Title Issues to Remember Flashcards
Basic Elements of a Title Opinion
- Addressee - Names of the clients
- Title/Type of Opinion - What type of opinion is it?
- Legal Description of Land Covered by the Opinion
- Materials Examined
- Fee Title
- Comments and Requirements
- Exhibits
Issues that cannot be addressed in a title opinion
Unfiled liens
Boundaries of Property
Incompetency
Fraud
Minority
Forgery
Duress
Reliance on Prior Title Opinion
You can rely on a prior title opinion, but it is better if you don’t. If the client insists you should include a disclaimer that you did not know the examiner and that you are not vouching the accuracy of their work.
Relinquishment Act and Patents - How do you address?
1895 -1931 are the dates for the Relinquishment Act
Patent itself may not reserve minerals to state but still might be reserved to the state. Contact the GLO and get a classification letter where they should tell you if the state owns them or not. If they say minerals classified, then the landowner does not own the minerals, the state of TX does and you have to get a release from the state.
H gives an oil and gas lease on Feb 1, to A who does not record. H then conveys the same lease to B four days later. B is a BFP does not know about A and he pays value for the lease. B then records. Who wins between B and A?
B wins because B did not have notice prior to the lease. Therefore, B is a BFP. TX is a notice state. Even though A bought the lease first, he did not record so there was no notice to B and B didn’t know about A, so B wins.
H gives an oil and gas lease on Feb 1, to A, who does not record. H then conveys the same lease to B four days later. B has no notice of the prior lease and pays value. B records. A signs the lease to C. Who wins between C and B?
B wins. C steps into the shoes of A, and B is still a BFP.
Statute of Frauds - Rule
If the writing itself does not give you an adequate description of the land, either within itself or by reference to another document, so that you can find it on the ground then the whole instrument is void.
SoF Examples:
- North 60 acres more or less.
- North 60 acres of section 8.
- 60 acres out of section 8.
- Northwest quarter of section 8 and section 8 is a perfect square.
- Void under SoF
- Does not violate SoF
- Violates the SoF; don’t know what the out of language refers to.
- Does not violate SoF.
Blanket Conveyances - Letter in the mail says: “I want to buy your specific mineral interest in Potter county.” Under that clause there is another that says: “ I want to buy your specific interest and all other land that you own in the county.” You sign the letter without reviewing it. Is this valid?
Per Davis v. Mueller, the effect of a blanket conveyance is that it conveys everything you own in that county. These types of conveyances are perfectly legal.
Strip and Gore Doctrine
If a deed conveys an interest in land bounded by a non-navigable stream or by the right-of-way of a street, alley, highway or railroad in which the grantor owns the fee, the grantee will take title to the center line of the non-navigable stream or right-of-way strip, unless the deed expressly provides otherwise.
Hooks v. Neill
Conveyed means divide amount reserved by the amount conveyed.
Divide by the interest conveyed.
If you convey a 1/2 mineral interest but reserve a 1/32. You divide the 1/32 by the conveyance, so you actually only reserved 1/64.
King v. FNB Wichita Falls
Described means all
Where a fraction designated in a deed is stated to be a mineral interest in land described in a deed the fraction is to be calculated upon the entire mineral interest.
Minchen v. Hirsch
“Out of” means the full interest. Handwriting prevails over printed form every time.
Reserving a 1/16 out of a 1/4 conveyance is the total 1/16
“Of” alone means a reduction of the interest conveyed.
Reserving 1/16 of a 1/4 conveyance is a 1/64.
Hoffman v. Magnolia
Two-grant theory. When a conveyance grants two interests, both are valid. (“Subject to”)
U.S. Shale v. Laborde
The Supreme Court reversed the Court of Appeals and (like the trial court) held the deed reserved a floating royalty interest.
Fixed vs Floating Royalty- A “fixed” royalty is set in stone, for all posterity. It is an unchanging fraction of total production. A “floating” royalty, by contrast, is dynamic. It is a fraction of the royalty under the active mineral lease.
For many years, in both reservation and conveyance of royalty interests, the fraction of 1/4 of 1/8 meant a 1/32 fixed royalty or 1/32 total production of the well regardless of the amount of royalty reserved in the lease. Recent cases, including Laborde (Tex 2018) held that 1/2 of 1/8 was not 1/16 but rather was 1/2 of 1/5 which was the current royalty stated in a modern lease, so the court found that the royalty was not 1/16 but 1/10. The rationale is called the “Mistaken Estate Doctrine” based on the assumption that people back in the 1950s when the Laborde deed was signed, believed that the lease royalty would always be 1/8 and could not envision that one day it could be 1/5. In reality, it is a legal fiction because we can not know what they thought except what is written in the deed. It is currently a very hot issue in Texas.
Take subsequent conveyance.
Analysis of Oil & Gas Leases - Basic Elements
Primary Term: Initial period during which a well may be drilled
Continuous Development: Drilling an additional well permits the lessee to keep the lease in force after the expiration of the primary term.
Proportionate Reduction Clause: If the lessor owns less than the entire mineral estate underlying the leased premises, the royalties, and other payments, owed to the lessor under the lease, will be reduced so that the lessor will receive only their proportionate share of such royalties or other payments.
Affidavits of Heirship
Need: Two disinterested witnesses who testify as to the family history. Witness can be a family member as long as they are disinterested.
Small Bill
Patent survey lines are not supposed to cross navigable streams. However, the Small Bill (effective March 3, 1929) validated patents to land crossing navigable streams where the patent had been issued at least ten years prior to the enactment of the statute. It passed title to the river bed to the patentee to the extent necessary to convey the number of acres contained in the patent.
Name Variances
Presumption that the name is correct unless there is a suffix or a genuine question that the name refers to a different person.
Idem Sonans - An examiner may presume that differently spelled names refer to the same person when the names sound alike or when their sounds cannot be distinguished easily or when common usage by corruption or abbreviation has made their pronunciation identical.
Suffixes - A suffix may rebut the presumption of identity with the prior grantee.
Same Name Affidavit - Get a same name affidavit if you think/know it is the same person. A written document that establishes that various different names found on various ID’s/documents refer to one person.
Westland Oil Corp. v. Gulf
You must advise the client of outstanding encumbrances affecting the title that are disclosed by recitals in instruments appearing in the chain of title. This is constructive notice, and you have a duty to inquire.
