texas title examination standards: introduction and ... · allen d. cummings...

May 2015 Allen D. Cummings www.acummings-law.com

Texas Title Examination Standards:

Introduction and Practical Exercises

Center for American and International Law

* * * Texas Mineral Title Course

May 14 and 15, 2015 Houston, Texas

May 2015 Allen D. Cummings [email protected]

Texas Title Examination Standards: Introduction and Practical Exercises

TTS No. 1.10: Why Title Examination? Advise client of status of title Comments and/or objections - identify

irregularities, defects & encumbrances may reasonably be expected to materially

affect value or use may expose owner to litigation or adverse

claims – even if successful defense likely Requirements what must be done to

secure “marketable title”



TTS No. 1.20: Review What? Entire chain of title from sovereign to

present date Based on county records and/or prior title

opinions Unrecorded documents furnished by client If scope is limited carefully set forth limited

scope [and perhaps associated risks] Under “Materials Examined” describe in detail

records and unrecorded documents reviewed



TTS No. 1.20: Review What? Materials Examined

1. Digital Abstract on CD titled “Runsheet, for Company, covering 640 acres described in State of Texas Lease No. 00, Webb Cty, Tx from sovereignty to 1/29/2011 at 5:00 pm, consisting of 100 pages, with scanned images of documents.

2. Limited Leasehold Title Opinion dated 12/25/1966 by Allen Cummings for Texas Oil & Gas Corp. covering the same lands as State of Texas Lse No. from sovereignty as to depths from the surface to 4,000 feet subsurface from sovereignty to December 1, 1966 at 8:00 a.m.



TTS No. 1.20: Review What? Materials Examined

3. Certified Copy of Probate Proceedings on the Estate of John Brown, deceased, in Case No. 64-1001-PR, Atascosa County, Texas.

Patent Information Survey No. 100, Block Palafox, S. F. 10116, was patented

by the State of Texas to Jose Lima by Patent No. 200, Vol. 26-B, Records of the General Land Office, dated 9/30/1929, recorded Vol. 200, Page 400, Deed Records, Webb County, Texas, as containing 640 acres, described by metes and bounds in the Patent, reserving all minerals to the State.



TTS No. 2.10: MARKETABLE TITLE? Record title Free from reasonable doubt Prudent person with Knowledge of all salient facts,

circumstances and their legal significance

Would accept Not absolutely free from every suspicion Possible defect no probable basis ok



TTS No. 2.10: Not Marketable title? Necessity to rely on facts outside records Title by limitations Subject to outstanding oil & gas lease Subject to outstanding royalty Subject to an outstanding covenant Subject to an outstanding deed of trust,

judgment lien or tax lien Affidavits of heirship? – TTS 13.20



TTS Nos. 3.10 – 3.70: Name Variances Comment 1. Record title is in William

Conolly. Your oil and gas lease is executed by William Conley.

Requirement 1. None. See TTS 3.10 – Idem Sonans – sound alike, misspelled



TTS Nos. 3.10 – 3.70: Name Variances Comment 2. Record title is in Mary E.

Kurtz. Your oil and gas lease is executed by Mary E. Newlin nee Mary Kurtz.

Requirement 2. None. See TTS 3.40 – Recital of Identity may be relied on absent evidence to the contrary

May 2015

Allen D. Cummings [email protected]


TTS Nos. 3.10 – 3.70: Name Variances Comment 3. Record title was conveyed to

John Doe. Your oil and gas lease is executed by John Doe, Jr.

Requirement 3. Secure and submit for examination an affidavit of identity stating facts showing that John Doe, Jr. is one and the same person as John Doe



TTS Nos. 3.10 – 3.70: Name Variances Comment 4. Record was conveyed into

Joe Smith, et ux, Marie Smith. Your oil and gas lease is executed by Joe and Louise Marie Smith, husband and wife.

Requirement 4. ? Cautions: Similarity merely rebuttable presumption Look for contrary evidence



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Comment 1. Your oil and gas lease

recites is was executed on 7/1/2010, but it was acknowledged on 6/25/2010.

Requirement 1. None. See TTS 4.10 that provides that proper sequence of formalities may by presumed.



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Comment 2. Your lease is from Joe Doe,

Trustee, but is acknowledged by Joe Doe individually, not in his capacity as Trustee.

Requirement 2. It depends when filed for record and how long it has been of record. See TTS 4.20 & Tex. Civ. Prac. & Remedies Code §16.033 statute of limitations – 4yrs/2yrs after 9/1/2007.



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Comment 3. The Deed into your Lessor

dated 8/21/1963 is from Joe Doe, et ux, Mary, but does not contain privily & apart acknowledgement.

Requirement 3. The Deed is void as to Mary. What should be required will depend on other title facts. See TTS 4.20



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Absence of proper acknowledgement

does not affect validity of deed or other instrument. TTS 4.20

Recorded deed without proper acknowledgement is not constructive notice to creditors or BFP without notice. Is examiners review of deed without proper

acknowledgement actual notice?



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Comment 4. The Deed into your Lessor

was executed on 8/21/1963, but was not recorded until 1/15/1970, after the death of the grantor.

Requirement 4. Delay in recording, even after the death of the grantor, is not fatal. Absent contrary facts, delivery presumed on date of deed - consider investigation outside record TTS 4.30



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Comment 5. The records contain OGL from

Tom Terrific to ABC dated 2/1/2013, recorded on 2/15/2013. Records also contain OGL from Tom Terrific to XYZ dated 2/14/2013. ABC assigned its OGL to AHA Oil on 2/15/2013, who recorded same day. XYZ recorded its OGL on 2/18/2013.

Requirement 5. ?



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Texas is a notice recordation state ABC did not record its OGL before the OGL

given to XYZ Absent actual notice, XYZ had no constructive

notice of ABC OGL Even though AHA Oil recorded its Assignment

before XYZ records it OGL, XYZ prevails. TTS 4.40 Notice Recording System (adopted

8/2/2013)

May 2015



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Comment 6. The records show Bill Black

conveyed all the minerals in Black Acre to Will White by Quitclaim Deed dated 2/1/2013 recorded on 2/4/2013. The records also contain a Deed dated 1/25/2013 of one-half (1/2) of minerals to Willie Slick, recorded on 2/5/2013

Requirement 6. ?



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Even if Will White did not know of Willie

Slick’s deed, paid valuable consideration and recorded before Willie Slick, Will White cannot be an BFP

A grantee in a quitclaim deed cannot be a BFP against unrecorded instruments existing at the time of the quitclaim deed

TTS 4.90 Qualification as BFP (adopted 8/2/2013)



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Comment 7. 635 acs Section 1, are in Real Cty

- 5 acs are in Notreal Cty. Client OGL on Sec. 1 dtd 1/3/2014 and recorded 1/9/2014 in Real Cty. Client run sheet lists OGL dtd 1/2/2014, and recorded same day in Notreal Cty.

Requirement 7. Client OGL invalid. Record of OGL Notreal Cty constructive notice prior OGL on date of Client OGL. Record in either is notice in both Ctys TTS 4.50 (adopted 8/2/2013)



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Comment 8. Mineral Deed recites that it is

subject to a Deed of Trust in favor of Grantor. Client takes OGL from Grantee. Runsheet shows no such Deed of Trust.

Requirement 8. You are charged with notice of the existence and contents of unrecorded instruments referred to chain of title TTS 4.60 (adopted 8/2/2013) See Westland Oil Dev. Corp v. Gulf Oil Corp. 637 S.W.2d 903 (Tex. 1982)

May 2015



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation Comment 9. Mineral Deed conveying OGM

in Black Acre containing no warranty executed by Lyle Liar, as Trustee. Record title OGM owned ½ by Lyle as Trustee and ½ by Lyle individually. Client is grantee.

Requirement 9. None. A deed conveying land will convey Grantor’s individual interest as well. TTS 4.120(adopted 8/2/2013)



TTS Nos. 4.10 – 4.120: Execution, Acknowledgement & Recordation

TTS 4.70 Duty of Inquiry Based On Actual Notice

TTS 4.80 Duty of Inquiry Based On Possession TTS 4.90 Qualification As Bona Fide Purchaser TTS 4.100 Qualification As Lien Creditor TTS 4.110 Electronic Filing And Recordation TTS 4.120 Estoppel By Deed

( all adopted 8/2/2013)



TTS No. 5.10: LAND DESCRIPTIONS GENERALLY

TTS No. 5.20: LAND DESCRIPTIONS IN PATENTS

TTS No. 5.30: WATER BOUNDARIES TTS No. 5.40: ROADS

MaY 2015 Allen D. Cummings [email protected]


TTS No. 5.10: LAND DESCRIPTIONS GENERALLY A defective land description one of most

frequent instances of title failure Description must be sufficient to identify and

locate land on the ground If extrinsic evidence to be relied on,

descriptive words in deed are basis for admission



TTS No. 5.10: LAND DESCRIPTIONS GENERALLY

In determining the legal sufficiency of a description, an examiner may presume that errors, irregularities, deficiencies, and inconsistencies in a land description in the chain of title are not material unless, under the circumstances, a substantial uncertainty exists as to the identity of the land or the description fails to satisfy the minimal requirements essential to an effective conveyance. When examining a marginally sufficient or questionable land description, the examiner should consider all relevant factors, including the lapse of time, subsequent conveyances, the manifest or typographical nature of an error or omission, and accepted rules of construction.



TTS Nos. 6.10-6.70: CORPORATE CONVEYANCES Comment 1. Your lease is from XYZ

Corporation, recited to be a Delaware corporation, that is not registered to do business in Texas.

Requirement 1. None. Whether or not a foreign corporation has qualified to do business in Texas does not affect validity of its conveyance. TTS 6.30



TTS Nos. 6.10-6.70: Corporate Conveyances Comment 2. You lease dated 8/26/1989

is executed by the Secretary of XYZ corporation.

Requirement 2. Prior to 8/28/1989 only President & VP had presumed authority to execute corporate conveyance – now all officers. Of record >4yrs its ok. TTS 6.50



TTS Nos. 6.10-6.70: CORPORATE CONVEYANCES Comment 3. Your lease is executed by Joe

Doe, as attorney in fact for XYZ Corp. The records do not contain a power of attorney for Joe Doe.

Requirement 3. Secure, submit for examination and then record a power of attorney authorizing Joe to act for XYZ Corp. Authority not presumed. See TTS 6.50



TTS Nos. 6.10-6.70: CORPORATE CONVEYANCES Comment 4. Your lease is from XYZ Corp.,

however, the signature block has only the signature of Joe Does does not show it is executed by XYZ Corp.

Requirement 4. None. If properly acknowledged, the execution passes whatever title agent had authority to convey. TTS 6.60



TTS Nos. 7.10-7.50: CONVEYANCES INVOLVING PARTNERSHIPS, JVS, LLCS, ET AL. Comment 1. Title to the minerals is in

Joe Doe and Jack Sprat. Your lease is executed by Jack Sprat, as general partner of Doe and Sprat, a general partnership.

Requirement 1. Joe Doe must ratify your lease using present words of grant. TTS 7.40



TTS Nos. 7.10-7.50: CONVEYANCES INVOLVING PARTNERSHIPS, JVS, LLCS, ET AL. Comment 2. Your lease is executed by

Tom Tune as general partner of Tunes, LP. Requirement 2. None. A general partner

of LP has same authority as general partner of a general partnership. TTS 7.10.



TTS Nos. 7.10-7.50: CONVEYANCES INVOLVING PARTNERSHIPS, JVS, LLCS, ET AL. Comment 3. Your lease is executed by

Jim Grin, as Manager of Frowns, LLC. Requirement 3. None. Act of officer,

agent, manager or member binds LLC. TTS 7.50



TTS Nos. 8.10: Powers of Attorney. Comment 1. Your lease dated 9/1/1992 is

executed by AIF for record mineral owner. The records contain a PA authorizing AIF to sell the lands covered by your lease.

Requirement 1. Naked power to sell does not authorize AIF to execute lease. Obtain a ratification of your lease by mineral owner containing present words of grant, unless you can establish adverse possession. TTS 8.10

See Bean v. Bean, 79 S.W.2d 652 (Tex.Civ.App.—Texarkana 1935, writ ref’d);



TTS Nos. 8.10: Powers of Attorney. Comment 2. Your lease dated 8/1/1997

is executed by AIF pursuant to recorded durable PA in statutory form from the record mineral owner.

Requirement 2. Durable PA not cover oil & gas until 9/1/1997. Obtain Ratification as set forth above or rely on adv. poss’n.

March 2015 Allen D. Cummings [email protected]


TTS Nos. 8.10: POWERS OF ATTORNEY. Comment 1. Your lease dated 9/1/2010 is

executed by AIF for the record mineral owner, but recorded PA is not a statutory durable power of attorney.

Requirement 1. Obtain an affidavit from the AIF that on the date of your lease the PA had not been revoked, had not expired by its terms or operation of law, principal was alive and competent.



TTS Nos. 8.10: POWERS OF ATTORNEY. Comment 2. Your lease dated 9/1/2010 is

executed by AIF for the record mineral owner; recorded PA is a statutory durable power of attorney.

Requirement 2. Obtain an affidavit of AIF contemporaneous with transaction that AIF has no actual knowledge of any terminating event. TTS 8.10



TTS Nos. 9.10-9.20: Conveyances involving Trustees. Comment 1. Your lease is executed by

Joe Doe, as Trustee of the Mary Doe Trust dated January 1, 2003. The records do not contain a copy of the Mary Doe Trust.

Requirement 1. Obtain a Certification of Trust from the Trustee that complies with Tex. Prop. Code §114.086 stating authority of Trustee – TTS 9.10



TTS Nos. 9.10-9.20: Conveyances involving Trustees. Comment 2. Your lease is executed by

Jim Smith. There is a Mineral Deed to Jim Smith from John Smith, as Trustee.

Requirement 2. None. This in conveyance by “blind trustee.” TTS 9.20



TTS Nos. 10.10-10.30: CAPACITY TO CONVEY. Comment 1. You lease is executed by Joe

Doe, Guardian of the Estate of Jane Doe. Requirement 1. Obtain application for

appointment of guardian, citation & return, order appointing guardian, guardian oath & bond, application to execute lease, citation & return, order of sale, notice of sale, decree confirming sale. TTS 10.30

May 2015



TTS Nos. 11.10-11.100: Decendent’s Estates. Comment 1. You lease is executed by Joe

and Jane Smith, recited as only heirs of Jim Doe, Deceased. Records contain an Affidavit by Joe and Jane Smith attaching the Jim Smith’s will.

Requirement 1. Obtain death certificate, plus affidavit of marital history, death & heirship. Property passes on death to heirs; unprobated will not pass title. TTS 11.10



TTS Nos. 11.10-11.100: Decendent’s Estates. Comment 1. You lease dated 1/21/2011

is executed by Joe Smith, Indep. Ex’r u/w/o Jim Smith, Deceased, whose will was admitted to probate in 2004. The will does not expressly authorize Indep. Ex’r to sell assets of the Estate. The will devises all of his assets to his adult children, Jack and Jane Smith.



TTS Nos. 11.10-11.100: Decendent’s Estates. Requirement 1. Obtain an affidavit from

the Indep. Ex’r about whether there are debts and taxes owing by the Estate. If there are outstanding unpaid debts, then the Indep. Ex’r may have authority to act, however, if there is any doubt, then Jack and Jane Smith should ratify your lease with present word of grant. TTS 11.30



TTS Nos. 11.10-11.100: Decendent’s Estates.

Note However: Independent ex’r is empowered to perform

acts relating to settlement of estate that ex’r acting under court order could.

A probate court may order a sale of real property “when it is deemed in best interest of the estate.”

Procedure for closing estates rarely followed.

May 2015



TTS Nos. 11.10-11.100: Decendent’s Estates. Comment 1. You lease dated 1/21/2011 is

executed by Joe Smith, Indep. Ex’r u/w/o Jim Smith, Deceased, together with Jack and Jane Smith, the devisees.

Requirement 1. Obtain an affidavit from the Indep. Ex’r that all debts and taxes due on the Estate of Joe Smith have been paid, or that none were owning. TTS 11.50



TTS Nos. 11.10-11.100: Decendent’s Estates. Comment 1. You lease dated 1/21/2011

is executed by Joe Smith, Ex’r u/w/o Jim Smith, Deceased, together with Jack and Jane Smith, the devisees. Joe’s will was probated in New Mexico and a certified copy of the New Mexico probate proceedings are recorded in the county records.

March 2015 Allen D. Cummings [email protected]


TTS Nos. 11.10-11.100: Decendent’s Estates. Requirement 1. Obtain and file in the

county records an authenticated copy (a three-way certificate) of the will and order admitting the will to probate as required by Tex. Probate Code §95(c) – attested by and signature of the clerk of the court, signature of the judge that the attestation is in due form. TTS 11.100



TTS Nos. 12.10-12.160: Bankruptcies .10 – Relevance of Bankruptcy Cases to

Real Estate Transactions through .160 – Effect of Dismissal of Case.



TTS Nos. 13.10-13.40: Affidavits and Recitals Comment 1. The records examined contain

an Affidavit of Heirship dated 1/1/1990 that contains a jurat but not acknowledgement.

Requirement 1. None. After 9/1/1989 an affidavit does not need acknowledgement to be recorded – jurat is sufficient. TTS 13.10



TTS Nos. 13.10-13.40: AFFIDAVITS AND RECITALS Comment 2. The early chain of title is very

irregular. The records contain two affidavits of heirship dated 2/25/1946 concerning the ownership of the lands under examination. However, title based on affidavits may not be marketable.



TTS Nos. 13.10-13.40: Affidavits and Recitals Requirement 2. None. The affidavits are

ancient documents, i.e. in existence and recorded for at least twenty years. While there is no statutory authority, acceptance of the facts stated in affidavits in determining title is a long established custom and practice. TTS 13.20 and 13.40.



TTS Nos. 14.10-14.100: MARITAL INTERESTS

TTS Nos. 15.10-15.110: LIENS AND LIS PENDENS

TTS Nos. 16.10-16.40: FORECLOSURES



Title examination is an both a skill and an art based on facts, experience and judgment.


The End


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