Robert F. Ford, Jr. v. Exxon Mobil Chemical Company, a Division of Exxonmobil Corporation

235 S.W.3d 615 · Texas Supreme Court · 2007

Facts

In 1998, Mobil Chemical Company acquired a pipeline easement across three tracts of land. The initial recorded deed ambiguously described the servient estate, referring to another deed that covered only one tract, though a map showed three. An amended easement later clarified it crossed all three tracts. Robert Ford then bought these three tracts, expressly subject to Mobil's easements. Four months later, Ford signed another amendment, relocating the pipeline's route across all three tracts in return for $20,000. Ford claims he signed this amendment only because Mobil falsely represented that the original easement already covered all three tracts, when it only covered one. Five years after signing this last amendment, Ford sued for real estate fraud.

Issue

The primary legal question is whether Robert Ford's fraud claim regarding a pipeline easement is barred by the statute of limitations. A secondary issue is whether his equitable action to quiet title and remove the pipeline is also subject to and barred by the statute of limitations.

Holding

The court held that Robert Ford's fraud claim is barred by the four-year statute of limitations. Furthermore, his equitable action to quiet title and remove the pipeline is also barred by limitations, as deeds obtained by fraud are voidable, not void, and cannot evade limitations by being recast in equity.

Rule

A fraud claim must be brought within four years of when the fraud should have been discovered by reasonable diligence, with recorded instruments in a grantee's chain of title generally providing constructive notice. An equitable action to remove a cloud on title is not subject to limitations if a deed is void or expired by its own terms. However, this rule does not apply when a deed is merely voidable, such as one obtained by fraud, because voidable deeds remain effective until set aside. Once limitations expire for setting aside a voidable deed for fraud, that bar cannot be evaded by asserting the claim in equity, as doing so would undermine the purpose of limitations in real estate cases.

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