### THE ATTORSEY GENERAL OF TEXAS
.April10, 1987

HonorableGamy Mauro Commissioner GeneralLaud Office 1700North CongressAvenue Austin,Texas 78701 OpinionNo. JM-675

Re: Restrictions on conveyauce of particular tracts of land deeded to the state for theuse andbenefit of the TlSdS Department of Mental Eealth andMentalRetardation

Dear **Mr.** Mauro:

The Asset Management Division of the General Land Office has requestedau opiniouas co the restrictions.if any, that exist on the
use or conveyance of surplus land in two tracts chatwere conveyed to the state ofTexas for theuse and benefit of the Texas Department of MentalHealth andMental Retardation. The deeds conveying these lands to the state contain **language** obligatingthe state cobuild facilities for the care of the mentally retarded on the respective tracts. The facilitieshavebeen constructed,andboth facilitiesoccupy onlypart of the land conveyedby thedeeds. You adviseus chat a lease, sale,
or tradeof the excess landwill not impair the continuedoperation of either of those facilities.

A tract inNueces Countywas conveyed to the scaceby the city of Corpus Christi. The other tract. in Tarranc County, was conveyed jointly to the stateby the Sid W. Richardson Foundation and theAmon G. CarterFoundation.

The city of Corpus Christideed, entitledWarrantyDeed, provides inpart that the city

in considerationof the promiseand the obligation of the State of Texas

. . . to plan and construct permanent, suitable, substantial, and fireproof buildings sufficient in all respects to care formentally retarded persons does hereby Grant, Bargain, Sell. and Convey unto the State of Texas

. . .the followingdescribed tractof land, situated inNueces County,Texas, co-wit:
[description]

The habendum clause contains language chat the above described premises are "for the use and benefit of the Corpus Christi State

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School as a school for the diagnosis, special training, education, supervision, treatment, care and control ofmentally retarded persons of the State of Texas and the city of Corpus Christi." The deed contains the furtherprovision that:

The consideration for this deed being the obligation of the state **to** construct upon said grounds prrmanent. suitable. substantial, and fireproofbuildings sufficient in all respects to
care for mentally retarded persons, unless said schoolbe establishedby commencementof construccion on **or** around September 1, 1968, and continue thereafter with due diligence, the title to the said premises shall automatically revest in the grantor, city of Corpus Christi. and this conveyance shallbe of no further force or effect.

Each of thedeedsby the two foundations.entitledDeed, provides inpart that the foundation

does Give, **Grant,** and Convey

. . .unto the **State** of Texas

. . . subject to the special conditions referred to hereinafter, a determinable fee interest in and to an undivided one-half (l/2) interest in and to all that certain tract and parcel of a land lying and being situated in Tarranc County, Texas, describedas follows:
[description]

Both the habendum clauses and warranty clauses contain the language "subject to **the** special conditions referred to hereinafter." The deeds concain the furtherprovision that:

This conveyance ISmade upon **the** specific conditions,which Granteehereinby theacceptance of thisdeed agrees toand accepts, that the State of Texas, Texas Department **of** Mental Health and **Mental** Retardation, will construct upon the above described property a school for the care of mentally retarded persons of the State which facility

. . . that the construction of such school will

. . . commence on or before September 1. 1973, and be thereafter diligently prosecuted to completion to the extent authorized by the aboveAct; that thepremises and any and allparts thereof. together with any and all improvements attached or affixed thereto shall foreverbe used forpublicpurposes.

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The goal of a court when construing a deed of conveyance is to ascertain the intention of the parties to the conveyance. The cases construing deeds involve the courts' interpretations of the language of the specific deeds in light of the facts and circumstancesunder which the deeds were executed. See Harkey v. liarkey,60 S.W.2d 834 (Tex. Civ. App. - Austin 1933,zt ref'd). Whether the deeds in question create covenants, conditions. or determinable fees and whether there is substantialcompliancewith any restrictionsrequires subjective interpretations of the language of the individual conveyances and factual determinations that we can not make with certainty in the opinion process. However, we will attempt to offer guidanceby discussingpolicies thathave been employedby the courts in construingdeedsand conveyances.

The cardinal rule for the construction of deeds is that the intention of the parties is co be ascertained and given effect and such intention is to be gathered from a consideration of the entire instrument, togetherwith the surrounding circumstances,unless such intention is in conflictwith someunbending canou of constructionor settled rule of property or is repugnant to the terms of the grant. Since the language of a deed is chat of the grantor, if there is any doubt as to its construction.it will be resolved against the grantor and in favor of the grantee. The largest estate that its termswill permitwillbe conferredon the grantee. SeeDilbeckv. Bill Gaynier, Inc., 368 S.W.Zd 804 (Tex. Civ. App. -Dallas 1963. writ rrf'd ze.); Gex v. Texas Company. 337 S.W.2d 820 (Tex. Civ. App. - Amarillo 1960,writ ref'd n.r.e.);Hedick v. Lone Star Steel Company, 277 S.W.2d 925 (Tex.Civ.App. - Texarkana 1955,writ ref'dn.r.e.).

It has long been established that the law does not favor forfeitures. The courts will not declare a forfeiture unless compelled to do so by language that will admit of no other construction. Forfeiture clauses fail in the event they are ambiguously expressed. If a provision is ambiguous,chat alonemay condemn ic as a forfeiture provision. See Link v. Texas Pharmacal Company. 276 S.W.2d 903 (Trx. Cl". App. -San Antonio 1955, no writ); W.F. White Land Co. v. Christenson, 14 S.W.2d 369 (Tex. Civ. App. - Fort Worth 1928, no writ).

The courts differentiate between types of deed restrictions on the use of land. Some are classified as covenants and others as conditions. A covenant is a promise on which a conveyance is executed, the breach of which gives the grantor a right of injunctive relief or an action for specificperformance or damages, but not a right of reinvestment of title. See W.F. White Land Co. v. Christenson, 14 S.W.2d at 371; see alsoRex v. Kotzur, 267 S.W. 759 (Tex.Civ.App. - San Antonio 1924,no writ); Ellioccv. Elliott, 109 S.W. 215 (Tex.Civ.App. 1906,writ ref'd).

**A** condition, oo the other hand, will have the effect of vesting
or reinvesting title. A frequent issue involving conditions is

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whrcher *the condition is a condition subsequent or whether ic is a special limitation and determinable fee. A condition subsequent designates ahappening that gives thegrantor a right to terminate rhe estate and. by re-entrv. to be reinvested with the title. The re_ investment is-not automatic but requires affirmative action by the grantor. See Community of Priests of St. Basil v. Byrne, 255 S.W. 601. judgmtydopted (Tax.Corn''' App. 1923). An estate subject to a special limitation restricting the use of land is created-when the languageof conveyanceprovides that the estate is granted so long as a designated conditiondoes or does not exist. It is a limitation on the duration of the estate. The estate granted is automatically terminated by occurrence of the condition. A determinable fee is a distinctive name chat has bean given a fee simple estate that is subject to a special limitation. See Colby v. Sun Oil Company, 288 S.W.2d 221 (Tex. Civ. Am. - GalGton 1956. writ ref'd n.r.e.): Wampler v. Barringcon, 2bi S.W.Zd 883 (Tex. Civ. App. - Texarkana 1953,writ ref'dn.r.e.);Daggett **v. City**  of **Fort** Worth, 177 S.W. 222 (Tex.Civ. App. - Amarillo 1915,no writ): Williams. Restrictions on theUse of Land: Conditions SubsequentandDeceminable Fees, 27 Tex. L. Rev. 158 (1948);Walkar. Property InterestCreatedBy Lease, 7 Tex. L. Rev. 8 (1929). Still another condition that may arise from an instrument of conveyance is a condition precedent, which is a condition that must take place before the estate can vest. A conditionprecedentpostpones thepassage of title from the grantor to the grantee until the condition is performed. See City of Dallas v. Etheridge. 253 S.W.2d 640 (Tex. 1952); SpinksF. First Christian Church ofVera, 273 S.W. 815. judgmtadopted (Tex.Comm'nApp. 1925).

Definitions of the different categories of restrictions are well established. The difficulty arises in construing the dead in each
case. Certain general principles for construing particular instruments have been developed, but it is not always easy to apply the principles to aparticular case.

As we previously **stated, the**  largest estate that the terms and language of the conveyance will permit will be conferred on the grantee. Thr courts construea provisionas a covenant rather thanas a condition if the terms are susceptible of that interpretation. Promises and obligations of the grantee are construed as covenants unless the languageand circumstancesof the conveyance clearly reveal
an intention to create a conditional estate. If the language has a doubtfulmeaning. the courtshaveheld it tobe a covenantrather than
a condition. Likewise, interpretation as a condition subsequent is less objectionable than construction as a special limitation or determinable fee. See Lawyers Trust Co. v. City of llouston_, 359 S.W.Zd 887 (Tex. 1962); Heame v. I sradshaw. ,312S.W.2d 948 (Tex. 1958);Zap&a v. Torres, 464 S.W.2d 926 (Tex.Civ.App. - Dallas 1971,
no writ); Hedick v. Lone Star Steel Co.. 277 S.W.Zd 925 (Tex. Civ. APP. - Texarkana 1955, writ ref'd n.r.e.); City of Wichita Falls v. Bmner, 165 S.W.2d 480 (Tex.Civ. App. - Fort Worth 1942,writ ref'd). As between a condition subsequent and a condition precedent, if the

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language of a conveyance creates doubt as to the nature of a condition, the courts hold that the conveyance imposes a condition subsequent rather than a conditionprecedent. Also, the fact chat a
**arancee** is entitled to possession and use of the property implies a Condition subsequent idstead of a condition precedent. Railroad Commission v. American Trading and Production Corp., 323 S.W.2d 474 (Tex.Civ.App. -Austin), cert. denied, 361U.S. 886 (1959).

The courts frequentlyhave found that the use of certain words and terms is indicative of the intention of the parties to a conveyance, but is not necessarily conclusive. We are not aware, however, of a case in which a court has construed the specific language and circumstances of the deeds conveying the two tracts in question for use by the Texas Department of Mental Health and Mental Retardation.

A mere recital of uses to which granted premises are to be applieddoesnot ordinarilycreatea conditionandmay not create even a covenant. It has longbeen settled thatwhere a deed contains apt language to grant an unconditional fee estate in land, other language in the instrumentwhich denotes that the land is granted for a particularpurpose is not regarded as implying that the grant is conditional. 1; Texas 6 P. Railway Co. v. Martin, 71 S.W.2d 867 (Tex. 1934). the court found that a deed where the grantors "granted" land "for-depot purposes and uses" conveyed a fee simple title without condition. In Hughes v. Gladewater County Line Independent School District, 76 S.W.2d 471 (Tex. 1934), the courtdetermined that a deed that contained a statement in both the granting clause and the habendum clause that the landwas to be used for schoolpurposes only did oat create either a condition subsequent or a special limitation that would have established the duration of the grant and did not constitute a covenant. Normally, there must be language of a right of re-entry if a condition subsequent is created and language of reversion or revesting of the property in the case of a determinable fee. See Davis v. Skipper, 83 S.W.Zd 318 (Tex. 1935); Gabert v. 0lcoct.m S.W.985 (Tex. 1893);Gahaganv. Texas 6 P. RailwayCo., 231 S.W.2d 762 (Tex.Civ.App. - Dallas 1950,writ ref'dn.r.e.);Toolev. Christ Church, Houston, 141 S.W.Zd 720 (Tex. Civ. App. - Galveston 1940, writ ref'd); Harris v. Rather, 134 S.W. 754 (Tex. Civ. App. 1911.writ ref'd).

Words of re-entry or forfeiture are not indispensable to the creation of a conditionbut are important'asevidence of au intention to impose one of the conditions on an estate. Where an express reversionaryclause in a deed to school trustees evidenced the intencion of the parties that the landwould revert to the grantor if the land ceased to be used for school purposes, the court couscrued the reverter clause as entitling the grantor to a recovery of the laud in
case itwas abandoned for schoolpurposes. SeeDickenson v. Board of Trustees, 204 S.W.Zd 418 (Tex. Civ. App. -Fort Worth 1947, &it ref'd).

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The use of the technical words "coudition" or “covenant” in a deed isnot totallydeterminative of the character of theprovision to which it refers. While the words "on condition" in a deed are apt words to create a condition, they do not necessarily do so. See Dilbeckv. Bill Gaynier, Inc., 368 S.W.2d at 807. The use of thewa "if" traditionally has been a strong indication that the parties intended a condition subsequent, although it is not conclusive. See - Lawyers Trust Co. v. City of Houston, 359 S.W.2d at 890. We are not
aware of a case inwhich a court addressed the significanceof theuse of the technical words "determinable fee interest" in the granting clause of a deed as was done in the conveyance of the Tarranc County tract. However, inWaters v. Ellis, 312 S.W.2d 231 (Tex. 1958), the Texas Supreme **Court** stated that “it is a recognized rule of construcdon that where there is a 'necessary repugnance' of clauses in a conveyance. the granting clause prevails over the other provisions of thedeed.' In another case, an agreementby a grantee to care for the grantor was found to be a covenant, and not a condition, even though the habendum clausewas followedby the phrase "subject to the terms and conditions hereinafter provided." Sisk v. Bandon, 70 S.W.2d 689 (Tex. 1934). A recitationof a grantee'spromise as consideration for
a conveyance, especially in the absence of language reserving the right to terminate the estate, does not in itself indicate an intention to convey a conditional estate. See Zapata v. Torres, 464 - S.W.2d at 929.

If a deed is for valuable consideration'as distinguished from a deed of gift or deed fornominal consideration,a courtwill lean more stronglyaway from a constructionthat creates a condition. See Toole -- at 720; Texas h P. Railway Co. v. Christ.Church, Houston. 141 S.W.2d
v. Martin, 71 S.W.2d at 870; Gabert v. Olcott. 23 S.W. at 987. In Community of Priests v. Byrne, w maintenance of a school without ra, land was conveyed for any other consideration. The court found that where the languagemanifested only an agreement toreconvey if the school was not maintained, the agreemept was only a covenant and title vested in the grantee without condition subsequent or special limitation.

It has been suggested that where there has been substantial compliancewith a covenant or condition in a deed, a transfer of part of the estate or a use other than thatcalled for in thedeed does not subject the estate to termination or give rise to a cause of action for damages. We agree that substantialcompliancewith the terms of a conveyanceprobably will prevent forfeiture of title or damages. See Boyt v. Geist. 364 S.W.2d 461 (To%. Civ. App. - Eouston 1963,o writ); Wanton v. City of San Antonio' 207 S.W. 951 (Tex.Civ. App. - San Antonio 1918, writ rrf'd). As previously stated, however, what constitutes substantialcompliance involves subjective interpretations of conveyances and determination of facts chat are not appropriate in the opinionprocess.

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A findingby a court that there has been substantial compliance with a conditiongenerallyhas preventeda forfeiture. InMcCarthy v. City of Houston, 389 S.W.2d 159. 163 (Tex.Civ. App. - Corpus Christ1 1965,writ ref'dn.r.e.). the court stated that “before a court should declare a reverter of a fee title under a condition subsequent. the facts shouldbe such as to show a definiteviolation or breach of the condition subsequent." Where a restriction required the grantee to
use land solely for ginpurposesand thepropertywas used for gin and additional purposes, the court held that the restriction did not preclude the use of theproperty for the other purposes so long as a gin was operated on the premises. While the deed provided that the propertywas to be used solely for gin purposes, itmade no provision for a reversion in case the property was used for a purpose in addition to gin purposes. The court said that the use for other purposes that did not interfere with use for gin purposes did not operate as a **reversion** of title. See Gleghornv. Smith, 62 S.W. 1096 (Tex.Civ. App. 1901, writ ref'd), In Davis v. Skipper, supta, the deed inquestionconveyedproperty tobe used for churchpurposes only andprovided that titlewould revest in thegrantor ifuse as a church
was abandoned. The court found a conveyanceof a determinable fee to the granteesanddetermined that so long as thepropertywas used for churchpurposes, therewas no intention to restrict its physical use, provided it was not used for some other inconsistent business or enterprise. In so finding, the Davis court quoted from an Indiana
case as follows:

The owner of a determinable fee in real estate has all the right of an owner in fee simple in regard to theuse or disposal of the real estate; he may use it in any way. may cut and sell the trees growing upon the land, strip the sod and clay from its surfsce. **take** out theminerals from underneath, sell it without restriction; his rights being equivalent to those of an owner in fee simple, save that his fee is liable to be defeated at any time by the occurrence of **the** contingencyby which it is determined. and. ifhe should sell, his purchaser would also take a determinablefee.

Hillis v. Dils, 100N.E. 1047, 1049 (Ind.App. Ct. 1913). See also Hammanv. City ofHouston, 362 S.W.2d 402 (To%.Civ.App. -'**Fort** Worth 1962, writ ref'd n.r.e.1 (part of tract'conveyed to city for park purposes condemnedby state forhighwaypurposes).

Texas courtshave adoptedthe generalpolicy that,where there is ambiguity in restrictions concerning the use of real property or substantial doubt as to the meaning of a restriction, the ambiguity and doubt will be resolved in favor of the freeuse of the land. See Baker v. Brackeen. 354 S.W.2d 660 (Tax.Civ. App. - Amarillo 1962.T

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writ) ; Burkhart v. Christian, 315 S.W.2d 668 (Tex. Civ. App. - Waco 1958,writ ref'dn.r.e.).

SUMMARY

In construingdeeds of conveyance, the courts ascertain the intentions of the parties co the deedsby interpretingthe languageof the specific deeds in light of the circumstances under which the deeds are executed. The courts have resolved doubt as to the construction of deeds in favor of grantees and have declared forfeitures of an interest in property only when the language of a deed permits no other construction. Where reacrictions exist, the courts have resolved doubt in favor of a covenant **rather** than a conditionand tend to find that a condition is a condition subsequent instead of a special limitation and determinable fee. Substantial compliance with a covenant or condition in a deed probably will preventdamages or a forfeitureof title. Whether specific deeds cream covenants, conditions, or determinable fees, and whether there is substantial compliance with a restriction, requires subjective interpretation of the language of the deed and factual determinations for which the article 4399 opinionprocesswas not intended.

**Very** truly **yours** 

# J

&

JACKHIGHTOW!B FirstAssistantAttorney General

MARYEELLER ExecutiveAssistantAttorney General

JUDGE ZOLLIE STEAXLIIT SpecialAssiacantAttorney General

RICK GILPIN Chairman,Opinion Committee
Prepared byNancy Sutton AssistantAttorneyGeneral JIM MATTOX AttorneyGeneral ofTexas

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