Air-Ag, Inc. v. F & H Santa Fe Rail, Inc.

22 S.W.3d 596, 2000 Tex. App. LEXIS 3429, 2000 WL 679191
CourtCourt of Appeals of Texas
DecidedMay 25, 2000
DocketNo. 2-99-324-CV
StatusPublished
Cited by4 cases

This text of 22 S.W.3d 596 (Air-Ag, Inc. v. F & H Santa Fe Rail, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Air-Ag, Inc. v. F & H Santa Fe Rail, Inc., 22 S.W.3d 596, 2000 Tex. App. LEXIS 3429, 2000 WL 679191 (Tex. Ct. App. 2000).

Opinion

OPINION

TERRIE LIVINGSTON, Justice.

I. Introduction

In this case we reaffirm the long-standing rule in Texas that a tenant may not challenge its landlord’s title. Despite this general rule, however, appellants Air-Ag, Inc., George Mullino, and Rule Cooperative Gin & Elevator Company contend in their first issue that one or more exceptions to the rule apply and, in their second issue, challenge the title of their landlord, F & H Santa Fe Rail, Inc. (F & H). Because we hold no such exception applies under the facts of this case, we overrule appellants’ first two issues. In their third issue, appellants argue railroad property, once abandoned, should revert automatically to adjoining landowners. Because appellants are tenants and have no ownership interest in the property, they lack standing to argue ownership in an absent third party; we therefore overrule appellants’ third issue. In light of our rulings on appellants’ first two issues, we also hold there are no genuine issues of material fact concerning F & H’s title; we therefore overrule appellants’ final issue arguing to the contrary and affirm the trial court’s judgment.

II.Background Facts

For almost a century, a 156-mile stretch of land in North Texas — a portion of which is the subject of this case — served as a railroad line. Originally, the right-of-way was acquired from landowners by deed, [598]*598easement, or condemnation. In 1965, the Atchison, Topeka & Santa Fe Railroad Company (ATSF) purchased this rail line from the Kansas City, Mexico and Orient Railway Company of Texas. In 1969, 1975, and 1977, the ATSF leased the three disputed sections of land either to appellants or to their predecessors:

1. The “Air-Ag Lease:” May 5, 1969, Contract No.131278, to Patrick C. Le-roux, later assigned to Air-Ag., Inc.;
2. The “Rule Co-Op Lease:” October 17, 1975, Contract No. 148518, to W.T. Adkins, later assigned to Rule Co-Op.;
3. The “Mullino Lease:” October 31, 1977, Contract No. 153335, to George Mullino.

Each of the three leases required the lessee to make annual rental payments, and each lease provided that it could be terminated at any time by either party upon 30 days’ written notice. In 1991, ATSF sold the line and assigned the leases to the Texas & Oklahoma Railroad Company (T & 0). Sometime in 1994, T & 0 petitioned the Interstate Commerce Commission (ICC) for approval to abandon the line, and on September 18, 1995 the ICC approved the petition. T & 0 abandoned the line and removed the tracks and equipment shortly thereafter.

Two years later, on March 27, 1998, T & 0 conveyed the land by deed to F & H, a business corporation. T & 0 also assigned the leases to F & H’s president who in turn assigned them to F & H a year later. Holding the deed and leases to appellants’ tracts of land, F & H considered itself owner and landlord of those tracts. In 1998 and pursuant to the terms of the leases, F & H gave 30 days’ written notice to appellants either to vacate the premises or to purchase the land.

Appellants brought this suit seeking a declaration that the conveyance from T & 0 to F & H was void, that F & H did not own title, and that F & H was not entitled to force appellants off the land. F & H counterclaimed, asking the court for a declaration that it is both fee simple owner of the three tracts of land and appellants’ landlord. Both sides sought summary judgment, F & H moving not only on the declaratory grounds stated, but also in trespass to try title, seeking to dispossess appellants from the property.

The court granted F & H’s motion for summary judgment, sustaining its claim in trespass to try title, and declaring F & H’s right to immediate possession of the premises, its ownership of the Mullino and Rule Co-Op properties and improvements in fee,1 and its capacity as lessor of all properties. The court further ordered appellants to vacate and surrender the properties, leaving all fixtures and improvements intact.

III. Discussion

A. Estoppel

The general, well-established rule is that a tenant cannot dispute its landlord’s title while in possession under that landlord. See, e.g., Lorino v. Crawford Packing Co., 142 Tex. 51, 175 S.W.2d 410, 415 (1943). In other words, a tenant is estopped to deny its landlord’s title or to claim adversely to the landlord, and it is immaterial whether the landlord had title at the time the lease was entered. See Rockport Shrimp Coop. v. Jackson, 776 S.W.2d 758, 760 (Tex.App.—Corpus Christi 1989, writ denied). The tenant, having reaped all the benefits from the lease agreement, may not dispute the authority of the person from whom those benefits are derived. See Lorino, 175 S.W.2d at 417. A tenant is also estopped from denying the title of those who suc[599]*599ceed to the original lessor’s title “because it is the title under which the tenant enters that relates to the estoppel and not the individual owner of the title.” Rockport, 776 S.W.2d at 760.

Appellants concede that if this general rule applies, the trial court’s declaration of F & H’s right to possession of all three tracts and its right to title in the Rule Co-op and Mullino tracts may be sustained. Nonetheless, appellants contend in their first issue that one or both of two exceptions to this general rule apply. We disagree.

Appellants cite two cases for the proposition that the general rule does not apply when the purpose of the suit is not only to recover possession, but to establish title. See Lorino, 175 S.W.2d at 417; McKie v. Anderson, 78 Tex. 207, 14 S.W. 576, 576 (1890). Appellants argue that because the purpose of their suit (and F & H’s counterclaim) is to establish both title and possession, this exception applies here. This argument fails for two reasons.

First, appellants do not claim title in themselves. For the exception to apply, the tenant must itself claim superior title over the landlord. See McKie, 14 S.W. at 577 (stating it is incumbent upon the tenant to prove a superior title with which it is connected); Rockport, 776 S.W.2d at 761 (“The exception permits a tenant of one who has no title to acquire the superior title and show title in itself.”). A tenant holding a mere leasehold estate cannot claim a right to the exception because “superior title must be in the tenant itself.” Rockport, 776 S.W.2d at 761. Attornment to a third party, even if the third party has a title superior to the landlord’s title, does not affect the tenant’s relationship with the original landlord, or entitle the tenant to deny or dispute its original landlord’s title. See id.

This exception is necessarily narrow, for otherwise it would swallow the rule. The estoppel rule prevents a tenant from taking its landlord to court by alleging superi- or title in a third party whose interests are primarily at stake.

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Bluebook (online)
22 S.W.3d 596, 2000 Tex. App. LEXIS 3429, 2000 WL 679191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/air-ag-inc-v-f-h-santa-fe-rail-inc-texapp-2000.