the twenty-five year exercise of dominion statute, the payment or non-payment of taxes of itself is not binding one way or the other.
Under the five year statute the payment of all taxes against the land being claimed for each of five years prior to the delinquency is an essential element.
If the property being claimed is not subject to taxation by reason of exemption, the failure to pay taxes does not prevent the claimant from perfecting limitation title under the five year statute.
Quit Claim Deeds
- Is it a link in the chain of title?
- Carries after acquired title?
- Is good as against a bona fide purchaser for value?
- Constitutes a deed under the five year statute of limitations?
- If the instrument in question is a pure right, title and interest quit claim,
as distinguished from a deed; then
- It is not a link in the chain of title; and
- Does not carry after acquired title; and
- It is not good as against a bona fide purchaser for value, and it is not a deed under the five year statute of limitations.
The general test is, whether from the face of the instrument, it purports to transfer the land itself as distinguished from the title held by the grantor. If it does transfer the land, it is a deed; if it does not, it is a mere quit claim.
A minor may acquire title by adverse possession.
Limitation may run against devisees under a will, and against administrators or executors.
It may also run against creditors of the estate.
A corporation may acquire title by limitation subject only to the questioning authority of the State of Texas. Ultra Vires is no defense to the adverse possession of the corporation.
An unincorporated association, the members of which take possession and claim adversely, may perfect a limitation title.
A mere fact that two or more persons claim jointly does not affect the exclusiveness of their possession.
State, cities, counties or other municipalities: - The present statute provide that no statute of limitations runs against the state, counties, incorporated cities, and school districts. (C.P.&R. Code, Sec. 16.061) Therefore, paving liens held by a city are not barred by the two year statute of limitations or any other statute of limitations.
Furthermore, no person can acquire a limitation title to any part of any road, street, alley, sidewalk, or grounds which belong to any town, city, or county or which have been donated or dedicated for public use. (C.P.&R. Code, Sec. 16.030)
It has been the law since 1887 that title by limitation could not be acquired as to any public road or street as against any county, town, or city.
It has been held that the state cannot acquire title by limitation. However, it has been held that municipalities can acquire title by limitation.
Landlord and Tenant
One purchasing from a tenant may not, without positive repudiation of the tenancy, claim adversely to the landlord.
If the landlord is claiming by virtue of the possession of the tenant, his possessory rights extend only to the land covered under the lease contract.
Where the tenant cultivates a part only of the tract of land, the landlord's possession extends to the entire tract in the absence of an affirmative restriction.
Co-tenants are owners who hold a present right to possession in undivided interests in a tract of land. Since there is a unity in their right to possession, the ordinary rules relating to the adverse claim are not applicable. The law presumes that the possession of one co-tenant is a right of the common title. One cannot assert an adverse claim against another co-tenant unless the other co-tenant is aware that the adverse claim is being asserted.
Acquisition of Limitation of Title by Railroad
There is nothing in the Texas statutes, or in the Texas body of law which would prevent a railroad from acquiring a fee simple title by limitations.
However, where a railroad enters into adverse possession of land, and constructs a railroad thereon, and fences a right-of-way, it will, as a general rule, acquire a mere easement, as distinguished from the full fee simple title. This is because the railway company usually has possession for railroad purposes only, and the fencing of the right-of-way does not add anything to the character of its use and occupancy, so as to constitute notice to the title holder that the land is being claimed adversely for the full fee simple interest, as distinguished from the mere right of user.
Where the railroad company takes a deed which purports to convey the fee simple title to the right-of-way to it and promptly records it, and enters into possession, it stands in the same situation as other persons with reference to the statutes of limitation. The deed constitutes notice of the extent of its claim, and, therefore, the railroad would be able to acquire full fee simple title to the property under the statutes of limitations.
Where the railroad enters into possession under a permissive grant, which does not purport to convey to it the fee simple title to the right-of-way, then the railroad will not acquire a fee simple title, simply because there is nothing of record or otherwise to alert the owner as to the character of the railroad's claim as being one for fee title.
Accrual of Cause of Action
Under the limitation statutes, the suit or action is barred upon the lapse of the applicable number of years after the accrual of the cause of action.
The cause of action accrues at the time suit can be brought against the limitations claimant.
Insofar as the owner is concerned, this is when the adverse claimant enters upon the land.
Suspension of Limitations
The filing of a lawsuit to recover land is, the primary method of suspending the running of the statute of limitations. If the suit is dismissed or abandoned, the suit may be ignored.
Where the party against whom there is a cause of action is out of the state at the accrual of the cause of action or at any time during which the same might have been maintained, the time of such party's absence is not counted. The person in whose favor the cause of action accrued may sue when the person returns. (C.P.&R. Code, Sec. 16.063) If, however, the person against whom the cause of action accrues is a nonresident of the state at the time of accrual of the cause of action, and remains such, the suspension of the statute does not apply.
Limitation stops upon the death of either the adverse claimant or the owner until 12 months after death or until qualification of an executor or administrator, whichever is first to occur. (C.P.&R. Code, Sec. 16.062) If there is no administration, the examiner should add one year to the applicable limitation period.
The disability statute (C.P.&R. Code, Sec. 16.022) applies to any person entitled to sue for the recovery of real property or assert any defense founded thereon. Such statute is applicable at the time such title shall first descend or the adverse possession commences. The disabilities contemplated are:
- person under 18, including a married person;
- person in U.S. Armed Forces in time of war;
- person of unsound mind.
The fact that title is vested in a trustee and the beneficiary of the trust is a minor does not prevent the statute from running.
Nature of Title After Perfection
Once a title has been perfected by limitation, it is a full title, precluding all claims. (C.P.&R. Code, Sec. 16.030)
Limitation title, like any other fee simple title, cannot be abandoned or conveyed verbally.
- Therefore, a mere verbal relinquishment of title at such time is insufficient.
- Furthermore, an acknowledgment of tenancy at such time does not divest
- If the claimant is married at the time of perfection of a pure limitation
title, the property will be community property.
- If, however, a married couple, as naked trespassers, commence the perfection
of a limitation title and one dies and the other eventually perfects the title,
it will become the survivor's separate property.
- The perfected limitation title cuts off defrauded creditors and judgment
creditors of the party against whom the title is perfected.
- The recordation statutes do not apply to a perfected limitation title. This means that one cannot be a bona fide purchaser for value of a record title where a perfected limitation title exists.
Severance of Minerals and Surface
If, at the time the limitation title is perfected, there has been no prior severance of minerals and surface, the adverse claimant acquires title to both.
If there has been a severance prior to entry by the adverse possessor, possession of the surface does not extend to the minerals.
The only way to acquire title to severed minerals by means of adverse possession is by drilling, producing and taking possession of the minerals.