CLE: 2010: The Texas Land Title Examination Standards

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CLE: 2010: The Texas Land Title Examination Standards

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Peter E. Hosey

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St. Mary's University School of Law San Antonio Texas Alumni Homecoming, St. Mary's University School of Law Alumni Homecoming

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2010-03-12

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St. Mary's University School of Law Alumni Homecoming

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RFC3778

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English, en-US

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Presented:
St. Mary 's University School of Law Homecoming CLE Reunion
March 12, 2010
San Antonio, Texas

THE TEXAS LAND TITLE EXAMINATION
STANDARDS

Peter E. Hosey

Peter E. Hosey
Jackson Walker L.L.P.
112 E. Pecan Street, Suite 2400
San Antonio, Texas 78205
phosey@jw. com
210-978-7700

Biographical Sketch

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Peter E. Hosey
Peter E. Hosey is a Partner in the San Antonio, Texas office of Jackson Walker L.L.P. He
received a Bachelor of Arts degree from The University of Texas at El Paso in 1976, and is a
1979 graduate of St. Mary' s University School of Law. He practices primarily in the areas of oil
and gas, title and transactional matters, real estate law, business law, and international business
law. Since 1998, he has served on the Joint Editorial Board for the development of the Texas
Title Examinations Standards established by the Real Property, Probate and Trust Law and Oil,
Gas and Energy Resources Law Sections of the State Bar of Texas, which are published in the
Texas Property Code. He is a member of the San Antonio Bar Association (has been several
times President and Treasurer of the Natural Resources Committee of the San Antonio Bar
Association), a member of the American Bar Association and the State Bar of Texas. He is also
a member of the College of the State Bar of Texas. He is a frequent lecturer and writer on oil,
gas and land title issues. He recently spoke at the 50th Annual Rocky Mountain Mineral Law
Foundation Institute, the State Bar of Texas, 23rd Annual Advanced Oil, Gas and Energy
Resources Law Course, the 2007 University of Houston Advanced Oil and Gas Short Course, the
35th Annual Ernest E. Smith Oil & Gas Mineral Law Institute. He also wrote, "Title To Uranium
And Other Minerals (Still Crazy After All These Years)," which was published in the Oil, Gas
and Energy Resources Law Section Report, December 2008. He is currently an Adjunct
Professor of Law at St. Mary's University School of Law, teaching Texas Land Titles.

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TITLE 2-APPENDIX
TEXAS TITLE EXAMINATION STANDARDS
For easier reference, the Title Examination Standards appear in their entirety in
the pocket part ofVTC.A., Property Code, vol. 1.
As Initially Adopted by the
Section ofReal Estate, Probate and Trust Law and the Oil, Gas and Energy
Resources Law Section ofthe State Bar ofTexas on June 27, 1997, as revised
through June 27, 2008

By
THE TITLE STANDARDS JOINT EDITORIAL BOARD OF
THE SECTION OF REAL ESTATE, PROBATE AND TRUST LAW AND
THE OIL, GAS AND ENERGY RESOURCES LAW SECTION OF
THE STATE BAR OF TEXAS

Executive Editor: Edward H. Hill
Editor: Owen L. Anderson
Assistant Editors:
Douglas W. Becker
William B. Burford
A.W. Clem
H. Martin Gibson
James L. Gosdin
Mari C. Haley
Charles B. Harris
Peter E. Hosey
Jan E. Rehler
George A. Snell, Ill
Roderick E. Wetsel
Past Assistant Editors:
William A. Abney (served 1990-2006)
David R. Duckworth (served 1990-2006)
Nancy A. Lynch (served 2000-2008)

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1

CHAPTER I
TITLE EXAMINER
1.10. Purpose OfTitle
Examination.
1.20. Review By Examiner.
1.30. Consultation With Prior
Examiner.

6.60. Name Omitted From
Signature.
6.70. Name Variances.

CHAPTER VII
CONVEYANCES
INVOLVING
PARTNERSHIPS,
JOINT VENTURES,
LIMITED LIABILITY
COMPANIES, AND
UNINCORPORATED
ASSOCIATIONS
7.10. Conveyance Of Real
Property Held In Partnership Or
Joint Venture Name.
7.20. Authority Of Less Than
All Partners Regarding
Transactions That Are Not In
The Ordinary Course Of
Business.
7.30. Prior Conveyance In
Chain By Partnership Or Joint
Venture.
7.40. Conveyance Of
Partnership Property Held In
Name Of Partners.
7.50. Conveyance Of Real
Property Held In Name Of
Limited Liability Company.

CHAPTER II
MARKETABLE TITLE
2.10. Marketable Title Defined.
CBAPTERlll
NAME VARIANCES
3.10. Idem Sonans.
3.20. Middle Names Or Initials.
3.30. Abbreviations.
3.40. Recitals Ofldentity.
3.50. Suffixes.
3.60. Variance In Name Within
An Instrument.
3.70. Variances In Name Of
Spouse.
CHAPTER IV
EXECUTION,
ACKNOWLEDGMENT,
AND RECORDATION
4.1 0. Omissions And
Inconsistencies.
4.20. Defective
Acknowledgments.
4.30. Delivery; Effective Date ;
Delay In Recordation.

CHAPTER VIII
POWERS OF ATTORNEY
8.10. Validity Of Instrument
Executed By Attorney In Fact
Regarding Durable Powers Of
Attorney Executed Before
September 1, 1993, And All
Non- Durable Powers Of
Attorney.
8.20. Validity Of Instrument
Executed By Attorney In Fact
Regarding Durable Powers Of
Attorney Executed Mter
September 1, 1993.

CHAPTERV
LAND DESCRIPTIONS
5.10. When Defective Land
Descriptions Do Not Impair
Marketability.
CHAPTER VI
CORPORATE
CONVEYANCES
6.10. Corporate Existence.
6.20. Corporate Authority
Presumed.
6.30. Foreign Corporations.
6.40. Corporate Seal.
6.50. Authority Of Particular
Officers.

CHAPTER IX
CONVEYANCES
INVOLVING TRUSTEES
9.10. Powers OfTrustee.

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Ordinary Course Of Business In
Proposed Transaction.
12.90. Authority To Convey
Property Of The Bankruptcy
Estate In The Ordinary
Course Of Business In Proposed
Transaction.
12.100. Authority To Convey
Property Of The Bankruptcy
Estate Free And Clear Of Liens
In Proposed Transaction.
12.110. Authority To Convey
Property After Confrrmation Of
Plan.
12.120. Authority To Mortgage
In Proposed Transaction.
12.130. Filings In Violation Of
The Automatic Stay.
12.140. The Discharge And
Judgment Liens.
12.150. Extension Of Time.
12.160. Effect Of Dismissal Of
Case.

9.20. Title As "Trustee"
Without Further Identification
Of Trust.

CHAPTER X
CAPACITY TO CONVEY
10.10. Minority.
10.20. Mental Capacity.
10.30 Guardians.
CHAPTER XI
DECEDENTS' ESTATES
11.10. Passage Of Title Upon
Death.
11.20. Estate Proceedings.
11.30. Conveyances By An
Executor.
11.40. Conveyances By An
Administrator.
11.50. Conveyances By Heirs
Of An Estate.
11.60. Liens For Debts And
Taxes.
11.70. Heirship Affidavits.
11.80. Community Survivors.
11.90. Community
Administration.
11.1 00. Foreign Wills.

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CHAPTER XIII
AFFIDAVITS AND
RECITALS
13.10. Affidavit Defmed.
13.20. Reliance Upon
Affidavits.
13.30. Affidavits OfNonProduction.
13.40. Reliance Upon Recitals.

CHAPTER XII
BANKRUPTCIES
12.10. Relevance Of
Bankruptcy Cases To Real
Estate Transactions.
12.20. Authority For Prior
Transfer.
12.30. Reliance Upon Recitals
Of Authority For Prior Transfer.
12.40. Authority For Proposed
Transfer By Debtor Or Trustee.
12.50. Authority To Convey
Exempted Land In Proposed
Transaction.
12.60. Authority To Convey
Abandoned Land In Proposed
Transaction.
12.70. Authority To Foreclose
Land In Proposed Transaction.
12.80. Authority To Convey Or
Lease Property Of The
Bankruptcy Estate Not In The

CHAPTER XIV
NL\RITALINTERESTS
14.10. Community Property
Presumption.
14.20. Gifts, Devise And
Descent.
14.30. Conveyances Between
Spouses.
14.40. Separate Property
Consideration.
14.50. Community Property
Presumption May Be Rebutted
By Showing Of Domicile In
Common Law Jurisdiction.
14.60. Necessity For Joinder
When Community Property Is
In Name Of Both Spouses.

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14.70. Necessity For Joinder
When Community Property Is
In Name Of Only One Spouse.
14.80. No Presumption Of
Marriage.
14.90. Homestead.
14.100. Divorce Or Annulment.

15.70. Payment Of Ad Valorem
Taxes.
15.80. Priority Of Ad Valorem
Tax Lien.
15.90. Lien Priority And
Subordination.
15.100. Removal OfLien.
15.110. Lis Pendens.

CHAPTER XV
LIENS AND LIS PENDENS
15.10. Liens Generally .
15.20. Involuntary Mechanics'
And Materialmen's Liens.
15.30. Judgment Liens.
15.40. Implied Vendor's Liens.
15.50. Other Involuntary
Statutory Liens.
15.60. Federal Tax Liens.

CHAPTER XVI
FORECLOSURES
16.10. Nonjudicial Foreclosure.
16.20. Judicial Foreclosure And
Execution Sales.
16.30. Foreclosure Of Home
Equity Loans And
Reverse Mortgages.
16.40. Deeds In Lieu Of
Foreclosure.

4

PREFACE
TEXAS11TLEEXANDNATIONSTANDARDS
In 1989, the Council of the Section of Real Estate, Probate and Trust Law of the State Bar of
Texas approved the formation of a committee to study the formulation and development of title
examination standards. Through the newsletter of that Section, Section members were notified of
the project. Lawyers from all parts of Texas responded evidencing their interest in working as
active participants on this project. Subsequently, the Oil, Gas and Mineral Law Section (now the
Oil, Gas and Energy Resources Law Section) of the State Bar of Texas asked to co-sponsor this
project
After substantial study of the use of title examination standards and many hours of drafting
and meeting time, proposed standards were published for comment in 1996 in the newsletters of
both of the sponsoring sections. Following the receipt of comments from lawyers across Texas,
additional revisions were made by the committee (now the "Title Standards Joint Editorial
Board") and the proposed standards were once again published for comment in the Spring of
1997.
At the State Bar of Texas Convention on June 27, 1997, 33 standards were approved by both
the Section of Real Estate, Probate and Trust Law and the Oil, Gas and Mineral Law Section. The
initial standards constituted the beginning of title examination standards in Texas. Under current
procedure, the Title Standards Joint Editorial Board, appointed by these two sections, meets at
least semiannually to consider amendments to existing standards and additional standards. As
with the initial standards, amendme~ts or new standards are presented to the membership of these
two sections prior to formal adoption; however, the Board makes changes to the comments and
cautions as needed. In keeping with this process, the Comments, Cautions, Sources, and Histories
have been updated from the initial Standards.
DISCLAIMER AND INTRODUCTION

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Disclaimer: These title examination standards represent the collective consensus of The
Title Standards Joint Editorial Board established by the Section of Real Estate, Probate and
Trust Law and the Oil, Gas and Energy Resources Law Section of the State Bar of Texas.
These standards should not be construed as retlecting the opinion o.- the State Bar of Texas,
its officers, members or staff. These standards are presented with the understanding that
neither the publisher nor the Joint Editorial Board is engaged in rendering legal services. In
no event shall the Joint Editorial Board, the reviewers, or the publisher be liable for any
direct, indirect, or consequential damages resulting from use o.- this publication, including
damages resulting from the sole or concurrent negligence o.- the Joint Editorial Board, its
members, the reviewers, or the publisher.
Because statutory law prohibits title insurance companies from insuring against loss by
reason of unmarketable title, these standards do not apply to title examination for purposes
of title insurance. See Tex. Ins. Code Ann., Ch. 9. Moreover, these standards do not apply to
the exercise of discretion by a title insurance company in determining the insurability of
title.
Standards for real estate title examinations are statements that declare an answer to a question
or a solution for a problem that is commonly encountered in the process of a title examination.
Their purpose is to alleviate disagreements among members of the bar regarding real estate
transactions and to set forth propositions (standards) with which title lawyers can generally agree
concerning title documents to promote uniformity in the preparation, use, and meaning of such
documents. In other words, title standards can be viewed as a reference that can be consulted in
the preparation and examination of title documents. Although standards do not, by themselves,
impose compulsory legal requirements, they do establish guidelines upon which a reasonable and

5

practical examination can be based. And although standards should state fundamental and
enduring principles, they are subject to amendment as required by changes in governing law and
in title and conveyancing practice.
Title standards may address a variety of concerns, including the attitudes and relationships
among examiners and between examiners and the public, the appropriate duration of a title
search, the effect of the lapse of time on a defective or improperly recorded title document, the
appropriate presumptions of fact that can be relied upon in the course of an examination, and the
law applicable to commonly encountered situations. Standards should represent the near
unanimous opinion of the experienced and competent title bar.
Even with title standards, however, title examiners must advise their clients honestly as to
their beliefs and opinions regarding the ownership of a particular interest in land. The judgment
of an examiner must necessarily reflect rules of law (both legislative and case law) as well as
justifiable presumptions that are applicable to title documents and to fact situations arising from
the chain of title appearing of record. For example, when the name of a grantee in one deed
corresponds with the name of the grantor in a later deed, the universal practice is to presume that
they are the same person. And although there is nothing of record to show that the grantor was
competent, that the signature is genuine, or that the deed was actually delivered, the universal
practice is to presume that these are facts. Indeed, any attempt to require proof of these matters
regarding each document in the chain of title would create chaos.
Of course, when minor title questions do arise, the reaction of different examiners may not
always be the same. For example, title examiners may respond differently regarding the effect of
a recorded, unacknowledged deed; of a deed that fails to state the marital status of the grantor; or
of a deed from a married grantor that does not contain the signature of the grantor' s spouse. Thus,
a chief objective of title standards is to set forth uniform principles to resolve certain common
title problems.
Users of these Standards are cautioned that individual Standards, Comments, and
Cautions may not reflect current case law and statutes. There is a lapse of time between the
time that changes in law occur and the updating of the Standards, Comments, and
Cautions. Users are invited to notify the Joint Editorial Board iftbey believe that any ofthe
Standards, Comments, or Cautions fail to reflect current law.

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CHAPTER I
TITLE EXAMINER
Standard 1.10. Purpose Of Title Examination
The purpose of an examination of title and comments, objections, and requirements is to
advise an examiner' s client of the status of title and of the methods by which the client may
secure marketable title to real property. Based upon the materials examined, the title opinion
should advise an examiner's client of all irregularities, defects, and encumbrances that may
reasonably be expected to affect materially the value or use of the property or that may expose the
owner to litigation or adverse claims even if the litigation or adverse claims can reasonably be
expected to be successfully defended. The examiner does not ordinarily determine the validity or
priority of irregularities, defects and encumbrances.

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Comment:
A major goal of title standards is to eliminate technical objections that do not impair
marketability and common objections that are based upon a misapplication of law. An examiner
should determine what irregularities, defects, and encumbrances have been discovered by the
examination. Then an examiner should determine, to the extent reasonably possible, who, if
anyone, can take advantage of each irregularity, defect, or encumbrance against the owner and/or
client, and if there are consequent risks.
Source:
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 2.1 (1960).
History:
Adopted, June 27, 1997, amended June 16, 2006. The original standard provided: "The
purpose of an examination of title and comments, objections, and requirements is to advise an
examiner's client of the status of title and of the methods by which the client may secure
marketable title to real property. Based upon the materials examined, the title opinion should
advise an examiner's client of all irregularities, defects, and encumbrances that may reasonably
be expected to affect materially the value or use of the property; or that may expose the owner to
litigation or adverse claims even if the litigation or adverse claims can reasonably be expected to
be successfully defended."
Standard 1.20. Review By Examiner
Based upon the intended scope of the examination, an examiner should review any
documents, records, deeds, abstracts, affidavits, or other reliable materials that are necessary to
form a legal opinion as to the status of title to the property. The materials that are examined
should be set forth in the title opinion or as an exhibit to the opinion.
Comment:
An examiner's opinion will usually be based upon the entire chain of title starting from the

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date that the title passed from the sovereign to the present. Occasionally, an examiner may base
an opinion upon a chain of title covering a shorter time period. For example, an examiner may
limit the examination to instruments in the chain of title that were recorded after the period
covered by a prior title opinion that was submitted by the client and prepared by another attorney;
however, in this instance, the examiner is well advised to make certain that the client understands
that the client assumes the risk of any deficiencies in the prior opinion.
The documents that are available for examination may vary, but they must be sufficient for an
examiner to be legally satisfied as to the status of title to the property. Disclosure of the
documents examined is necessary to advise the client of the basis for the opinion and to protect an

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examiner from documents and matters not considered. The examining attorney is usually not
responsible for identifying or gathering the documents to be examined, but should assess the
acceptability of the methods employed in doing so and should disclose any instance in which the
methods employed are not generally considered to be the most reliable.
The scope of an examiner's opinion may be limited at the request of the client or to suit the
client's particular purpose or property interest. The nature and scope of the documents examined
may be limited accordingly. Under such circumstances, an examiner should carefully set forth the
limited scope of the opinion, and an examiner should be reasonably certain that the opinion is
adequate for the client's purpose.
Source:
Title Standards Joint Editorial Board.
History:
Adopted, June 27, 1997.

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Standard 1.30. Consultation With Prior Examiner

When an examiner discovers a situation that creates a question regarding the status of title
and an examiner has knowledge that another examiner has examined the title, or is familiar with
the situation in the context of other property, an examiner may, before preparing the opinion,
communicate with the other examiner if such communication is in the best interests of an
examiner's client and does not violate the Texas Disciplinary Rules of Professional Conduct.
Comment:
Communication with the prior attorney is a discretionary matter. A prior examiner may not be
readily available for consultation, or communication with the prior examiner may not be
economically justified.
Caution:
A prior examiner may represent an adverse or potentially adverse party, making such
communication inappropriate.
Source:
Oklahoma Title Examination Standards, Std. 1.2.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 2.2 (1960).
History:
Adopted, June 27, 1997.
CHAPTER II
MARKETABLE TITLE
Standard 2.10. Marketable Title Defined

All title examinations should be based on marketability oftitle. A marketable title is a record
title that is free from reasonable doubt such that a prudent person, with knowledge of all salient
facts and circumstances and their legal significance, would be willing to accept it. To be
marketable, a title need not be absolutely free from every possible suspicion. The mere possibility
of a defect that has no probable basis does not show an unmarketable title.
Comment:
Except as otherwise provided in these standards, if a title examination reveals the need to rely
on facts outside of the record, the title is unmarketable. An example would be facts that must be
proven by parol evidence or by presumptions of fact that would probably, in the event of suit,
become genuine issues of fact. Whether the potential lawsuit would likely be won by the party

8

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with apparent record title is immaterial, because threat or probable likelihood of litigation renders
the title unmarketable. On the other hand, a title need not be perfect to be marketable. A doubt
about title must be a reasonable doubt and be serious enough to affect its value.
Usually, the buyer's attorney examines the title and identifies any title defects. If the
examiner prepares a written opinion, any title defects will be listed together with a statement of
the necessruy requirement(s) to cure each defect. The opinion may also contain comments about
the title that are intended to inform the buyer of any concerns about the title that do not affect
marketability. Usually in response, the seller's attorney or other agent obtains the curative
instruments or takes other necessruy action to cure any title defects. Such curative efforts are
usually submitted to the buyer's attorney for approval prior to closing. If a title defect cannot be
cured prior to closing, the buyer must decide whether to accept the defective title or rescind the
transaction.
Caution:
Matters that may make a title unmarketable include:
(1) Land acquired by limitation title, Greer v. International Stock Yards Co., 43
Tex.Civ.App. 370,96 S.W. 79 (Tex.Civ.App. 1906, writrefd).
(2) Land acquired by accretion, Gaines v. Dillard, 545 S.W.2d 845 (Tex.Civ.App.-Fort
Worth 1976, writ ref'd n.r.e.).
(3) Title that is subject to an outstanding oil and gas lease, Roberts & Corley v.
McFaddin, Weiss & Kyle, 74 S.W. 105 (Tex.Civ.App. 1903, writ denied).
(4) Title that is subject to an outstanding royalty interest, Sweet v. Berry, 236 S.W. 531
(Tex.Civ. App.-Amarillo 1921, writ dism'd).
(5) Title that is subject to an outstanding covenant, Dupree v. Savage, 154 S.W. 701
(Tex.Civ.App. - Amarillo 1913, writ ref d).
(6) Title that is subject to an outstanding easement, Shaw v. Morrison, 14 S.W.2d 953
(Tex.Civ.App. - Eastland 1929, no writ).
(7) Title that is subject to a mortgage, judgment lien, or tax lien, Crutcher v . Aiken, 252
S.W. 844 (Tex.Civ.App.-El Paso 1923, no writ).
Source:
Lund v. Emerson, 204 S.W.2d 639 (Tex.Civ.App.-Amarillo 1947, no writ).
Owens v. Jackson, 35 S.W.2d 186 (Tex.Civ.App.-Austin 1931, writ dism'd w.o.j .).
Texas Auto Co. v. Arbetter, 1 S.W .2d 334 (Tex.Civ.App.-San Antonio 1927, writ dism'd
w.o.j .). Austin v. Carter, 296 S.W. 649 (Tex.Civ.App.-Eastland 1927, writ dism'd).
Alling v. Vander Stucken, 194 S.W. 443 (Tex.Civ.App.-San Antonio 1917, writ ref d).
Adkins v. Gillespie, 189 S.W. 275 (Tex.Civ.App. -Dallas 1916, no writ).
3A Aloysius A. Leopold, Land Titles and Title Examination § 10.6 n. 1 (Texas Practice 3d
ed. 2005).
History:
Adopted, June 27, 1997.
CHAPTER ill
NAME VARIANCES

Standard 3.10. Idem Sonans

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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.

Comment:

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This standard expresses the common law rule of " idem sonans." If a name in a legal
document is incorrectly spelled but, when commonly pronounced, conveys to the ear a sound
practically identical to the correct name as commonly pronounced, then the name thus given can
be accepted as sufficient identification. Means v. Protestant Episcopal Church Council, 503
S.W.2d 591, 592 (Tex.Civ.App.- Houston [1st Dist.] 1973, writ ref'd n.r.e.); Dingler v. State,
705 S.W.2d 144, 145 (Tex.Crim. App.l984). Thus, if the grantee in one deed is " John
Macomber" and the grantor in the next deed is " John McOmber," these names are presumed to
refer to the same person. Or, if the grantee in one deed is "William Conolly" and the grantor in
the next deed is "William Conley," the same presumption may be made.
In Cockrell v. Estevez, 737 S.W.2d 138, 139 n.l (Tex. App.-San Antonio 1987, no writ),
the court noted that under the rule of idem sonans, absolute accuracy in the spelling of a name is
not required in a legal document. As long as the incorrect spelling sounds practically identical to
the correct name (in this instance "Cockrall" and "Cockrell"), there is sufficient identification
of the named person. See also Chumney v. Craig, 805 S.W.2d 864 (Tex. App.-Waco 1991, writ
denied) (" Damon" and "Damond"); O'Brien v. Cole, 532 S.W.2d 151 (Tex.Civ.App.- Dallas
1976, no writ) ("O'Brian" and "O'Brien"). In Hill v. Foster, 181 S.W.2d 299, 304
(Tex.Civ.App.-Amarillo 1944), aff'd, 186 S.W.2d 343 (Tex.l945), the court applied the rule of
idem sonans and held that it is immaterial if a slight discrepancy exists between the name used in
the body of the deed and the name signed thereto. The court determined that, through
typographical error, the name "Barclay" used in the body of the deed was intended to be
"Baxley," but the two names, although spelled differently, sounded enough alike to be idem
sonans.
Caution:
Similarity of names is never more than a mere rebuttable presumption of identity. Turner v.
Roberts, 513 S.W.2d 957, 959 (Tex.Civ.App. -Fort Worth 1974, no writ). Texas law is unclear
where the difference in spelling regards the first letter of the surname (e.g.," Pfister" and
" Fister," "Pharnsworth" and "Farnsworth" ). Because the official title indices in Texas are
grantor-grantee and grantee-grantor (in contrast with a tract index), names like "Fister" and
" Pflster" would not be indexed in the same portion of the indices.
Source:
Citations in the Comment.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 5.1 (1960).
5 Aloysius A. Leopold, Land Titles and Title Examination § 32.4 (Texas Practice 3d ed.
2005).
History:
Adopted, June 27, 1997.

Standard 3.20. Middle Names Or Initials
Unless otherwise put on inquiry, an examiner may presume that the use of a middle name or
initial in one instrument and its nonuse in another instrument does not raise an issue of identity
that affects title.
Comment:
Similarity of names is ordinarily sufficient identity in the chain of title. In the absence of
evidence casting doubt upon the identity of a party to a conveyance, such similarity is controlling
in nearly every instance. Knox v. Gruhlkey, 192 S.W. 334 (Tex.Civ.App.-Amarillo 1917, writ
ref'd). The similarity of "H. Percy Forster" to " H. P. Forster" was found to be sufficient
evidence of identity in a trespass-to-try title action in Corder v. Foster, 505 S.W.2d 645, 649
(Tex.Civ.App.-Houston [lst Dist.] 1973, writ ref'd n.r.e.).
Caution:

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Similarity. of names is never more than a mere rebuttable presumption of identity. Turner v.
Roberts, 513 S.W.2d 957,959 (Tex.Civ.App.-Fort Worth 1974, no writ).
Source:
Citations in the Comment.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 5.2 (1960).
History:
Adopted, June 27, 1997.
Standard 3.30. Abbreviations
An examiner may presume that any customary and generally accepted abbreviation of a first
or middle name is the equivalent of the full name.

Comment:
A commonly known diminutive or abbreviation is sufficient to identify a person in the
absence of evidence indicating that a different person was intended. Salazar v. Tower, 683
S.W.2d 797, 799 (Tex. App.-Corpus Christi 1984, no writ). "Terry" is a sufficient
identification of " Terrance. " O'Brien v. Cole, 532 S.W.2d 151 (Tex.Civ.App.-Dallas 1976, no
writ).
Caution:
Similarity of names is never more than a mere rebuttable presumption of identity. Turner v.
Roberts, 513 S.W.2d 957,959 (Tex.Civ.App. -Fort Worth 1974, no writ).
Source:
Citations in the Comment.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 5.3 (1960).
History:
Adopted, June 27, 1997.
Standard 3.40. Recitals Of Identity
An examiner may rely upon a recital of identity contained in a conveyance executed by the
party whose identity is recited, unless the examiner has a reasonable basis for questioning the
recital. If title is held in a name that appears to be a business name, an examiner may rely on a
recital of identity that incorporates the words "doing business as" ("dba") or similar words
(e.g., "John Smith, dba Wholesome Grocery Store"), unless the form of name or other facts
appearing from the materials examined raise a contrary inference.

-

Comment:
An examiner often encounters conveyances in which the grantor's name is not the same as
that of the record owner, but which recite the identity between the two. Frequent examples
include instruments using words such as " also known as" ("aka") ("Robert T. Jones, Jr., aka
Bobby Jones" ); "formerly" or "formerly known as " ("fka" ) ("Mary Smith, formerly Mary
Jones"); and "nee," which means " born as" (" Mary Lincoln, nee Todd" ). Even though these
instruments are usually executed only by the person whose identity is recited and might
technically be regarded as self-serving, such recitals are, practically universally, accepted as fact
to complete the chain of title.
The rule here expressed is grounded in the notion that similarity of names is sufficient to
establish identity of persons when there is no evidence to the contrary. See Chamblee v. Tarbox,
27 Tex. 139, 144-45 (1863). Cf., Dittman v. Cornelius, 234 S.W. 880 (Tex. Comm'n App. 1921,
judgm ' t adopted) (holding that proof of identity need not be conclusive). In Haney v. Gartin, 113
S.W. 166 (Tex. Civ. App. 1908, writ denied), the objection was made that "Mary E. Kurtz," one

11

of the grantors, was not shown to have a connection with the title, although the deed contained a
recital that "Mary E. Kurtz" was "formerly Mary E. Newlin." This recital was sufficient, said
the court, to show that " Mary E. Kurtz," who signed the deed, was the same person as " Mary E.
Newlin," to whom the land had been devised. Recitals of identity were likewise deemed
sufficient to explain discrepancies between the names of grantors and the record owners in
Auerbach v. Wylie, 19 S.W. 856 (Tex. 1892) and Russell v. Oliver, 14 S.W. 264 (Tex. 1890).
With some exceptions, the Assumed Business or Professional Name Act, Tex. Bus. & Com.
Code Ann. Ch. 71, requires persons and entities doing business under an assumed name to file a
certificate thereof in specified offices. Failure to file the required certificate does not void or
impair transactions by the offending party. Paragon Oil Syndicate v. Rhoades Drilling Co., 277
S.W. 1036 (Tex. 1925); Tex. Bus. & Com. Code Ann. §71.201. Reference to a county 's assumed
name certificate records may be helpful in resolving identity questions and may be relied upon in
the absence of inconsistent information.
As to the use of recitals generally, see Standard 13.40. For guidance generally concerning
conveyances involving business entities, see Chapters VI and VII, infra.
Caution:
On occasion an examiner may be presented with names which, although recited to be
alternative names of the same person, are entirely dissimilar. Under such circumstances the
examiner must bear in mind the presumption that names that are not the same refer to different
persons. See Fox v. Grand Union Tea Co., 236 S.W.2d 56 1, 563 (Tex. Civ. App.-Austin 1951,
no writ). Unless the instrument recites some further explanation or qualifies as an ancient
document (see Comment to Standard 13.40), or supporting facts otherwise appear in the record,
an examiner should require further inquiry.
Although recitals of identity may be relied upon for business entities in the chain of title as
well as for individuals, authority for reliance may be weaker in the case of business entities. See
Texas Co. v. Lee, 157 S.W.2d 628, 630-31 (Tex. 1941). Prudence dictates the exercise of greater
care in considering recitals of the identity of business entities, particularly when it is practical to
obtain documentation. See Standard 6.70.
The name of a business entity may raise an inference contrary to a recital of identity. For
example, appellations such as " Inc." or "Corporation," ordinarily denoting a particular form of
organization, would contradict a recital that the entity is an individual, or a different kind of
entity, doing business under the corporate name. If a business entity's name tends to contradict a
recital of identity, a requirement of further investigation and proof of identity is warranted. Other
examples of words and abbreviations that connote a particular kind of entity are " L.L.C.,"
"L.C.," or " Ltd. Co." for a limited liability company, " Ltd." or "L.P." for a limited
partnership; and " L.L.P." for a limited liability partnership. On the other hand, the word
"Company" or " Co." in the name of a business entity is widely used in many different forms of
business and should not be regarded as signifying any particular one. (The examiner should bear
in mind that words and abbreviations occurring in the names of entities incorporated or registered
in other jurisdictions might have connotations different from those that would apply to Texas
entities.)
Source:
Citations in the Comment.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 5.4 (1960).
5 Aloysius A Leopold, Land Titles and Title Examination §§ 32.6, 32.9 (Texas Practice 3d
ed. 2005).
History:
Adopted, June 27, 1997; amended, June 15, 2001. This amendment was primarily adopted for
the purpose of accommodating a new chapter on affidavits and recitals. (Chapter XIII). The
original standard provided: "Absent actual or constructive notice that a recital of identity may be

12

-

-

,...

untrue, an examiner may rely upon a recital of identity contained in a conveyance executed by the
person whose identity is recited. A recital of a statement of fact, marital status or identity of
heirship is prima facie evidence of the truth of the recital if the document containing such
statement has been of record in the deed records of the applicable county for at least five years. A
recital in an 'ancient document' is admissible as evidence of the recited facts ."

Standard 3.50. Suffixes
Although identity of a name raises a presumption of identity of a person, an examiner should
take note of the addition of a suffix, such as ..Jr." or ..11," to the name of a subsequent grantor
because such a suffix may rebut the presumption of identity with the prior grantee.
Comment:
Ordinarily a suffix is not considered a part of the name. Thus, where the grantee in one
instrument is " John Doe, M.D." and the grantor in the next instrument is merely " John Doe," it
would be presumed that they are the same person. However, if the grantee in one instrument is
" John Doe, Sr." and the grantor in the next instrument is "John Doe, Jr.," the presumption that
they are the same person would be rebutted. Or, if the grantee in one instrument is " John Doe,"
and in another instrument the grantor is " John Doe, Jr.," the presumption of identity may be
rebutted.
The Texas Supreme Court, in a case concerning service of process, reversed a court of
appeals' decision that had held that the addition or omission of the suffix "Sr." or " Jr." was
immaterial. Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884 (Tex. l985). The
issue in the case was whether a citation that had been issued in the name of " Henry Bunting"
satisfied the rules of civil procedure where the registered agent was listed as "Henry Bunting,
Jr." Without elaborating, the Texas Supreme Court held that the discrepancy in names
invalidated the service of process under the rules of civii procedure.
Source:
Citations in the Comment.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 5.5 (1960).
History:
Adopted, June 27, 1997.

Standard 3.60. Variance In Name Within An Instrument
Where a grantor's signature differs from the grantor's name as it appears in the body of the
deed, but the name given in the acknowledgment agrees with either the signature or the name as it
appears in the body of the deed, an examiner should accept the certificate of acknowledgment as
providing adequate identification.

-

-

Comment:
An officer may not take an acknowledgment unless the officer knows or has satisfactory
evidence that the acknowledging person is in fact the person who executed the instrument. Tex.
Civ. Prac. & Rem. Code Ann. § 121.005. This requirement is sufficient to create a presumption of
identity when the signature differs from the body of the deed but the acknowledgment agrees with
one or the other. Numerous cases have held that a certificate of acknowledgment is considered
prima facie evidence of all facts therein recited and that the recitals are conclusive unless fraud or
duress is shown.
Caution:
This general rule should not be extended beyond relatively minor variances, such as the use
of a full given name in one place and initials in another, or a variance between a middle initial

13

used in the body of the deed and a different one in the signature. A deed purporting to be from
Robert Jones but signed by John Smith certainly should not be passed.
Source:
Bell v. Sharif Munir-Davidson Dev. Corp., 738 S.W .2d 326 (Tex. App. -Dallas 1987, writ
denied).
Stout v. Oliveira, 153 S.W .2d 590 (Tex.Civ.App. -El Paso 1941, writ refd w.o .m .).
Oklahoma Title Examination Standards, Std. 5.2.
Lewis A. Simes & Clarence B. Taylor, Model Title Standards, Std. 5.6 (1960).
5 Aloysius A. Leopold, Land Titles and Title Examination §§ 32.6, 32.9 (Texas Practice 3d
ed. 2005).
History:
Adopted, June 27, 1997.

Standard 3.70. Variances In Name Of Spouse
If a grantee spouse in one instrument of conveyance is identified only by a title and last name
(e.g., " John Smith and Mrs. John Smith, grantees") and such spouse is apparently identified in a
succeeding instrument in the chain of title by both a given and last name (e.g., " John Smith and
Mary Smith, grantors" ), an examiner should require further evidence showing that such spouse
(e.g ., Mrs. John Smith) in the first instrument is the same person as the spouse (e.g ., Mary Smith)
in the second instrument. The same requirement should be made if these succeeding forms of
identification are reversed (e.g ., the grantees in the first instrument are " John Smith and Mary
Smith" and the grantors in a succeeding instrument in the chain of title are " John Smith and Mrs.
Jolut Smith" ).
Comment:
This standard conforms to the practice of Texas title examiners.

Caution:
Although this standard conforms to title examination practice, no Texas cases are directly on
point.
Source:
Lewis M . Simes & Clarence B. Taylor, Model Title Standards, Std. 5.8 (1960).
History:
Adopted, June 27, 1997.

CHAPTER IV
EXECUTION, ACKNOWLEDGMENT, AND RECORDATION
Standard 4.10. Omissions And Inconsistencies
Omission of the date of execution from an instrument affecting title does not, in itself, impair
marketability. An examiner may presume that an undated instrument has been timely executed if
the dates of acknowledgment and recordation, and other circumstances of record, support the
presumption.
Inconsistencies in recitals or dates (such as among dates of execution, attestation,
acknowledgment, or recordation) do not, in themselves, impair marketability, and an examiner
may presume that a proper sequence of formalities occurred.
Comment:
The date of execution is not essential to an instrument' s validity or delivery. Dunn v. Taylor,
113 S.W. 265, 268 (Tex.1908); Webb v. Huff, 61 Tex. 677, 679 (1884); Owen v. State, 26

14

-

S.W.2d 251, 253 (fex.Crim. App.1930). See generally 5 Aloysius A. Leopold, Land Titles and
Title Examination § 36.2 (Texas Practice 3d ed. 2005). The date on an instrument, like other
recitals, is important, if the date is in issue, and the given date is presumptively correct, but
subject to rebuttal or explanation. Farrell v. Comer, 84 S.W.2d 300, 303 (fex.Civ.App. -Fort
Worth 1935, no writ); Owens v. Jackson, 35 S.W.2d 186, 188 (fex.Civ.App.-Austin 1931, writ
dism'd w.o.j .); Brown v. Rodgers, 248 S.W. 750 (fex.Civ.App.-Amarillo 1923, no writ). The
same is true of the date of attestation and, generally, of acknowledgment. Wilson v. Curry, 151
S.W.2d 356,358 (Tex.Civ.App.- Fort Worth 1941, writ dism 'd).
The critical date-that of delivery- is not normally found in the instrument. See Standard
4.30. Hence, omission of the date from one conveyance in an ordinary series of conveyances may
be disregarded. Even though special importance may attach to the date of execution, as in the case
of a power of attorney, there is a presumption of timely execution (i.e., in proper sequence in
relation to other instruments) if such is supported by other dates and circumstances of record.
Because recitals of dates may be omitted or explained, are notoriously inaccurate, and are
more generally in error than are the actual sequences of formalities, inconsistencies in the
indicated dates of-formalities (e.g., acknowledgment dated prior to execution or execution dated
subsequent to indicated date of recordation) should be disregarded. Further, the inconsistency or
impossibility of a recited date should not be regarded as vitiating the particular formality
involved. Brown v. Rodgers, supra; Wilson v. Curry, supra; Owen v. State, supra; Panhandle
Construction Co. v. Flesher, 87 S.W.2d 273,275 (Tex.Civ.App.-Amarillo 1935, writ dism' d).
Regarding instruments that have been filed for record, examiners should consider Tex. Civ.
Prac. & Rem. Code Ann. § 16.033, which contains a four-year (two-year, effective September l,
2007) statute of limitations that bars certain actions to recover real property based upon acts and
omissions specified in the statute. Act of June 15, 2007, 80th Leg., R.S., ch. 819, § 2, 2007 Tex.
Gen. Laws 1695 (nonretroactivity provision). For further discussion, see Comment and Caution
to Standard 4.20. In addition, Tex. Lac. Gov't Code Ann. § 19l.007(k) provides that a recorded
instrument that fails to meet certain specifications relating to page size, paper weight, font size,
legibility, and other technical matters, is deemed to have been properly recorded.
Tex. Prop. Code Ann. § 12.00ll addresses the requirements for recordation. Effective
September 1, 2007, this was amended to provide that a paper document attached as an exhibit to a
paper affidavit or other document having an original signature or signatures and acknowledged,
sworn to with a proper jurat, or proved according to law, may be recorded and, if recorded,
imparts notice.

Caution:
If, under the circumstances indicated by the record, a date has a particular significance (e.g.,
for a priority or for an important presumption), an inconsistency or impossibility should not be
disregarded.
Source:
Citations in the Comment.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 6.2 (1960).
5 Aloysius A. Leopold, Land Titles and Title Examination § 36.2 (Texas Practice 3d ed.
2005).
History:
Adopted, June 27, 1997.
Standard 4.20. Defective Acknowledgments
If a certificate of acknowledgment does not conform to the exact wording of the applicable
statute, but shows substantial compliance with the statutory requirements for acknowledgments,
an examiner should not require corrective action. If a deed or other instrument contains an
acknowledgment in substantial noncompliance with the applicable statute or does not contain any

15

acknowledgment whatever, an examiner should not require that such defects be cured if the
instrument has been of record for at least twenty years and no adverse claim appears. Otherwise,
the examiner should require a corrected acknowledgment and re-record the instrument, or require
and record a new, corrected instrument. A proper jurat may substitute for an acknowledgment for
instruments recorded on or after September 1, 1989.
Comment:
In general, an instrument is entitled to be recorded only if acknowledged or proven by
witnesses according to law. Tex. Prop. Code Ann. § 12.001. The proper forms for
acknowledgments are expressed by statute. Tex. Civ. Prac. & Rem. Code Ann. §§ 121.001121.015. A jurat may substitute for an acknowledgment in instruments recorded on or after
September 1, 1989. Tex. Prop. Code Ann. § 12.00l(a).
A jurat is a certificate signed by the officer before whom an instrument was executed, stating
that the instrument was subscribed and sworn to before the officer by the person executing the
instrument.
Carpenter v. State, 218 S.W.2d 207, 208 (Tex.Crim. App.1949); Robertson v. State, 8 S.W.
659 (Tex.Crim. App. l888). Subject to an exception (discussed in the following paragraph), an
acknowledgment certificate must include the officer's seal of office, Tex. Civ. Prac. & Rem.
Code Ann. § 121.004, and this is also presumably true for a proper jurat, if the officer has a seal.
Missouri Pacific Railway Co. v . Brown, 53 S.W. 1019 (Tex.1899). For a listing of the officers
who may take acknowledgments or proofs, see Tex. Civ. Prac. & Rem. Code Ann. § 121.001. For
a listing of officers who may administer oaths and supply a jurat, see Tex. Gov't Code Ann. §§
602.002-602.005.
An acknowledgment or jurat which does not include an official seal and which is taken in the
United States or its territories is invalid only if the jurisdiction in which the acknowledgment or
jurat is taken requires the attachment of an official seal. Tex. Civ. Prac. & Rem. Code Ann. §
121.004. The secretaty of state must annually furnish the county clerks with a list of states that
require an official seal. Tex. Gov't Code Ann. § 405.019.
An acknowledgment or jurat that does not include an embossed or printed seal is not invalid
on an electronically transmitted authenticated document that legibly reproduces the required
elements of the seal. Tex. Gov't Code Ann. § 406.013 .
An acknowledgment or jurat may be satisfied by the electronic signature ofthe notary public
so long as all required information is attached to or logically associated with the signature or
record. Tex. Bus. & Com . Code Ann. § 322.011.
Subject to the Caution noted below, the absence or presence of a proper acknowledgment
does not affect the validity of a deed or other instrument. Tex. Prop. Code Ann. § 13.00l(b);
Haile v. Holtzclaw, 414 S.W.2d 916, 928 (Tex.1967). Substantial compliance with the statutory
acknowledgment requirements is sufficient. " If the strict compliance with the letter of the law
was exacted, we have no doubt that it would destroy and invalidate thousands of records, long
since made and believed to have been in accordance with the law." Dom v. Best, 15 Tex. 62, 66
(1855). Omission of mere formal parts of the acknowledgment certificate, such as the recitation
that the instrument was executed ''for the consideration and purposes therein stated,'' will not
invalidate it, so long as the material parts are present, though all such parts should be included for
the sake of regularity. Monroe v. Arledge, 23 Tex. 478 (1859). No particular form of words is
required, so long as the certificate shows on its face that all prerequisites to a valid
acknowledgment were in fact complied with. Williams v. Cruse, 130 S.W.2d 908 (Tex.Civ.App
- Beaumont 1939, writ ref' d).
The necessaty prerequisites for an acknowledgment are that the signer personally appeared
before the officer, that the signer was known to the officer to be the person whose name is
subscribed to the instrument, and that the signer acknowledged that the signer executed the same
for the purposes and considerations therein stated. Sheldon v. Farinacci, 535 S.W.2d 938, 942

16

(fex.Civ.App.-San Antonio 1976, no writ). Since August 31, 1981, these essential elements
may be fulfilled by a simple certificate stating that the instrument "was acknowledged" by the
signer (and, if other than as an individual, the signer' s particular capacity). Tex. Civ. Prac. &
Rem. Code Ann. §§ 121.006, 121.008. An acknowledgment may be considered in connection
with the deed to which it is attached to supply some missing ingredient. Thus, where the
acknowledgment is made by a corporate officer but fails to state the officer's capacity or that the
acknowledgment is that of the corporation, it is nonetheless sufficient if it states that the deed was
executed for the purposes therein expressed and the deed purports to be the act of the corporation.
Ballard v. Carmichael, 18 S.W. 734 (fex.l892); Mullerv. Boone, 63 Tex. 91 (1885).
If an acknowledgment is defective because it was made "in an individual, rather than a
representative or official, capacity" or fails " to show an acknowledgment or jurat that complies
with applicable law," a person with a right of action to recover real property or an interest therein
must bring suit within four years after the recordation of the instrument (or two years after the
day the instrument was "filed for record," effective September 1, 2007); however, this limitations
period does not apply to a forged instrument. Tex. Civ. Prac. & Rem. Code Ann. § 16.033. Act of
June 15, 2007, 80th Leg., R.S., ch. 819, § 2, 2007 Tex. Gen. Laws 1695 (nonretroactivity
provision). In addition, regarding instruments "filed for record" on or after September 1, 2007,
"containing a ministerial defect, omission, or informality in the certificate of acknowledgment
that has been filed for record for longer than two years ... is considered to have been lawfully
recorded and to be notice of the existence of the instrument on and after the date the instrument is
filed ." Tex. Civ. Prac. & Rem . Code Ann. § 16.033(c). Act of June 15, 2007, 80th Leg., R.S., ch.
819, § 2, 2007 Tex. Gen. Laws 1695 (nonretroactivity provision). But see Caution, below.
To prove title, an instrument in the chain oftitle to land may be admitted into evidence as an
" ancient document,'' without further proof of its execution, if it has been in existence for at least
twenty years. (See discussion of the "ancient document" rule in the comment to Standard 13.40.)
This rule of evidence does not require the instrument to have been acknowledged. A former
statute, deemed repealed upon promulgation of the rules of evidence effective September 1, 1983,
provided that an instrument without a proper acknowledgment is admissible if it has been of
record for at least ten years. There is no similar specific provision in the current rules of evidence.
Arguably, the record of an unacknowledged, or improperly acknowledged, instrument which has
been of record for at least twenty years is admissible into evidence under the ancient document
rule, but this is not certain. See generally 3 Aloysius A. Leopold, Land Titles and Title
Examination§§ 8.6, 8.48 (Texas Practice 3d ed. 2005) and 5 Id. § 35.18. Even if admissible into
evidence to prove title, an instrument improperly acknowledged, although of record for at least
twenty years, still cannot be regarded as having been validly recorded so as to impart constructive
notice. Of course, one who has examined the instrument or the record of the instrument would
have actual notice of it. Where no adverse claim appears from the record after twenty years,
marketability would not ordinarily be questioned because the possibility of a successful adverse
claim based on a defective acknowledgment is remote.
Caution:
An examiner should exercise caution in relying on the four-year (two-year, effective
September 1, 2007) statute of limitations discussed in the Comment. Tex. Civ. Prac. & Rem .
Code Ann. § 16.033. Act of June 15, 2007, 80th Leg., R.S., ch. 819, § 2, 2007 Tex. Gen. Laws
1695 (nonretroactivity provision). Except for a "ministerial defect, omission, or informality in the
certificate of acknowledgment that has been ftled for record for longer than two years," Tex. Civ.
Prac. & Rem. Code § 16.033(c) (effective September 1, 2007), this statute does not expressly
validate the recording of an improperly acknowledged instrument. The statute does not explain
what constitutes "a ministerial defect, omission, or informality." Moreover, the period of
limitation will not run against persons under disability. A defectively acknowledged instrument
probably cannot be proven through a certified copy from the public records, at least until it
qualifies as an "ancient document." Tex. R . Evid. 902(4).

17

An instrument executed by a married woman prior to August 22, 1963, but not ''privily and
apart" acknowledged in the manner then prescribed by statute, was void as to her. Tex. Rev. Civ.
Stat. art. 1299 (repealed by Acts 1963, 58th Leg., p. 1189, ch. 473 , § 1); Humble Oil & Refining
Co. v . Downey, 183 S.W.2d 426 (Tex.1944); Sun Oil Co. v. Rhodes, 71 S.W.2d 413
(Tex.Civ.App.-Beaumont 1943, writ ref d). The supreme court declared former Article 1299 to
be unconstitutional in Wessely Energy Co. v. Jennings, 736 S.W.2d 624 (Tex.l987) (affirming a
married woman' s pre-repeal conveyance despite its noncompliance with Article 1299). However,
the ruling was made prospective only. 736 S.W.2d at 629. Thus, examiners should still be alert to
a deed which: pre-dates August 22, 1963, is executed by a married woman, but is not ' ' privily
and apart" acknowledged.
An unacknowledged and unrecorded instrument is void as to creditors and subsequent
purchasers for value without notice. Tex. Prop. Code Ann. § 13.001(a). Further, the recordation
of an instrument does not impart constructive notice unless the instrument has been properly
acknowledged or proved. Hill v. Taylor, 14 S.W . 366 (Tex.l890). Moreover, the
acknowledgment of the grantee only, without that of the grantor, is insufficient. Sweeney v.
Vasquez, 229 S.W .2d 96, 97 (Tex.Civ.App. -San Antonio 1950, writ ref'd). Of course, an
examiner who encounters such an instrument in the course of examining title would gain actual
notice of its contents and such notice would likely be imputed to the examiner's client.
Caution should be exercised in determining that an acknowledgment is in substantial, though
not literal, compliance. The general rule is that omitted words can be supplied by inference if it is
clear wh<~.t they should be. Sheldon v. Farinacci, 535 S.W .2d 938 (Tex.Civ.App.-San Antonio
1976, no writ). However, an acknowledgment was held insufficient where the certificate recited
that the subscribing party, by name, had appeared and " acknowledged that had signed, sealed and
delivered" the instrument, omitting only the personal pronoun. Huff v. Webb, 64 Tex. 284
(1885).
A jurat (as distinguished from an acknowledgment) is required for the perfection of certain
claims (e.g ., a mechanic' s lien). Tex. Prop. Code Ann. § 58.004.
Source:
Citations in the Comment.
Oklahoma Title Examination Standards, Stds. 6.1 , 6.2.
3 Aloysius A. Leopold, Land Titles and Title Examination§§ 8.6, 8.48 (Texas Practice 3d ed.
2005) and 5 Id. § 35.18.
History:
Adopted, June 27, 1997.

Standard 4.30. Delivery; Effective Date; Delay In Recordation
An examiner may presume the delivery of instruments acknowledged and recorded. Delay in
recordation, with or without record evidence of the intervening death of the grantor, does not
rebut the presumption or create an unmarketable title; however, as an added exceptional
protection to the client, an examiner may choose to make an inquiry outside of the record.
Comment:
Delivery is a formality essential to the effectiveness of conveyances, recorded or otherwise.
Dikes v. Miller, 24 Tex. 417 (1859). Delivery may be actual or constructive. An example of
constructive (or conditional) delivery is the typical situation where a deed is delivered to a closing
agent to be subsequently delivered to a buyer upon the satisfaction of all contractual conditions to
closing. Delivery is a question of fact focusing on two elements: (1) was the instrument placed
within the control of the grantee by the grantor, and (2) did the grantor intend that the instrument
operate as a conveyance? Ragland v. Kelner, 221 S.W.2d 357 (Tex.1949); Bell v. Rudd, 191
S.W.2d 841 (Tex.1946); Steffian v. Milmo N ational Bank, 6 S.W . 823 (Tex.1888).

18

-

Unless it provides its own effective date, a deed takes effect from the date of its delivery to
the grantee. Possession of a deed raises the presumption of its due delivery. The date affixed to an
instrument is prima facie evidence of the date of delivery. If there is a conflict in dates and the
evidence only admits of two possibilities, that the instrument was delivered on the date on the
instrument or on the date of the acknowledgment, the appellate courts are divided, numerically
favoring the date on the instrument. Wilson v. Curry, 151 S.W.2d 356, 358 (Tex.Civ.App.-Fort
Worth 1941, writ dism'd). However, parties may by contract make a conveyance effective at any
time, either before or after the date on the instrument, the date of the acknowledgment, or the date
of actual delivety, if different. Cox v. Payne, 174 S.W. 817 (Tex.1915); Rogers v. Gunn, 545
S.W.2d 861 (Tex.Civ.App.-Amarillo 1976, no writ); Hart v. Rogers, 527 S.W.2d 230
(Tex.Civ.App.-Eastland 1975, writ ref'd n.r.e.).
A conveyance to a person who is deceased on the effective day of the conveyance is void for
lack of an existing grantee, and no title passes in that conveyance to the heirs or devisees of such
deceased person. Vineyard v. Heard, 167 S.W. 22 (Tex.Civ.App.-San Antonio 1914), aff'd, 212
S.W. 489 (Tex.1919); Sparks v. Humble Oil & Refming Co., 129 S.W.2d 468 (Tex.Civ.App. Texarkana 1939, writ ref'd). However, a conveyance to a living grantee and the grantee's " heirs
and assigns" or to " the estate of' ' a dead grantee is valid. Haile v. Holtzclaw, 414 S.W.2d 916,
927 (Tex.1967) (holding that a conveyance to the "estate" of a grantee was sufficient because
the "estate" or heirs were capable of being ascertained).
Caution:
Neither a delay in recordation nor a post-mortem recordation presumptively impairs
marketability; however, if the record reflects either the death of the grantee prior to the recording
of the instrument, or a long delay in recording, the examiner should inquire outside the record if
the examiner reasonably believes, based upon the facts, that a claim of non-delivery is probable.
Burris v. McDougald, 832 S.W.2d 707 (Tex. App.-Corpus Christi 1992, no writ); Perkins v.
Damme, 774 S.W.2d 765 (Tex. App.--Corpus Christi 1989, writ denied).
Because recorded instruments raise a prima facie presumption of delivery, an examiner is
usually not concerned with evidentiary questions; however, because this presumption may be
overcome, an examiner may have a duty to inquire further when an examiner knows, or
reasonably should know, of facts or circumstances indicating: (1) that the deed was delivered or
recorded for a different purpose; (2) that fraud, accident or mistake accompanied the delivery or
recording; or, (3) that the grantor had no intention of divesting title. Stephens County Museum,
Inc. v. Swenson, 517 S.W.2d 257, 261-262 (Tex.1974); Thornton v. Rains, 299 S.W.2d 287
(Tex.1957); Vannerberg v. Anderson, 206 S.W.2d 217, 219 (Tex.1947). Moreover, a deed must
be accepted by the grantee. Recordation of a deed is also prima facie evidence of acceptance;
however, this presumption can also be overcome. Martin v. Uvalde Savings & Loan Ass'n, 773
S.W.2d 808 (Tex. App.-San Antonio 1989, no writ).
Source:
Citations in the Comment.
Oklahoma Title Examination Standards, Std. 6.4.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 6.3 (1960).
5 Aloysius A Leopold, Land Titles and Title Examination §§ 36.2, 36.6 (Texas Practice 3d
ed. 2005).
History:
Adopted, June 27, 1997.

(

-

CHAPTERV
LAND DESCRIPTIONS
Note: The Title Examination Board is currently working on revisions to this chapter.

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19

Standard 5.10. When Defective Land Descriptions Do Not Impair Marketability
An examiner may presume that errors, irregularities, deficiencies, and inconsistencies in

land descriptions in the chain of title do not impair marketability unless, after considering all
circumstances of record, (a) a substantial uncertainty exists as to the land involved or (b) the
description falls beneath the minimal requirements of sufficiency and definiteness essential to an
effective conveyance. When examining marginally sufficient or questionable descriptions, the
examiner should consider all relevant factors, including the lapse of time, subsequent
conveyances, the manifest or typographical nature of errors or omissions, and accepted rules of
construction.
Comment:
A sufficient description affords the means of identifying the land. Morrow v. Shotwell, 477
S.W.2d 538, 539 (Tex.l972), appeal after remand, 498 S.W.2d 432 (Tex.Civ.App. -Eastland
1973, writ ref'd n.r.e.); Wilson v. Fisher, 188 S.W.2d 150, 152 (Tex.1945); Chandler v. Kountze,
130 S.W.2d 327,331 (Tex.Civ. App.-Galveston 1939, writ ref' d); 4 Aloysius A. Leopold, Land
Titles and Title Examination §§ 15.1-15.3 (Texas Practice 3d ed. 2005). Considerations of
marketability add only the requirements that the means appear of record and that identification be
beyond a reasonable doubt or question. Smith v. Sorelle, 87 S.W.2d 703, 705 (Tex.1935); Gates
v. Asher, 280 S.W.2d 247 (Tex.1955); Browning v. West, 557 S.W.2d 848, 851 (Tex.Civ.App. Tyler 1977, writ refd n.r.e.). Theoretically, any existing land description is only as good as the
weakest link in the chain of descriptions. Practical considerations, however, fully justify reliance
placed upon corrections or improved land descriptions appearing in later conveyances and upon
the passage of time in which difficulties have not arisen from the less than perfect land
description. Further, all matters of record (e.g., adjoining descriptions, other land owned by the
grantor, and the like) become sources of explanation for the dubious description. Pickett v.
Bishop, 223 S.W.2d 222, 223 (Tex.l949); Abercrombie v. Bright, 271 S.W.2d 734
(Tex.Civ.App.-Eastland 1954, writ ref'd n.r.e.). Ambiguities and problems that are covered by
recognized " constructions," or rules for their resolution, do not create a doubt that impairs
marketability. Likewise, typographical mistakes and similar apparent errors and omissions are
regularly held not to detract from the obvious intent of instruments. Reserve Petroleum Co. v.
Harp, 226 S.W.2d 839, 841 (Tex.l950); Barnard v. Good, 44 Tex. 638 (1876); Rhoden v.
Bergman, 75 S.W.2d 993 (Tex.Civ.App. -Beaumont 1934, writ ref'd); Holman v. Houston Oil
Co., 152 S.W. 885 (Tex.Civ.App.- Galveston 1912, writ dism 'd).
Caution:
An examiner should consider the following:
A defective description of the land intended to be conveyed is one of the most frequent
instances of title failure in this State. In general, it is not what was intended to be conveyed that
governs, but what is described in the instrument involved, so that if such description cannot be
upheld or sustained, the intention is of no benefit in most transactions. In view of this, the
attorney, when examining a land title, must be certain that the descriptions in the instruments
involved in a chain of title sufficiently describe the land so the land can be identified and located
on the ground; and if extrinsic evidence is necessary to be relied upon, that the descriptive words
in the deed, or deeds, furnish a basis or guide for the admission of such extrinsic evidence. 4
Aloysius A. Leopold, Land Titles and Title Examination §§ 15.1-15.3 (Texas Practice 3d ed.
2005).
Source:
Citations in the Comment.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 7.1 (1960).
4 Aloysius A Leopold, Land Titles and Title Examination§§ 15.1-15.3 (Texas Practice 3d
ed. 2005).

20

-

History:
Adopted, June 27, 1997.
CHAPTER VI
CORPORATE CONVEYANCES
Note: The Texas Business Organizations Code took effect January 1, 2006. However, prior
corporation laws remain in effect as to any corporation then existing until (a) the early adoption
ofthe Code by such corporation or (b) January I, 2010, whichever comes first.
Standard 6.10. Corporate Existence
Where a corporation is a named party to an instrument in the chain of title, an examiner may
presume that the corporation was legally in existence at the time the instrument took effect, if the
instrument is executed and acknowledged in the proper form.
Comment:
A corporation may exist in fact without being legally constituted. It is therefore unnecessary,
in examining title, to investigate in detail whether all measures have been taken for valid
incorporation, so long as the record shows the existence of a corporation de facto. Rufford G.
Patton & Carroll G. Patton, Patton on Land Titles § 405 (2d ed. 1957 and Supp. 1997) and Paul
E. Basye, Clearing Land Titles §§ 296- 301 (2d ed. 1970).
Caution:
This standard conforms to the standard practice of Texas title examiners. No Texas cases are
directly on point. However, in Allday v. Drummond, 280 S.W.2d 381 (fex.Civ.App. -Fort
Worth 1955, writ ref'd n.r.e.), the court sustained a conveyance by a foreign corporation at a time
when the corporate grantor's charter had been forfeited by the State of Delaware for nonpayment
of taxes. A primary basis for the court's holding was that the conveyance in question had been of
record more than 10 years .
Source:
Lewis M . Simes & Clarence B. Taylor, Model Title Standards, Std. 12.4 (1960).
4 Aloysius A. Leopold, Land Titles and Title Examination § 22.16 (Texas Practice 3d ed.
2005).
History :
Adopted, June 27, 1997.
Standard 6.20. Corporate Authority Presumed

-

-

In the absence of actual or constructive notice to the contrary, an examiner may presume that
the action of the corporation in acquiring or selling the real property affected by an instrument is
within its power.

Comment:
Any action taken by a corporation that is beyond the power conferred upon it by its articles of
incorporation or by the laws of the state of its incorporation is ultra vires. This may include action
contrary to public policy or to some statute expressly prohibiting such action. This excess or
abuse of power is ordinarily not within the scope of an examiner to determine or question,
without some type of actual or constructive notice.
Source:

21

Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 12.5 (1960).
4 Aloysius A. Leopold, Land Titles and Title Examination § 22.16 (Texas Practice 3d ed.
2005).
History:
Adopted, June 27, 1997.

-

Standard 6.30. Foreign Corporations
Where a corporation organized and doing business under the laws of another state is a named
party to an instrument in the chain of title, an examiner may presume that the corporation was
authorized to do business in this state or authorized to acquire and dispose of the real property
affected by the instrument, if the instrument is executed and acknowledged in the proper form.
Comment:
At one time, both foreign and domestic corporations were prohibited from owning land in
Texas except under certain narrow circumstances. However, those statutory prohibitions were
repealed in 1981. See Historical and Statutory Notes at Misc. Corp. Laws Act, Tex. Rev. Civ.
Stat. Ann. arts. 1302-4.01 to 1302-4.07. Even then a foreign corporation without qualifying to do
business in Texas could own and convey title unless its right to do so was challenged by the state.
Byerly v. Carney, 161 S.W.2d ll05, 1110 (Tex.Civ.App.-Fort Worth 1942, writ refd w.o.m.).
Under present law, the holding of title in Texas land by a foreign corporation may constitute the
doing of business in Texas, but its failure to register will not ''affect the validity of any contract
or act" of the corporation. Tex. Bus. Org. Code Ann.§§ 9.051 , 9.202.
Source:
Citations in the Comment.
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 12.6 (1960).
History:
Adopted, June 27, 1997.

Standard 6.40. Corporate Seal
An examiner may presume that a corporate seal does not have to appear on an instrument,
unless the examiner has actual or constructive notice that the bylaws of the corporation require
the seal to have been placed on the instrument.
Comment:
Subject to any approval required by the Texas Business Organizations Code or by the
governing body of the corporation, a corporation may convey land by a deed, with or without the
seal of the corporation, that is signed by an officer, authorized attorney-in-fact, or other
authorized person.
Source:
Tex. Bus. Org. Code Ann. §§ 9.202, 10.251, 10.253.
History:
Adopted, June 27, 1997.

Standard 6.50. Authority Of Particular Officers
Where a corporation is a named party to an instrument in the chain of title, an examiner may
presume that the persons executing the instrument were the officers they purported to be and that
such officers were authorized to execute the instrument on behalf of the corporation, if the
instrument is executed and acknowledged in the proper form .

22

-

-

Comment:
A conveyance that is signed and acknowledged by an officer, an authorized attorney-in-fact,
or other authorized person of a corporation and recorded is prima facie evidence that the
conveyance was duly authorized under the Texas Business Organizations Code and the governing
documents of the corporation. Tex. Bus. Org. Code Ann. §§ 9.202, 10.253 .
Prior to August 28, 1989, the presumption of corporate authority only extended to
conveyances executed by the president or a vice president. Acts 1955, 54th Leg., p . 239, ch. 64.
Accordingly, instruments that are executed by another officer prior to the amendments should be
accompanied by a showing of the officer's authority. However, if the instrument has been
recorded for more than four years (two years, effective September 1, 2007, prospective only),
such authority may be presumed. Tex. Civ. Prac. & Rem. Code Ann. § 16.033. Act of June 15,
2007, 80th Leg., R.S., ch. 819, § 2, 2007 Tex. Gen. Laws 1695 (nonretroactivity provision).

Caution:
The presumption of corporate authority applies to corporate officers and not to an attorney in
fact. The examiner should look to the power of attorney to determine the authority of the attorney
in fact. For further information on attorneys in fact, see Standards 8.10 and 8.20.
Source:
Paul E. Basye, Clearing Land Titles § 293 (2d ed. 1970).
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 12.3 (1960).
History:
Adopted, June 27, 1997.

Standard 6.60. Name Omitted From Signature
Where a corporation appears as a party in the body of the instrument and the instrument is
otherwise properly executed and acknowledged, an examiner may presume that the signature on
the instrument by a corporate representative is sufficient notwithstanding the omission of the
corporate name over such signature.
Comment:
Although courts have been inclined to declare instruments invalid where the representative
capacity of an officer or agent is not noted by the signature, modern curative statutes and title
standards have taken a more liberal attitude to promote marketability. Paul E. Basye, Clearing
Land Titles § 295 (2d ed. 1970). There are apparently no reported Texas cases construing
porporate deeds to be invalid merely because of the failure of the executing officer to note that the
instrument is being executed in an official capacity. Texas law has always been that a deed
executed by an agent passes whatever title the agent has the authority to convey, whether the
agent signs as agent or as principal. Hough v. Hill, 47 Tex. 148, 153 (1877); Odell v. Kennedy,
64 S.W. 802 (Tex.Civ.App.1901, writ ref'd); Bennett v. Virginia Ranch, Land & Cattle Co. , 21
S.W. 126 (Tex.Civ.App.l892, no writ). See also Pride Exploration, Inc. v. Marshall Exploration,
Inc., 798 F.2d 864, 866-67 (5th Cir.1986).
Source:
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 12.2 (1960).
History:
Adopted, June 27, 1997.

Standard 6.70. Name Variances
Although their exact names are not used and variations exist from instrument to instrument,
an examiner may presume that a corporation is satisfactorily identified if, from the name(s) used

-

23

and other circumstances of record, the identity of the corporation can be inferred with reasonable
certainty. Variances that an examiner may ordinarily ignore include the addition or omission of
the word " the" preceding the name; the use or non-use of the symbol " & " for the word
" and"; the use or non-use of abbreviations for "company," " limited," " corporation" or
''incorporated''; and the inclusion or omission of all or part of a place or a location. An examiner
may exercise a greater degree of liberality with a greater lapse of time and in the absence of
circumstances appearing of record that raise reasonable doubt as to the identity of the corporation.
An examiner may rely on affidavits and recitals of identity to obviate variances too substantial or
too significant to be ignored.
Comment:
Although corporations frequently have closely corresponding names, a purported conveyance
by an interloper seems extremely unlikely. The significance of a variance should be evaluated on
the basis of ascertaining the actual identity of the corporation, and not on the basis of mechanical
perfection. Although Texas courts, in the context of a conveyance, have not addressed the effect
of a variance in a corporate name, several cases in which slight name variances were held
immaterial amply support this standard. Wandelohr v. Rainey, 100 S.W. 1155, 1157 (fex.1907)
(holding that an appeal bond was effective despite the omission of the words ''of Sherman' ' from
the name of a bank); Texas Electric Service Co. v. Commercial Standard Insurance Co., 592
S.W .2d 677, 683-84 (fex.Civ.App.-Fort Worth 1979, writ refd n.r.e.) (holding a suit on a
performance bond could be maintained despite the principal's misnomer in the bond as Everman
Park Development "Corporation" instead of its true name, Everman Park Development " Co.,
Inc."); Houston Land & Loan Co. v. Danley, 131 S.W. 1143 (Tex.Civ.App.l910, no writ)
(holding that a note executed in the name of "Houston Land & Loan Company" could be
enforced against the maker under its true name of "Houston Loan & Land Company"). An entity
doing business in Texas is prohibited from using a name that is the same as, deceptively similar
to, or similar to, a name of another existing filing entity or that is reserved or registered under the
Tex. Bus. Org. Code Ann. §§ 5.053, 5.102, 5.153 , 9.105.
Source:
Lewis M. Simes & Clarence B. Taylor, Model Title Standards, Std. 12.1 (1960).
Oklahoma Title Examination Standards, Std. 12.1.
Paul E. Basye, Clearing Land Titles§ 19 (2d ed. 1970).
History:
Adopted, June 27, 1997.

CHAPTER VII
CONVEYANCES INVOLVING PARTNERSHIPS, JOINT VENTURES, LIMITED
LIABILITY COMPANIES,
AND UNINCORPORATED ASSOCIATIONS
Note: The Texas Business Organizations Code took effect January 1, 2006. However, prior
laws applicable to partnerships, limited partnerships, and limited liability companies remain in
effect as to any such entity then existing until (a) the early adoption of the Code by such entity or
(b) January l, 2010, whichever comes first.

Standard 7.10. Conveyance Of Real Property Held In Partnership Or Joint Venture Name
When title to real property is held in the name of a partnership or joint venture, an examiner
may rely upon a conveyance by a general partner on behalf of the partnership or by a joint

24

-

venturer on behalf of the joint venture if the conveyance appears to be a transfer in the ordinary
course ofbusiness of the partnership or joint venture.

-

Comment:
Each partner is an agent of the partnership for the purpose of its business. The act of a partner
performed for the apparent purpose of carrying on in the ordinary course the partnership business
or business of the kind carried on by the partnership binds the partnership unless: (1) the partner
in fact had no such authority, and (2) the person with whom the partner is dealing had knowledge
of the lack of authority. Tex. Bus. Org. Code Ann. §§ 152.301, 152.302.
The Texas Uniform Partnership Act, effective January 1, 1962, which expired January I ,
1999, applied to all general partnerships formed under its provisions prior to January 1, 1994,
except those that timely elected to adopt the Texas Revised Partnership Act. Tex. Rev.
Partnership Act, Tex. Rev. Civ. Stat. Ann. art 6132b- 11.04. The Texas Revised Partnership Act
applies to all partnerships formed on or after January 1, 1994, to all partnerships formed before
that date and that, before January 1, 1999, elected to adopt the Act, and to all partnerships formed
after December 31, 1998, but before January 1, 2006. The Texas Bus. Org. Code, effective
January 1, 2006, applies to all partnerships formed on or after January 1, 2006, to all partnerships
formed before that date and that elect to adopt the Code, and to all partnerships after December
31,2009. Tex. Bus . Org. Code Ann. § 401.001.
A general partner of a limited partnership has the rights and powers of a partner in a
partnership without limited partners. Tex. Rev. Ltd. Partnership Act, Tex. Rev. Civ. Stat. Ann.
art. 6132a- l , § 4.03(a). Texas Bus. Org. Code Ann. § 153.152 provides that such rights and
powers may be negated by the Code, other limited partnership provisions, or the limited
partnership agreement.
Source:
Citations in the Comment.
4 Aloysius A. Leopold, Land Titles and Title Examination § 22.17 (Texas Practice 3d ed.
2005).
History:
Adopted, June 27, 1997.

Standard 7.20. Authority Of Less Than All Partners Regarding Transactions That Are Not
In The Ordinary Course of Business
If a conveyance of a joint venture or a partnership that is executed by less than all of the joint
venturers or partners appears not to be in the ordinary course of business (such as a sale of the
sole asset of the partnership), an examiner should review a copy of the partnership or joint
venture agreement or other satisfactory evidence to verify the authority of the signing partner(s)
or joint venturer(s) to act on behalf of the partnership or joint venture.

-

Comment:
A partnership is not bound by an act of a partner that is not apparently for the carrying on of
the business of the partnership in the usual way, unless that act has been authorized by the
partners. Tex. Rev. Partnership Act, Tex. Rev. Civ. Stat. Ann. art. 6132b-3 .02 . Tex. Bus. Org.
Code Ann. § 152.302. Unless authorized by the other partners or unless the other partners have
abandoned the business, one or more but less than all the partners have no authority to do any act
that is not apparently for carrying on business in the ordinary course. Tex. Bus. Org. Code Ann. §
152.302. See Comment to Standard 7.10.
A general partner of a limited partnership is subject to the restrictions of a partner in a
partnership without limited partners. Tex. Rev. Ltd. Partnership Act, Tex. Rev. Civ. Stat. Ann.
art. 6l32a- l, § 4.03(a). Tex. Bus. Org. Code Ann.§ 153.152.

25

Source:
Citations in the Comment.
History :
Adopted, June 27, 1997.
Standard 7.30. Prior Conveyance In Chain By Partnership Or Joint Venture
An examiner may assume the authority of an apparent partner or a joint venturer who has
executed a prior conveyance in the chain of title on behalf of the partnership or joint venture.
Comment:
See Comment and Caution to Standard 7.40, below.
Source:
Citations in the Comment.
History:
Adopted, June 27, 1997.
Standard 7.40. Conveyance Of Partnership Property Held In Name Of Partners
If title to the property is in the name of the partners, the named partners must execute the
conveyance.

Comment:
Where title to real property is in the name of one or more of the partners, and without an
indication in the instrument transferring title of the person' s capacity as a partner or of the
existence of the partnership, and without use of partnership property, the property is presumed to
be the partner's property under the provisions of Tex. Rev. Civ. Stat. Ann. art. 6132b-2.05(d)).
Tex. Bus. Org. Code Ann. § 152.102.
See Comment to Standard 7.10.
Caution:
Every partner is an agent of the partnership for the purpose of its business, and the act of
every partner, including the execution in the partnership name of any instrument, for apparently
carrying on in the usual way the business of the partnership of which the partner is a member
binds the partnership, unless the partner so acting has in fact no authority to act for the
partnership in the particular matter, and the person with whom the partner is dealing has
knowledge of the fact that the partner has no such authority.
An act of a partner that is not apparently for the carrying on of the partnership business or
business of the kind carried on by the partnership does not bind the partnership unless authorized
by the other partners. Tex. Rev. Partnership Act, Tex. Rev. Civ. Stat. Ann. art. 6132b-3 .02. Tex.
Bus. Org. Code Ann.§§ 152.301 , 152.302, 153.152. See Comment to Standard 7.10.
Source:
Citations in the Comment.
History :
Adopted, June 27, 1997.

Standard 7.50. Conveyance Of Real Property Held In Name Of Limited Liability Company
If title is held by a limited liability company, an examiner may rely upon a conveyance that is
executed by an officer, agent, manager, or member thereof if the conveyance appears to be
consistent with the limited liability company's usual way of doing business.

26

-

-

-

Comment:
The act of an officer, agent, manager, or member of a limited liability company binds the
company when that person is apparently conducting in the usual way the business of the
company, unless the person lacks authority to act and the purchaser has knowledge of the lack of
authority. Tex. Ltd. Liability Co. Act, Tex. Rev. Civ. Stat. Ann. art 1528n, art. 2 .11 , art. 2.2l.D.
Tex. Bus. Org. Code Ann. §§ 101.253, 101.254.
Effective September 1, 2009, a limited liability company agreement may provide for one or
more designated series of members, managers, membership interests, or assets to have separate
rights, powers, or duties respecting specified property or obligations. Tex. Bus. Org. Code Ann. §
101.601 . The debts, liabilities, obligations, and expenses of a particular series shall be enforceable
against the assets of the series only, and none of the debts, liabilities, obligations, and expenses of
the limited liability company generally or of any other series shall be enforceable against the
assets of a particular series, provided the records, company agreement, and company's certificate
of formation conform to applicable requirements. Tex. Bus. Org. Code Ann. § 101.602. Assets
associated with a series may be held directly or indirectly, including being held in the name of the
series, in the name of the limited liability company, through a nominee, or otherwise. Tex. Bus.
Org. Code Ann. § 101.603. A series has the power and capacity, in the series' own name, to hold
title to assets of the series, including real property and to grant liens and security interests in
assets of the series. Tex. Bus. Org. Code Ann. § 101.605.
Source:
Citations in the Comment.
History:
Adopted, June 27, 1997; amended, October 9, 1999. The original standard provided: " If title
is held by a limited liability company, an examiner may rely upon the conveyance that is
executed by a manager or officer if the conveyance appears to be consistent with the limited
liability company's usual way of doing business."

CHAPTER VIII
POWERS OF ATTORNEY
Standard 8.10. Validity Of Instrument Executed By Attorney In Fact Regarding Durable
Powers Of Attorney Executed Before September 1, 1993, And All Non- Durable Powers Of
Attorney
An examiner should determine that a power of attorney grants sufficient authority to validate
the actions of the agent. Any instrument affecting real estate may be executed by an attorney in
fact, duly appointed and empowered, unless: (1) The power of attorney was not executed in
writing; (2) The principal has died or an order of a court has appointed a guardian of the
principal's person or estate, or both, unless the court order otherwise provides; or (3) The power
of attorney has expired or terminated by its own terms or by operation of law. A power of
attorney and instruments executed by one having apparent agency power may qualify as ' ' ancient
documents.,

-

Comment:
A power of attorney must be in wntmg. Tex. Prop. Code Ann. § 5.021. A properly
acknowledged power of attorney may be recorded. Tex. Prop. Code Ann. § 12.016.
When examining an instrument executed by an attorney in fact on behalf of a record owner,
an examiner (unless otherwise aware) should examine the power of attorney and require an
affidavit from a knowledgeable person stating: (1) that the principal was alive on the date the

27

power was exercised; (2) that the power of attorney has not been revoked; and (3) unless the
power was expressly made durable, that the principal was competent on the date the power was
exercised.
When examining an instrument executed by an attorney in fact on behalf of a record owner,
an examiner should determine that the authority granted by the power of attorney was sufficient
to validate the actions of the attorney in fact. Powers of attorney are generally classified into two
types : special and general. In the first type, the principal executes a "specific" or " special"
power of attorney granting authority to the agent to perform a specific act or acts, such as selling
the principal's residence or executing designated types of business contracts on behalf of the
principal, corporation, or business. In the second type, the principal executes a " general, "
" broad," or " universal " power of attorney granting authority to the agent to exercise " all legal
powers possessed by the principal."
When construing deeds and wills, courts apply broad rules of construction in order to
determine the grantor' s or testator's intent. However, when a court interprets a special power of
attorney, it applies a rule of strict construction:
Powers of attorney, unlike deeds and wills, are to be strictly construed; authority delegated is
limited to the meaning of the terms in which it is expressed And where the authority to perform
specific acts is given, and general words are also employed, such words are limited to the
particular acts authorized.
Frost v. Erath Cattle Co., 17 S.W. 52,54 (Tex.1891). "We also refer to the rule that a power
of attorney authorizing the sale of land is to be strictly construed and that general expressions of
authority in such instruments are treated as referable to the specific acts expressly authorized."
Meador v. Wagner, 70 S.W.2d 794, 801 (Tex.Civ.App. -El Paso 1934, writ dism'd).
The following examples illustrate how Texas courts have applied this rule of strict
construction:
(1) A naked power to sell did not include the right to execute an oil and gas lease. Bean v.
Bean, 79 S.W.2d 652 (Tex.Civ.App.-Texarkana 1935, writ ref d);
(2) The power to sell land does not authorize a conveyance in exchange or partition of
lands. Frost v. Erath Cattle Co. 17 S.W. 52, 54 (Tex.1891), citing Reese v. Medlock,
27 Tex. 120 (1863); and
(3) The power to sell does not include the power to encumber. First National Bank v.
Blades, 93 F.2d 154, 155 (5th Cir.1937), citing Texas Moline Plow Co. v. Klapproth,
209 S.W. 392 (Tex.1919).
When a court interprets a general power of attorney, it applies a more liberal rule of strict
construction. For example, Dockstader v. Brown, 204 S.W.2d 352, 353 (fex.Civ.App.-Fort
Worth 1947, writ ref'd n.r.e.) involved a power of attorney authorizing a party "to do any and
every act, and exercise any and every power that I might, or could do or exercise through any
other person" without reference to any specific acts. The court held that the language quoted
authorized any lawful act since it was not qualified in any manner. The court in Dockstader
referred to Veatch v. Gilmer, 111 S.W. 746 (Tex.Civ.App .-1908), modified and aff'd, Gilmer's
Estate v. Veatch, 117 S.W. 430 (Tex.1909), where a similar power of attorney was upheld. In
Veatch, the Texas Supreme Court essentially determined that such a power is sufficient to support
a conveyance, unless the principal discharges the burden of showing that such power was limited
or qualified, and the party holding a conveyance under same was on notice of such qualification.
Where the authority of an attorney in fact is not documented by any instrument of record, but
the deed purportedly executed pursuant to such authority has been of record for at least twenty
years, the examiner is aided by a presumption of the recited authority under the "ancient
document" rule. See discussion in Comment to Standard 13.40.
An examiner should also bear in mind the curative effect of the ten-year limitation statute for
adverse possession. Tex. Civ. Prac. & Rem. Code Ann. § 16.026. However, as stated in the
Caution to Standard 2.10 above, a title based on limitation title may not be marketable.

28

Historically, many recorded instruments that were entitled "Power of Attorney" were really
powers coupled with an interest. A power coupled with an interest confers agency power together
with a present or future interest in the property covered by the agency, but not merely a right to
proceeds accruing from the exercise of the agency power. Wall v. Ayrshire Corp., 352 S.W.2d
496 (Tex.Civ.App. -Houston 1961, no writ). A power coupled with an interest is considered a
conveyance and cannot be revoked by the principal/grantor. Superior Oil Co. v. Stanolind Oil &
Gas Co., 230 S.W.2d 346, 353 (Tex.Civ.App.- Eastland 1950), aff'd, 240 S.W.2d 281
(Tex.l951).
The first statutory authority for durable powers of attorney was effective January 1, 1972.
Acts 1971, 62nd Leg. , p. 971, ch. 173, § 3 (codified as Tex. Prob. Code Ann.§ 36A). This statute
was amended, effective August 1, 1989, to require that durable powers of attorney be written,
executed by an adult principal, witnessed and signed by two adults, and (except for a power of
attorney executed for medical care) recorded in the county where the principal resides. Acts 1989,
7lst Leg., ch. 404, § 1. This statute was replaced by the "Durable Power of Attorney Act,"
effective September 1, 1993. Tex. Prob. Code Ann.§§ 481- 506.
If a guardian of an estate of a ward is appointed, a durable power of attorney is no longer
effective. Tex. Prob. Code Ann. § 485 .
Source:
Oklahoma Title Examination Standards, Std. 6.7.
4 Aloysius A. Leopold, Land Titles and Title Examination§§ 22.19-22.23 (Texas Practice 3d
ed. 2005).
History:
Adopted, June 27, 1997.

29

Standard 8.20. Validity Of Instrument Executed By Attorney In Fact Regarding Durable
Powers Of Attorney Executed After September 1, 1993
An examiner should determine that a power of attorney grants sufficient authority to validate the
actions of the agent. Any instrument affecting real estate may be executed by an attorney in fact,
duly appointed and empowered, unless the attorney in fact or the third party dealing with the
attorney in fact had actual notice that:
(1) The power of attorney was not executed, acknowledged, and recorded as required by
law;
(2) A revocation of the power of attorney has been recorded in the same office in which
the instrument containing the power of attorney was recorded;
(3) The principal has died or an order of a court has appointed a guardian of the
principal's estate, unless the court order otherwise provides;
(4) The principal was not disabled or incapacitated, as defined by the power; or
(5) The power of attorney has expired or terminated by its own terms or by operation of
law.
Comment:
The " Durable Power of Attorney Act," effective September 1, 1993, Tex. Prob. Code Ann.
§§ 481- 506, covers only durable powers of attorney and changes the prior law, addressed in
Standard 8.10, above, as follows:
(1) If a durable power of attorney is used in connection with a real property transaction,
the power must be recorded in the office of the county clerk of the county in which
the real property is located. Tex. Prob. Code Ann. § 489.
(2) Instead of obtaining an affidavit confirming that the authority of the attorney in fact
had not terminated at the time of performance, the Act contemplates that the attorney
in fact will execute an affidavit, contemporaneous with the transaction, confmning
that the attorney in fact has no actual knowledge of any terminating event and an
affidavit that the principal is disabled or incapacitated, as defmed by the power. This
affidavit, which should be recorded along with the instrument of conveyance, is
conclusive proof that the agent had authority at that time. Id. § 487.
(3) Unless otherwise provided in the durable power of attorney itself, a revocation of a
durable power of attorney is not effective as to a third party relying on the power of
attorney until the third party receives actual notice of the revocation. Id. § 488.
(4) The statute creates a statutory durable power of attorney form enabling a principal to
delegate broad authority in a form that is only one or two pages long. Id. § 490. This
is possible because the statute itself contains the many details normally found in a
lengthy detailed form; however, the statutory form may be altered to limit the
authority of the holder.

30

If a guardian of an estate of a ward is appointed, a durable power of attorney is no longer
effective. Tex. Prob. Code Ann. § 485.
Caution:
Apparently, constructive notice of the revocation of a durable power of attorney, as by virtue
of its recordation, would not defeat the conclusiveness of the authority of the attorney in fact. It is
recommended, however, that caution be observed in relying on a durable power of attorney where
a revocation actually has been executed and filed for record before the deed of the attorney in
fact. As originally enacted in 1993, Tex. Prob. Code Ann. § 492, entitled "Construction of
Power Relating to Real Property Transactions," did not include the authority to execute
conveyances of oil, gas, and other minerals. Thus, the holding in Bean v. Bean (discussed in the
Comment to Standard 8.10) may apply to powers created through August 31, 1997. Effective
September 1, 1997, the Act was amended to specifically authorize the holder of a power to
execute oil, gas and mineral leases . Tex. Prob. Code Ann. § 492 .
As to a spousal durable power of attorney executed on or after September 1, 1997, the powers
granted to the former spouse terminate on divorce or annulment of the marriage unless otherwise
provided in the power of attorney. Tex. Prob. Code Ann. § 485A.
Source:
Citations in the Comment.
History:
Adopted, June 27, 1997.

CHAPTER IX
CONVEYANCES INVOLVING TRUSTEES
Standard 9.10. Powers Of Trustee

-

-

Unless a trustee's power is restricted by the trust instrument or by law, the trustee of an
express trust has the power to convey, lease, and encumber the real property interest that is
subject to the trust.
Comment:
Prior to April 19, 1943, the effective date of the Texas Trust Act, a trustee had only those
powers granted by or reasonably implied from the trust instrument. That Act conferred upon the
trustee broad powers unless negated by the trustor.
Under the current Texas Trust Code, a trustee of an express trust has the powers conferred by
the Code-including the power to convey trust property and any additional powers that are
necessary or appropriate to carry out the purposes of the trust- unless limited by the trust
instrument, a subsequent court order, or another provision of the Code that conflicts with or limits
the power. Tex. Prop. Code Ann. § 113.002; Beaty v. Bales, 677 S.W.2d 750 (Tex. App.- San
Antonio, 1984, writ refd n.r.e.); and In re Church and Institutional Facilities Development
Corporation, Seals v. First National Bank of Amarillo, 122 B.R. 958 (Bankr. N. D. Tex. 1991).
Although subject to certain limitations, the terms of an express trust prevail over any provision of
the Code. Tex. Prop. Code Ann. §111.0035(b). Thus, an examiner should examine both the trust
instrument and the Code to confirm that the trustee had the authority to perform the act under
consideration. However, in lieu of examining the trust instrument, the examiner may examine
some other appropriate evidence to determine the powers of the trustee, e.g., a statute now
permits "a person who deals with a trustee in good faith and for fair value actually received by the
trust" to rely upon a "certification of trust" as specified in Tex. Prop. Code Ann. § 114.086.
Where the authority of a trustee is not documented by any instrument of record, but the deed
by the trustee has been of record for at least twenty years, the examiner is aided by a presumption
of the grantor's recited authority under the "ancient document" rule. See discussion in Comment

31

to Standard 13.40. An examiner may also be aided by the statutory requirement that an action to
recover property conveyed by an instrument signed by a trustee without record of the authority of
the trustee or proof of the facts recited in the instrument must be brought within four years of the
date that the instrument was "recorded," if it was recorded before September 1, 2007, or within
two years of the date that the instrument was "filed for record," if it was filed on or after
Se~tember l, 2007. Tex. Civ. Prac. & Rem. Code Ann. § 16.033(a)(7). Act of June 15, 2007,
80 Leg., R.S., ch. 819, § 2, 2007 Tex. Gen. Laws 1695 (nonretroactivity provision).
If the purpose of an examination concerns dealing with the trustee over an extended period of
time (e.g., paying the trust proceeds from oil and gas production), then the examiner should also
review the trust instrument to : (I) identify successor trustees; (2) determine what facts may cause
the trust to terminate; and (3) identify the beneficiaries of the trust property at the time of trust
termination.

Caution:
An examiner must evaluate the trust instrument or certification of trust to determine the
identity of the trustee, the powers of the trustee, and whether the trust was in effect at the time of
the trust transaction. Depending upon the purpose of the examination, the examiner may need to
determine the beneficiaries of the trust and other matters.
Any reference in any instrument in the chain of title to the existence of a trust instrument
creates in the subsequent purchaser a duty to consider the above matters. Westland Oil Dev. Corp.
v. Gulf Oil Corp., 637 S.W.2d 903, 908 (Tex. 1982).
Co-trustees: Generally, unless the trust instrument specifies otherwise and subject to statutory·
exceptions, co-trustees may act by majority decision. Tex. Prop . Code Ann. § 113.085.
Homestead Property: Effective September 1, 2009, statutory law authorizes the preservation
of homestead rights upon a qualifying conveyance of homestead property into a trust. Tex. Prop.
Code. Ann. § 41.0021. In addition, "[a] trustee may sell, convey, or encumber [homestead]
property ... without the joinder of either spouse unless expressly prohibited by the instrument or
court order creating the trust. " Tex. Prop. Code Ann. § 41.002l(d). However, the more cautious
approach would require joinder of the occupying spouses in the transfer or encumbrance.

Source:
Citations in the Comment.
Oklahoma Title Examination Standards, Std 15 .1.
3A Aloysius A. Leopold, Land Titles and Title Examination § 12.36 (Texas Practice 3d ed.
2005). .
History: Adopted, June 27, 1997, .amended June 27, 2008 . The original standard provided:
"Unless a trustee's power is restricted by the trust instrument or by law, the trustee of an express
trust has the power to convey, lease, and encumber the real property interest that is subject to the
trust. A trustee's act binds the trust and all beneficiaries as against successors who are without
actual or constructive notice of restrictions or limitations upon the trustee's powers."

Standard 9.20. Title As .. Trustee" Without Further Identification Of Trust
If property is conveyed to a person identified as "trustee," but the conveyance does not
identify the trust or disclose the names of the beneficiaries, an examiner may presume the
authority of the trustee to convey, transfer or encumber the title to the property.

32

-

-

Comment:
The mere designation of a party as "Trustee," "as Trustee," or "Agent" following the
name of a grantee, without additional language actually identifying a trust, does not in itself
create a trust and it does not give notice or put an examiner upon inquiry that a trust does exist or
that any person other than the present grantee has a beneficial interest. Barker v. Temple Lumber
Co., 12 S.W .2d 175 (fex. Comm 'n App.l929, judgm' t aff'd), rev' d on rehearing on other
grounds, 120 Tex. 244, 37 S.W.2d 721 (1931), 137 A.L.R. 460, 462- 65 (1942); Nolana Dev.
Ass'n. v. Corsi, 682 S.W.2d 246,249 (Tex.l984). This " blind trustee" concept was first enacted
into statutory form as a conveyancing statute. Acts 1925, 39th Leg., ch. 120, p. 305, § 1. This
statute was used for many years to avoid filing trust instruments of record and to escape the
formality of creating a trust where title was held by a " nominee." For example, when a
conveyance is made to " Jack Smith, Trustee" and the creating instrument does not identify a
trust or the name of any beneficiary, the trustee may " convey, transfer, or encumber the title of
the property without subsequent question by a person who claims to be a beneficiary under a trust
or who claims by, through, or under any undisclosed beneficiary or by, through, or under the
person designated as trustee in that person's individual capacity. " Tex. Prop. Code Ann. §
101.001. Moreover, in this situation, "the trust property is not liable to satisfy the personal
obligations of the trustee." Tex. Prop. Code Ann. § 101.002.
See .also Tex. Prop. Code Ann. § 114.082 and Gulf Production Co. v. Continental Oil Co.,
164 S.W.2d 488 (fex.1942).
If there is no subsequent conveyance out of the "blind trust" and no other evidence that a
trust exists, record title to the property interest in question is deemed to be in the named trustee or
the trustee's successors. Jordan v . Exxon Corp., 802 S.W .2d 880 (Tex. App.-Texarkana 1991,
no writ).
Caution:
If a conveyance to a person designated as a trustee identifies the trust or discloses the name of
the beneficiary, then an examiner should follow the guidance of Standard 9.10 and its Comment
and Caution.
A governmental entity (defmed as a state agency or political subdivision) may not purchase
property held in trust until the governmental entity receives from the trustee a copy of the trust
agreement identifying the true owner of the property. Likewise, a governmental entity may not
sell property to a trustee until the governmental entity receives from the trustee a copy of the trust
agreement identifying the person who will be the true owner of the property. In either case, the
trustee must identify the true owner of the property to the governmental entity. Texas Gov' t Code
Ann. § 2252.092. If a governmental entity fails to comply with this provision, the conveyance is
void. Id. § 2252.093 .
Source:
Citations in the Comment.
Tex. Prop. Code Ann. §§ 101.001, 101.002, 114.082, 114.0821.
5 Aloysius A. Leopold, Land Titles and Title Examination § 32.10 (Texas Practice 3d ed.
2005).
History:
Adopted, June 27, 1997.

CHAPTER X
CAPACITY TO CONVEY
Standard 10.10. Minority

33

In the absence of actual or constructive notice to the contrary, a grantor is presumed to be an
adult. If it appears that a person acquired title as a minor, an examiner must first determine that a
conveyance from that person occurred after:
(1) the person obtained the age of majority as defined at the time of the conveyance;
(2) the person had the disability of minority removed by a court of competent
jurisdiction; or
(3) the person was legally married.
A conveyance that has not been disaffirmed within a reasonable time after the minor attains the
age of majority is valid.
Comment:
Texas law presumes that any party to a legal contract has sufficient capacity. Thus, deeds
executed by minors are voidable, not void, and convey title until set aside. Neill v . Pure Oil Co.,
101 S.W.2d 402 (Tex.Civ.App.-Dallas 1937, writ refd). In order to avoid a conveyance that a
minor executed while the minor was under the disability of minority, the minor must disaffirm the
conveyance within a reasonable time after attaining the age of majority or after removal of
disability or after marriage. Searcy v. Hunter, 17 S.W. 372, 373 (Tex.189l).
A minor who has been legally married or whose disabilities have been removed by a court
has the capacity and power of an adult. Texas Fam . Code Ann. §§ 1.104, 31.006.
Caution:
The question of reasonable time is one of fact, not of law. There is no certain period for the
minor to disaffirm, but what is a ' ' reasonable time" is determined by all facts and circumstances.
Miller v. McAden, 253 S.W . 901 (Tex.Civ.App.-Austin 1923, no writ). Examples of attempts to
disaffirm that were found not to have occurred within a reasonable time are as follows:
(1) Disaffumance about one year after reaching majority. Askey v. Williams, 11 S.W .
1101, 1102 (Tex.1889).
(2) Waiting two years after reaching majority. Ferguson v . Houston, E. & W. T. Ry. Co.,
11 S.W. 347, 348 (Tex.1889).
(3) Minor accepted proceeds of sale and waited nearly three years to disaffirm.
Daimwood v. Driscoll, 151 S.W . 621, 623 (Tex.Civ.App.-San Antonio 1912, writ
ref d).
Any positive act of the minor after the minor reaches majority should satisfy an examiner. As
long as the minor continues to take a position that the minor intends to stand by the conveyance,
it will be considered as a ratification of the executed deed.
If a legally married minor is divorced or if the marriage is annulled, the minor most likely
retains capacity pursuant to Texas Fam. Code Ann. § 1.104. See generally John J. Sampson,
Harry L. Tindall, et al., Sampson & Tindall' s Texas Family Code Annotated, Comment to §
6.306 (2001). The capacity of the minor is uncertain in the hypothetical circumstance where the
marriage of a minor is declared void in a suit to declare the marriage void by reason of a prior
existing marriage or incest. See Texas Fam. Code Ann. §§ 6 .201-6.203. In these instances,
because the marriage is void, the minor may have never obtained capacity by such marriage in the
first place; however, the issue of such minor' s capacity may turn on whether the minor knew that
the marriage was incestuous or bigamous.
Source:
Citations in the Comment.
5 Aloysius A. Leopold, Land Titles and Title Examination § 32.22 (Texas Practice 3d ed.
2005).
Oklahoma Title Examination Standards, Std. 4.1.
History:
Adopted, June 27, 1997.

34

-

Standard 10.20. Mental Capacity

In the absence of actual or constructive notice to the contrary, an examiner may presume that
a grantor has the mental capacity to convey. If the lack of capacity has been established,
restoration of capacity may be accomplished pursuant to statute.
Comment:
Texas law presumes that the grantor of the deed has sufficient mental capacity at the time of
execution to understand the grantor's legal rights. The party alleging incapacity has the burden of
proof. Bradshaw v. Naumann, 528 S.W.2d 869, 873 (Tex.Civ.App. -Austin 1975, writ dism 'd).
The Texas Supreme Court has held that an insane person's deed is voidable and not void,
evidently reaching this conclusion based upon the similarity between the deed of an insane person
and that of a minor. Williams v. Sapieha, 61 S.W . ll5, 116 (Tex.l901).
Upon the adjudication of incompetency of a spouse, the other spouse acquires full power to
dispose of the community property. Tex. Prob. Code Ann. § 883. However, if a lack of mental
capacity of a spouse has been previously established, a court, upon determining that the mental
capacity of such spouse has been restored, may enter an order terminating the other spouse's full
power to dispose of the community property. Tex. Prob. Code Ann. § 883A.

Caution:
If capacity is challenged, the legal standards in Texas for determining the existence of mental
capacity for purposes of executing a will or a deed are substantially the same as mental capacity
for executing a contract. To have the requisite mental capacity, the testator or grantor must
appreciate the effect of what is happening and understand the nature and consequences of the act
and of the business being transacted. Bach v . Hudson, 596 S.W .2d 673 , 675- 76 (Tex.Civ.App.Corpus Christi 1980, no writ).
Source:
Citations in the Comment.
Oklahoma Title Examination Standards, Std. 4.2.
5 Aloysius A. Leopold, Land Titles and Title Examination §§ 32.15 (Texas Practice 3d ed.
2005).
History:
Adopted, June 27, 1997.

-

Standard 10.30. Guardians

In reviewing a sale or encumbrance of property by a guardian, an examiner must determine
that all statutory requirements have been met.
Comment:
In considering a guardian' s sale of property, including leases and mineral leases, or mortgage
or other encumbrance of property, the examiner must first review the documents involved in the
appointment of the guardian. Among these are :
(1) the application for appointment,
(2) the citation and return,
(3) the order appointing the guardian, and
(4) the guardian 's oath and bond.

-

35

The examiner must also determine that the guardian's appointment was in effect at the
time of the sale or lease. Unless otherwise discharged, a guardian remains in office until the estate
is closed. Tex. Prob. Code Ann. §§ 694, 745.
A guardianship terminates in any of the following circumstances:
(1) when the ward dies;
(2) when a minor ward marries, reaches majority (age 18), or has disabilities removed;
(3) when a court issues an order of restoration in the case of an incapacitated ward; or
(4) when a court revokes the guardianship.
Specific requirements relating to sales are found in Tex. Prob. Code Ann. § 811 et seq. In
general, a guardian' s sale requires:
(1) an application by a duly appointed and acting guardian for authority to sell,
(2) a citation and return,
(3) an order of sale,
(4) notice as required by the court in the order of sale,
(5) a sale by the guardian, as evidenced by a report of sale,
(6) an additional guardian's bond if the general bond is inadequate,
(7) a decree confirming the sale, and
(8) a conveyance by the guardian.
The examiner should review each of the above documents. If two years have elapsed from the
date of the decree confirming the sale, an examiner may rely on the decree as evidence that the
requirements of the order of sale were met unless, on its face, the decree indicates that the sale
was not conducted in the manner required. See Tex. Prob . Code Ann. § 31. If the two-year period
has not elapsed, evidence of compliance with the requirements of the order of sale is necessary.
For provisions relating to mineral leases, see Tex. Prob. Code Ann. §§ 847-852. For
provisions relating to mortgages, see Tex. Prob. Code Ann. § 781 . For provisions relating to gifts,
see Tex. Prob. Code Ann. §§ 865-866.
A guardian may be appointed as the guardian of the person of the ward or as guardian of the
estate of the ward or both. In general, only the guardian of the estate of the ward may sell or lease
the property of the ward. Subject to statutory limitations on net value of the minor's interest, a
minor's property may be sold by .a parent or the managing conservator without the appointment
of a guardian. Tex. Prob . Code Ann. § 889. Similarly, subject to statutory limitations on the net
value of the ward's interest, the property of a ward, not just that of a minor, may be sold by the
guardian of the person of the ward without appointment as guardian of the estate of the ward.
Tex. Prob. Code Ann. § 890. Both statutes require that these sales be approved by a court.
For related standards, see Standard 10.10, Minority, and Standard 10.20, Mental Capacity.
The holder of a durable power of attorney may have authority to convey the property of an
incapacitated person. See Chapter VIII, Powers of Attorney. However, if a guardian of the estate
of the ward has been appointed, the durable power of attorney is no longer effective. Tex. Prob.
Code Ann. § 485.
Caution:
A decree conf"rrming a sale may not be issued until five days after the date the report of sale is
filed. Tex. Prob. Code Ann. § 834.
The appointment of a guardian in another jurisdiction does not give the guardian any
authority over a ward's estate in Texas. American Surety Co. v. Fitzgerald, 36 S.W.2d 1104 (Tex.
Civ. App. -Dallas 1931, writ refd). A foreign guardian may be appointed by a Texas court,
without notice or citation, in the manner prescribed by Tex. Prob. Code Ann. § 881 .
The statutes governing guardianships were extensively modified effective September 1, 1993.
Thus, when reviewing more recent sales by guardians, examiners should be cautious in relying
upon court decisions based upon the law that existed prior to that date. Like the current statutes,
prior law required that the guardian be duly appointed and acting and required court orders

36

-

authorizing and approving the sale. An examiner encountering a guardian's sale made under
earlier statutes must verify compliance with those statutes.
Source:
Citations in the comment.
History:
Adopted, June 22, 2007.

CHAPTER XI
DECEDENTS' ESTATES
Standard 11.10. Passage Of Title Upon Death
A decedent' s property passes to his or her heirs at law or devisees immediately upon death,
subject in each instance, except for exempt property, to payment of debts, including estate and
inheritance taxes.
Comment:
Notwithstanding the passage of title at death, if letters testamentary or letters of
administration are issued, the personal representative of the estate has the right to possession and
control of the estate assets for purposes of estate administration.
With respect to the property of an intestate person, Tex. Prob. Code Ann. § 45 states the
manner in which community property passes, and Tex. Prob. Code Ann. § 38 governs the passage
of separate property. A will is not valid to pass title until it has been probated. Tex. Prob. Code
Ann. § 94.
Source:
Citations in the Comment.
Tex. Prob. Code Ann. § 37.
Stanley M. Johanson, Johanson' s Texas Probate Code Annotated § 37 (1998).
History:
Adopted, October 9, 1999.

Standard 11.20. Estate Proceedings
If an owner of property dies, the examiner must determine whether the owner left a will,
whether there is a probate proceeding or administration pending, and whether a personal
representative is acting. If the records of the county where the land is located do not indicate that
a will has been filed for probate, and in the absence of information to the contrary, the affidavit of
a person who has knowledge of the facts is usually accepted as satisfactory evidence that the
owner died intestate.
Comment:
Self-explanatory.
Source:
Title Standards Joint Editorial Board.
History:
Adopted, October 9, 1999.

Standard 11.30. Conveyances By An Executor
Before accepting an executor's deed, an examiner must be satisfied that all statutory
requirements were met in the appointment of the executor and that the executor is qualified to act.

37

A qualified executor, even one under court order, may convey property belonging to the estate if
authorized to do so by the will. In addition, a qualified independent executor, even though not
authorized by will, may convey if not prohibited by the will and if there are one or more unpaid
debts of the estate that are not barred by limitations. In the absence of information to the contrary,
the examiner may rely upon an affidavit of an executor or other person who has knowledge of the
facts that there are existing debts of the estate.
Comment:
Determining the qualification of an executor requires, as a minimum, an examination of the
will, the application for probate, the order probating the will and appointing the executor, the
executor's bond (if required), and recent letters testamentary. If the will was probated in another
county, the examiner should require the filing of certified copies of the probate documents in the
county where the land is located.
An independent executor, who qualifies under Tex. Prob. Code Ann. § 145 and who takes the
necessary oath, is permitted to act free of probate court supervision and is empowered to perform
any act relating to the settlement of the estate that an executor or administrator acting under court
order could do. As a probate court may order a sale of real property "when it is deemed to the
best interest of the estate,' ' Tex. Prob. Code Ann. § 341, presumably an independent executor can
sell, even in the absence of debts, when in his or her judgment the sale is in the best interest of the
estate. Unless a sale is authorized by will, however, a purchaser from an independent executor has
the burden to prove the existence of debts or other condition that would authorize a probate court
to order the sale. Haring V. Shelton, 122 S.W. 13 (Tex.1909).
The powers of an independent executor continue until there is no longer any necessity for the
executor to act, typically when all debts of the estate have been paid and the assets of the estate
have been distributed. Although Tex. Prob. Code Ann. § 151 provides a method of closing an
independent administration, that procedure is rarely followed. This practice presents problems for
the examiner, because there frequently is no convenient way to determine conclusively that an
executor no longer has authority to act. In case of doubt as to whether the executor continues to
act, the devisees should join the executor in any conveyance of estate property.
An examiner may rely upon a will that has been duly admitted to probate and that has not
been challenged. However, during the two-year period after the date of the order admitting the
will to probate, the order is subject to contest by bill of review filed in the proper court by any
interested person. Tex. Prob. Code Ann. § 31. Moreover, any interested person may institute suit
to cancel a will for forgery or other fraud within two years after the discovery of the forgery or
fraud, and persons non compos mentis and minors have two years after the removal of their
disabilities within which to commence such a suit. Tex. Prob. Code Ann. § 93 .
A sale of estate property by an executor to an innocent purchaser, for a valuable
consideration, in good faith, and without notice of any illegality in the sale continues to be valid
notwithstanding that the acts or the authority under which the acts were performed is later set
aside. Tex. Prob. Code Ann. § 188 . Under some circumstances, a court may appoint an
independent administrator of the estate of an intestate decedent or of a testate decedent whose
will did not create an independent administration. Tex. Prob. Code Ann. § 145. An independent
administrator has the same authority as an independent executor named in a will.
Source:
Citations in the Comment.
Tex. Prob. Code Ann. §§ 145,332, 341.
Roy v. Whitaker, 48 S.W . 892 (Tex.1898).
Stanley M. Johanson, Johanson' s Texas Probate Code Annotated§ 145 (1998).
17 M. K. Woodward & Ernest E. Smith, III, Probate and Decedents' Estates §§ 497, 499
(Texas Practice 1971).
History:

38

Adopted, October 9, 1999.
Standard 11.40. Conveyances By An Administrator
An administrator may convey property of a decedent only with authority of the court.
Therefore, before accepting an administrator's conveyance, an examiner must determine that all
statutory requirements have been met in the appointment of the administrator and that the
administrator is qualified to act and is authorized to make the sale.

Comment:
Determining the qualification of an administrator requires an examination of the application
for appointment, the order appointing the administrator, recent letters of administration, and the
administrator's bond. A sale of estate property requires, in addition, an application for sale, order
of sale, additional bond (if required by the court), report of sale, and order approving sale.
Unless it is clear to the examiner that an administrator has the authority to convey, all heirs of
the decedent must join the administrator in any conveyance. An examiner may rely upon a
decision, order, or judgment rendered in a probate proceeding after two years have elapsed from
the date of the decision, order, or judgment. During the two-year period, however, the decision,
order, or judgment is subject to attack by any interested person by bill of review filed in the same
court, and if error is shown, the decision, order, or judgment can be revised or corrected. Tex.
Prob. Code Ann. § 31. A sale of estate property by an administrator to an innocent purchaser, for
a valuable consideration, in good faith, and without notice of any illegality in the sale continues to
be valid notwithstanding that the acts or the authority under which the acts were performed is
later set aside. Tex. Prob. Code Ann. § 188. The recitals in a deed by a personal representative
made pursuant to a court order are prima facie evidence that the sale met all applicable
requirements of the law. Tex. Prob. Code Ann. § 356.
Source:
Citations in the Comment.
Tex. Prob. Code Ann. § 331.
History:
Adopted, October 9, 1999.
Standard 11.50. Conveyances By Heirs Of An Estate
If the property owner died intestate, or if the owner died testate but the will is not probated,
the examiner must, in the absence of administration, identify the heirs of the decedent, along with
the devisees in any unprobated will, and require that all of them join in a conveyance of the
property of the decedent.

-

Comment:
Beneficiaries of a will frequently agree not to probate the will, in some instances because the
estate is small and does not justify the cost. A commonly accepted procedure is to attach a copy
of the will, if available, to an affidavit of heirship and to file the documents in the county records.
In those cases, the examiner should require the joinder in the conveyance of each party who
would take by intestacy and each party who would take under the will. If the will was not
attached to the affidavit, but is available, the examiner should obtain a copy of the will in order to
confirm the identity of the devisees under the will.
With respect to the property of an intestate person, Tex. Prob. Code Ann. § 45 states the
manner in which community property passes, and Tex. Prob. Code Ann. § 38 governs the passage
of separate property. For estates of decedents dying intestate after September 1, 1993, Tex. Prob.
Code Ann. § 45 provides that title to community property passes to the surviving spouse if all the

39

decedent's descendants are also the surviving spouse' s descendants. If a husband or wife dies
intestate and the community property passes to the surviving spouse, no administration on the
community property is necessary. Tex. Prob. Code Ann. § 155.
A purchaser who buys real property from an heir, for value, in good faith, and without
knowledge of a will, more than four years after the death of the decedent is protected from the
claims of any devisees if a will is later offered for probate. Tex. Prob. Code Ann. § 73.
Source:
Citations in the Comment.
Stanley M. Johanson, Johanson' s Texas Probate Code Annotated§§ 45 , 155 (1998).
History:
Adopted, October 9, 1999.
Standard 11.60. Liens For Debts And Taxes
Property of a decedent passes subject to unpaid debts and taxes of the estate. Therefore, the
examiner must determine whether these are unpaid. In the absence of information to the contrary,
an examiner may rely upon the affidavit of an executor, administrator, or other person who has
knowledge of the facts that all debts of the estate have been paid. As evidence that an estate is not
large enough to incur federal estate and Texas inheritance taxes, an examiner may rely upon a
court-approved inventory, or in the absence of an inventory, the affidavit of a person who has
knowledge of the facts. An order of the court probating a will as a muniment of title may be
accepted as evidence that all obligations of the estate have been paid other than debts secured by
liens on real property. In the latter case, the examiner must determine that the liens do not affect
the property under examination.
An examiner may accept, as proof that debts and taxes have been paid, an order closing a
court supervised administration or an affidavit closing an independent administration. If federal
estate and Texas inheritance taxes are due, satisfaction of the taxes may be proven by a Federal
Estate and Generation- Skipping Transfer Tax Closing Letter together with proof of payment of
the taxes shown by the letter to be due to the United States and to the State of Texas.
Comment:
Tex. Prob. Code Ann. § 37 creates a statutory lien on the decedent's estate in favor of the
decedent's creditors. Blinn v. McDonald, 46 S.W. 787 (Tex.1898). The statutory lien is not a lien
in the usual sense and is not upon specific property but is a general lien upon all property that is
subject to payment of debts. Moore v. Moore, 32 S.W . 217 (Tex.l895). Because a personal
representative can sell property to pay debts, it follows that property sold by a personal
representative in an authorized sale passes free of the statutory lien.
Debts for which an estate is obligated, and which are secured by the statutory lien, include
court ordered child support payments that were delinquent at the date of death. Delinquent
payments may also be secured by a Child Support Lien as provided in Tex. Faro. Code Ann. §§
157.311- 157.326. As liens of the latter type must be recorded in the county judgment records,
they will be apparent from a customary search for abstracts of judgment.
While an inventory, appraisement, and list of claims may contain information that is useful
with respect to the size and composition of the estate, the examiner should be aware that the
information may be erroneous or incomplete. For example, the personal representative must list
only property that is considered part of the probate estate with the result that there may be
additional property that is part of the estate for estate tax purposes but which is not listed.
Moreover, debts of the estate are not required to be listed on the inventory. A United States Estate
(and Generation-Skipping Transfer) Tax Return (Form 706), if available, is a more reliable
source of information of the character and extent of a decedent's property.

40

As a practical matter, the State of Texas imposes no death or inheritance taxes on the estates
of persons who die after December 31, 2004, because an inheritance tax is imposed only to the
extent that a state tax credit is allowed in connection with the settlement of federal estate taxes.
Tex. Tax Code Ann. § 211.055 . With respect to the estate of a decedent dying after December 31,
2004, the federal credit for State death taxes is no longer allowed, 26 U.S.C. § 2011 , and no tax is
due the State ofT ex as. To claim an inheritance tax lien, the State must file the notice required by
Tex. Tax Code Ann. § 113.002. A lien for federal estate taxes attaches to the gross estate of a
decedent as of the date of death and, in general, exists for a period often years. 26 U .S.C. § 6324.
There is no requirement for filing notice in the county records.
Federal estate taxes are due or may be due regarding taxable estates exceeding certain
amounts. For decedents dying in:

1987 to 1997 $600,000
1998 625,000
1999 650,000
2000 and 2001 675,000
2002 and 2003 1,000,000
2004 and 2005 1,500,000
2006,2007 and 2008 2,000,000
2009 3 ,500,000
2010 Taxes Repealed
2011 Taxes Due To Be Reinstated

-

26 U.S.C. § 2010.
If estate taxes are due and have not been paid, the District Director of the Internal Revenue
Service has the authority to release the lien upon being furnished a bond conditioned on the
payment of the tax. U.S. Treas. Reg. 301.6325-1(a)(2). Similarly, the District Director may
release the lien if the fair market value of the remaining property is at least double the amount of
the outstanding tax plus all prior liens against the property. U.S. Treas. Reg. 301.6325- 1(b)(l).
Other release authority is set out in U.S. Treas. Reg. 301.6325-1. An estate tax lien is divested
with respect to property sold under court order to pay debts and administration expenses. 26
U.S.C. § 6324(a)(l). In some instances, upon satisfaction that adequate liquid assets are available,
examiners frequently rely upon an affidavit of the personal representative that the taxes will be
paid.
Caution:
An examiner should utilize the tabular infonnation in the Comment only with respect to
taxable estates of decedents who die before January 1, 2011.
Source:
Citations in the Comment.
Tex. Prob . Code Ann. § 37.
Stanley M . Johanson, Johanson' s Texas Probate Code Annotated§ 37 (1998).
History:
Adopted, October 9, 1999.

Standard 11.70. Heirship Affidavits
In the absence of infonnation to the contrary, an examiner may rely upon an affidavit of
heirship with respect to the family history and the identity of heirs of a decedent.

-

Comment:

41

Examiners commonly rely upon affidavits of heirship when the family history and the
identity of the heirs of a decedent are not otherwise known. Heirs can also be determined in an
action to declare heirship as provided in Tex. Prob. Code Ann. §§ 48-56.
In addition, Tex. Prob. Code Ann. § 52 provides that, subject to rebuttal, a statement offacts
concerning family history shall be received as prima facie evidence in any proceeding to declare
heirship or suit involving title if contained in a document legally executed and acknowledged or
sworn to and if the document has been of record five years in the county where the land is located
or the county where the decedent had his domicile or residence at the time of his death.
Recent affidavits are also commonly accepted. In obtaining an affidavit of heirship, it is
desirable for the affiant to be a person related to the decedent but who does not inherit from the
decedent. If none is available, a person possessing personal knowledge of the decedent is the next
choice. If neither is available, an interested heir can be used. In the latter case, it is also desirable
to obtain a supporting affidavit from a person who has no interest in the estate.
Tex. Prob. Code Ann. § 52A sets out a suggested form for an affidavit of heirship.
The Texas Rules of Evidence provide exceptions to the hearsay rule that permit hearsay
evidence of family history. Tex. R. Evid. 803, 804. See also Standard 3.40 and Chapter XIII.
Source:
Citations in the Comment.
Tex. Prop. Code Ann. § 12.001(a).
5A Aloysius A. Leopold, Land Titles and Title Examination § 41.23 (Texas Practice 3d ed.
2005).
Stanley M. Johanson, Johanson's Texas Probate Code Annotated§§ 48, 52 (1998).
17 M . K. Woodward & Ernest E. Smith, III, Probate and Decedents' Estates § 208 (fexas
Practice 1971).
J. Howard Hayden, Affidavits of Heirship, 31 Tex. B . J. 741(1968).
History:
Adopted, October 9, 1999. Title changed and comment modified by Board, May 22,2000.

-

Standard 11.80. Community Survivors

If no one has qualified as executor or administrator of the estate of a decedent who was
married, the examiner may rely upon a conveyance of community property from the surviving
spouse, acting as community survivor pursuant to Tex. Prob. Code Ann. § 160, made for the
purpose of paying community debts.
Comment:
A surviving spouse who acts as community survivor under the authority of Tex. Prob. Code
Ann. § 160 is commonly called an " unqualified survivor" as opposed to a surviving spouse who
" qualifies " pursuant to Tex. Prob. Code Ann. § 161.
If a community debt existed at the date of death, it is presumed that the debt continues to exist
to the time of the conveyance.
For estates of decedents dying intestate after September 1, 1993, the Texas Probate Code
provides that title to community property passes to the surviving spouse if all the decedent' s
descendants are also the surviving spouse' s descendants, in which case no administration on the
community property is necessary. Tex. Prob. Code Ann. §§ 45 , 155.
Source:
Citations in the Comment.
Tex. Prob. Code Ann. § 160.
4 Aloysius A. Leopold, Land Titles and Title Ex amination § 20.12 (Texas Practice 3d ed.
2005).
Stanley M . Johanson, Johanson' s Texas Probate Code Annotated§ 160 (1998).

42

-

17 M. K. Woodward & Ernest E. Smith, III, Probate and Decedents' Estates § 544 (Texas
Practice 1971).
History:
Adopted, October9, 1999.
Standard 11.90. Community Administration

If a surviving spouse of a decedent who dies before September 1, 2007, has qualified as a
statutory community administrator, an examiner may rely ,upon a deed of community property
from the administrator without further court order.
Comment:
Tex. Prob. Code Ann. §§ 161-177, prior to September l , 2007, governed the appointment and
activities of a community administrator. Those sections were repealed as of that date, but the law
in effect at the date of death of a decedent who died before that date governs a community
administration of the estate of the decedent.
A community administrator who qualified respecting a decedent who died before September
1, 2007, had broader powers than those of an unqualified community survivor. For example, a
community administrator could sell community property without regard to the existence of
community debts.
For estates of decedents dying intestate after September l , 1993, the Texas Probate Code
provides that title to community property passes to the surviving spouse if all the decedent's
descendants are also the surviving spouse' s descendants, in which case no administration on the
community property is necessary. Tex. Prob. Code Ann. §§ 45 , 155.
Source:
Citations in the Comment.
4 Aloysius A. Leopold, Land Titles and Title Examination § 20.12 (Texas Practice 3d ed.
2005).
Stanley M. Johanson, Johanson' s Texas Probate Code Annotated§§ 161- 177 (1998).
17M. K. Woodward & Ernest E. Smith, III, Probate and Decedents' Estates § 574 (Texas
Practice 1971).
History:
Adopted, October 9, 1999; amended, June 27, 2008. The original standard provided: "If a
surviving spouse has qualified as community administrator in the manner prescribed in Tex. Prob.
Code Ann. §§ 161-177, an examiner may rely upon a deed of community property from the
administrator without further court order."
Standard 11.100. Foreign WiUs

An examiner may rely upon an exemplified copy of a will probated outside of Texas, as being
effective to pass title to property in Texas owned by a decedent, if the will and the order
admitting the will to probate are probated in Texas pursuant to Tex. Prob. Code Ann. § 95 or are
filed in the deed records pursuant to Tex. Prob. Code Ann. § 96.

-

-

Comment:
A foreign will is one probated outside of Texas in any of the United States, its territories, the
District of Columbia, or any foreign nation . In cases where the appointment of a personal
representative in Texas is unnecessary, Tex. Prob. Code Ann. § 96 permits an authenticated copy
of the foreign will and of the order admitting the will to probate to be filed in the records of the
county where the land is located. If a personal representative is needed, Tex. Prob. Code Ann. §
95 provides a simplified procedure for the probate in Texas of the foreign will.

43

This procedure is rarely used, however, as the recording of the will in the deed records is
usually sufficient for most purposes.
If a foreign will that is recorded in the deed records gives an executor a power of sale, that
power may be exercised in Texas without court order. Tex. Prob. Code Ann. § 107.
Although only the will and the order probating the will are necessary, a complete copy of the
foreign probate, including the application to probate and the order closing the estate, is desirable
as it may contain important information, such as the date of the decedent's death and the names
and addresses of surviving heirs.
Caution:
An exemplified copy is not a mere certified copy. To be exemplified, the foreign will and the
order admitting it to probate must be authenticated in the manner prescribed in Tex. Prob. Code
Ann. § 95(c). The required documentation is commonly called a " three-way certificate. "
Source:
Citations in the Comment. .
Tex. Prob. Code Ann. §§ 95, 96, 107.
17M. K. Woodward & Ernest E. Smith, III, Probate and Decedents' Estates § 421 (fexas
Practice 1971).
History:
Adopted, October 9, 1999.

CHAPTER XII
BANKRUPTCIES

....

-

Standard 12.10. Relevance Of Bankruptcy Cases To Real Estate Transactions
The examiner should consider whether a person in the chain of title or in a proposed
transaction is or was a debtor in a bankruptcy proceeding. If the person in the chain of title has
been or is a debtor in a bankruptcy proceeding, the land may have been or may be property of the
estate, subject to the jurisdiction and control of the bankruptcy proceeding.
Comment:
A "debtor" is a person or municipality concerning which a bankruptcy case has been
commenced since October 1, 1979, the effective date of the Bankruptcy Code. 11 U.S.C. §
101(13). Formerly, the person subject to a bankruptcy case was commonly known as a
" bankrupt." There are generally four types of bankruptcy cases: a Chapter 7 " liquidation"; a
Chapter 11 ''reorganization''; a Chapter 12 ''adjustment of debts of a family farmer or fisherman
with regular annual income" ; and a Chapter 13 "adjustment of debts of an individual with
regular income." A Chapter 9 case applies only to a political subdivision or public agency or
instrumentality of a state. The commencement of a voluntary case (filed by the debtor alone or
jointly with a spouse) or an involuntary case (filed by another person, such as a creditor) creates
an estate. The estate includes all legal and equitable interests of the debtor in property as of the
commencement of the case. The estate also includes property that the debtor acquires or becomes
entitled to acquire within 180 days after the commencement of the case by bequest, devise or
inheritance, by property settlement agreement with the debtor's spouse or in an interlocutory or
fmal divorce decree, or as a beneficiary of a life insurance policy or death benefit plan. 11 U.S. C.
§ 541. The trustee may avoid post-petition transactions (transactions occurring after the
commencement of the bankruptcy case of the debtor), unless protected under §§ 549 (b) and (c)
of Title 11 or unless the transaction is authorized by the bankruptcy court or the Bankruptcy
Code. 11 U.S.C. § 549(a). The trustee may not avoid a transfer made by the debtor in an
involuntary bankruptcy case before the order for relief, to the extent any value is given in
exchange for the transfer, notwithstanding any notice or knowledge of the bankruptcy case that

44

-

the transferee has. 11 U.S.C. § 549(b). The trustee may not avoid a transfer of an interest in real
property to a good faith purchaser without knowledge of the commencement of the case and for
present fair equivalent value unless a copy or notice of the petition was filed in the real property
· records before the transfer was perfected. 11 U.S.C. § 549(c). A " purchaser" is a transferee of a
voluntary transfer. 11 U.S .C. § 101(43). A "transfer" includes the creation of a lien, a
foreclosure, and each mode, direct or indirect, absolute or conditional, voluntary or involuntary,
of disposing or parting with property or an interest in property. 11 U.S.C. § 101(54). The
automatic stay does not apply to a transfer that is not avoidable under Section 544 and that is not
avoidable under Section 549. 11 U.S. C. § 362(b)(24). An action or proceeding under 11 U .S.C. §
549 to set aside a post-petition transaction must be commenced no later than the earlier of (1) two
years after the date of the transfer or (2) the time the case is closed or dismissed. 11 U.S.C. §
549(d).
Source:
Citations in the Comment.
5 Collier on Bankruptcy, Chapters 541 , 549 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

Standard 12.20. Authority For Prior Transfer

If the examiner has knowledge that the owner or transferor in a prior real estate transaction
recorded within two years prior to the current examination was then a debtor in a bankruptcy
case, the examiner should determine that the prior transfer was authorized in that case. If the
chain of title discloses that the owner or transferor in a prior real estate transaction in the chain of
title was then a debtor in a bankruptcy case, the examiner should determine that the prior transfer
was authorized in that case.

-

Comment
If a prior real estate transaction in the chain of title was recorded more than two years prior to
the current examination and if a bankruptcy case filed by or against the transferor or owner in that
prior transaction is not disclosed in the chain of title, the examiner is not required to determine
whether the prior real estate transaction was authorized in a bankruptcy proceeding, regardless of
whether the examiner has knowledge that the owner or transferor in the prior transaction was then
a debtor in a bankruptcy case. Notice is commonly given by a copy or notice of the bankruptcy
petition filed by or against the owner or transferor. 11 U .S.C. § 549(c).
The trustee in a bankruptcy case may not avoid a transfer of an interest in real property to a
good faith purchaser without knowledge of the commencement of the case and for present fair
equivalent value unless a copy or notice of the petition was filed in the real property records
before the transfer was perfected. 11 U.S.C. § 549 (c). An action or proceeding under 11 U.S. C. §
549 to set aside a post-petition transaction must be commenced no later than the earlier of (1) two
years after the date of the transfer or (2) the time the case is closed or dismissed. 11 U.S .C . § 549
(d).
Caution:
A mortgagee purchasing at a foreclosure of its mortgage encumbering an interest owned by
the debtor may not be protected under 11 U.S.C. § 549(c) (absent lift or annulment of the
automatic stay) because it has not paid present consideration. In re Penfil, 40 B.R . 474 (Bankr.
E.D.Mich.1984); In re Major, 218 B.R. 501 (Bankr. W.D. Mo. 1998). A third-party bona fide
purchaser without knowledge buying at a foreclosure may not be protected. Although Section
362(b)(24) provides that the automatic stay does not apply to a transfer that is not avoidable under
§ 549, the purchaser may not be treated as a protected purchaser because the definition of
"purchaser" means " transferee of a voluntary transfer." 11 U. S. C. § 101 (43).

45

Prior to the 2005 amendments to the Bankruptcy Code, a beneficiary of a deed of trust from
the debtor was not protected Wider 11 U.S.C. § 549 (c). In re McConville, 110 F.3d 47 (9th
Cir. l997). Apparently, the post-petition bona fide mortgagee will now be protected if a copy or
notice of the bankruptcy petition is not filed before the mortgage is filed. An amendment to §
549(c) protects a post-petition transfer of "an interest in" real property, the addition of §
362(b)(24) provides that the stay does not apply to a transfer that is not avoidable under§ 549,
and the expansion of the defmition of "transfer" in§ 101(54) includes the creation of a lien. 11
U.S.C. §§ 101(54), 362(b)(24), 549(c). However, this protection is contingent upon the lender
being a "bona fide" lender without knowledge of the bankruptcy.
An assignee of a deed of trust from a debtor apparently will not be protected by 11 U.S.C. §
549(c) because the assignment involves a sale of a promissory note secured by a deed of trust,
and the note " retains its identity as personal property" which is not protected by § 549 (c). In re
Rice, 83 B.R 8, 11 (Bankr. 9th Cir.1987).
Source:
Standard 1.20.
Citations in the Comment.
5 Collier on Bankruptcy, Chapter 549 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

Standard 12.30. Reliance Upon Recitals Of Authority For Prior Transfer
If a copy of an order in the bankruptcy case authorizing a prior real estate transaction in the
chain of title has been recorded, the examiner may rely upon the order to determine that the
transaction was authorized in the bankruptcy case. If the instrument evidencing the transaction
was recorded more than two years prior to the examination, the examiner may rely upon any
recitals in the chain of title that the transaction was authorized in bankruptcy case. Recitals may
include a statement in the instrument in the chain of title that the grantor was acting as trustee or
debtor in possession, that the property had been exempted or abandoned, that the automatic stay
had been lifted or annulled to authorize a foreclosure, or that the transaction evidenced by the
instrument had been otherwise authorized in the bankruptcy case.
Comment:
Although the Bankruptcy Code does not explicitly authorize reliance upon recitals in an
instrument executed by the debtor or trustee, there are numerous legal principles that will
generally justify reliance upon the apparent authority set forth in an instrument in the chain of
title. An action or proceeding by the trustee to set aside a transfer of property of the estate made
after the commencement of the bankruptcy case and that is not properly authorized may not be
commenced after the earlier of ( 1) two years after the date of tl1e transfer sought to be avoided or
(2) the time the case is closed or dismissed. 11 U.S.C. § 549 (d). A motion to set aside a judgment
or order must be made within one year if for (1) mistake, inadvertence, surprise, or excusable
neglect; (2) newly discovered evidence which by due diligence could not have been discovered in
time to move for a new trial; or (3) fraud, misrepresentation, or other misconduct of an adverse
party. This time limit to file a motion to set aside a judgment or order does not apply if the
judgment is void. Fed. R. Civ. P. 60(b). The Bankruptcy Code also favors reliance upon court
orders, notwithstanding appeals from those orders. The reversal or modification of an
authorization of sale or lease under 11 U.S .C. § 3 63 (b) or (c) does not affect the validity of the
sale or lease to an entity that purchased or leased in good faith, whether or not the entity knew of
the pendency of an appeal, unless the sale or lease was stayed pending appeal. 11 U.S.C. § 363
(m). The reversal or modification on appeal of authorization to grant a lien does not affect the
validity or priority of the lien to an entity that extended credit in good faith, whether or not he

46

-

entity knew of the pendency of the appeal, unless the granting of the lien was stayed pending
appeal. 11 U.S.C. § 364 (e). A motion to revoke a confirmation of a plan must be filed before 180
days after entry of the order of confirmation. 11 U.S.C. §§ 1144, 1230, 1330.

Caution:
If the examiner has knowledge that the transaction was not properly authorized or is in
dispute, the examiner may make additional requirements. For example, if the taxing authority has
refused to remove delinquent taxes from the tax rolls based upon a sale free and clear of liens, the
examiner may require an additional court order or except to the taxes. It appears that Section 106
which waives sovereign immunity of certain governmental units is unconstitutional, at least in
part as to Section 106(a), because of the limitations ofU. S. Canst. amend XI. See In re Mitchell,
209 F.3d 1111 (9th Cir. 2000) (filing of adversary proceeding against non-consenting state
violates sovereign immunity). However, Section 106(b), which provides that the filing of a claim
may be a valid partial waiver of sovereign immunity with respect to the same transaction or
occurrence, may be constitutional. Arecibo Community Health Care, Inc. v. Commonwealth of
Puerto Rico, 270 F.3d 17 (1st Cir. 2001) (citing cases considering whether Section 106(b), which
waives immunity based on filing of claim, is constitutional). A sale free and clear of a state lien
will not violate sovereign immunity.
[I]n Van Huffel v. Harkelrode, 284 U.S. 225, 228-229, 76 L. Ed. 256, 52 S.Ct. 115
(1931), we held that the Bankruptcy Court had the authority to sell a debtor's property
"free and clear" of a State's tax lien. At least when the bankruptcy court' s jurisdiction
over the res is unquestioned our cases indicate that the exercise of its in rem jurisdiction
to discharge a debt does not infringe state sovereignty In Van Huffel, we affirmed the
bankruptcy courts ' power to sell property free from incumbrances, including States'
liens, and approvingly noted that some courts had chosen specifically to discharge States'
liens for taxes . ...
Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 450-451 , 124 S.Ct. 1905, 158 L. Ed.
2d 764 (2004).
Source:
Citations in the Comment.
Standard 3 .40.
3 Collier on Bankruptcy,~ s 363.11, 364.06; 5 Collier on Bankruptcy, ~ 549.07; 8 Collier on
Bankruptcy, Chapters 1144, 1230, 1330 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

Standard 12.40. Authority For Proposed Transfer By Debtor Or Trustee
If the examiner has knowledge that the owner is the debtor in a bankruptcy case or if the
bankruptcy is disclosed in the chain of title in the real property records, the examiner should
determine whether the proposed transaction is authorized in that case and should require that a
certified copy of the order or other evidence of authority be recorded in the real property records.

-

Comment:
The commencement of a bankruptcy case creates an estate, which includes legal or equitable
interests of the debtor in property as of the commencement of the case, and in property the debtor
acquires within 180 days after the commencement of the case by bequest, devise or inheritance,
or as a result of a property settlement agreement with the debtor' s spouse. 11 U.S.C. § 54l(a).
The estate does not include certain interests in liquid or gaseous hydrocarbons to the extent the
debtor has transferred or agreed to transfer the interests pursuant to a farmout agreement or any

47

written agreement directly related to a farmout agreement, or to the extent the debtor has
transferred such interest pursuant to a written conveyance of a production payment to an entity
that does not participate in the operation of the property. 11 U.S.C. §§ 54l(b)(4), 101(21A),
101(42A), 101(56A). A bankruptcy petition creates an automatic stay, which includes a stay
against enforcement against the debtor or property of the debtor of a claim that arose before the
commencement of the case. 11 U.S .C. § 362. The debtor or trustee may not sell or mortgage
property of the estate, except as authorized by 11 U.S.C. §§ 363, 364. The trustee in a bankruptcy
proceeding may not avoid a transfer of an interest in real property to a good faith purchaser
without knowledge of the commencement of the case and for present fair equivalent value unless
a copy or notice of the petition was filed in the real property records before the transfer was
perfected. 11 U.S. C. § 549 (c). An action or proceeding under 11 U.S.C. § 549 to set aside a postpetition transaction must be commenced no later than the earlier of (1) two years after the date of
the transfer or (2) the time the case is closed or dismissed. 11 U.S .C. § 549 (d). If the examiner
has knowledge that the current owner is a debtor in a bankruptcy case, the examiner should
require satisfactory evidence that the current transaction is authorized.
Caution:
A mortgagee purchasing at a foreclosure of its mortgage encumbering an interest owned by
the debtor may not be protected under 11 U.S .C. § 549(c) (absent lift or annulment of the
automatic stay) because it has not paid present consideration. In re Penfll, 40 B.R. 474 (Bankr.
E.D. Mich.l984); In re Major, 218 B.R. 501 (Bankr. W.D. Mo. 1998). A third-party bona fide
purchaser without knowledge buying at a foreclosure may not be protected. Although· Section
362(b)(24) provides that the automatic stay does not apply to a transfer that is not avoidable under
§ 549, the purchaser may not be treated as a protected purchaser because the defmition of
"purchaser" means " transferee of a voluntary transfer." 11 U.S.C. § 101(43).
Prior to the 2005 amendments to the Bankruptcy Code, a beneficiary of a deed of trust from
the debtor was not protected under 11 U.S .C. § 549(c). In re McConville, 110 F.3d 47 (9th Cir.
1997). Apparently, the post-petition bona fide mortgagee will now be protected if a copy or
notice of the bankruptcy petition is not filed before the mortgage is filed . An amendment to 549
(c) protects· a post-petition transfer of "an interest in" real property, the addition .of§ 362(b)(24)
provides that the stay does not apply to a transfer that is not avoidable under § 549, and the
expansion of the definition of "transfer" in § 101(54) includes the creation of a lien. 11 U.S.C.
§§ 101(54), 362(b)(24), 549(c). However, this protection is contingent upon the lender being a
"bona :fide" lender without knowledge of the bankruptcy. An assignee of a deed of trust from a
debtor apparently will not be protected by 11 U.S.C. § 549(c) because the assignment involves a
sale of a promissory note secured by a deed of trust, and the note " retains its identity as personal
property" (which is not protected by§ 549(c)). In re Rice, 83 B.R. 8, 11 (Bankr. 9th Cir.1987).
Source:
Citations in the Comment.
3 Collier on Bankruptcy, Chapters 362,363, 364; 5 Collier on Bankruptcy, Chapters 541, 549
(Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.
Standard 12.50. Authority To Convey Exempted Land In Proposed Transaction
If the examiner has knowledge that the current owner is the debtor in a bankruptcy case and
the property is to be sold by the debtor based on the debtor's claim of exemptions in the
bankruptcy case, the examiner should require evidence that (1) the land was claimed in the
Schedule of Exempt Property as exempt under state law and (2) no objections were made within
30 days after the conclusion of the ''first' ' meeting of creditors or the filing of any amendment to
the list or supplemental schedules or such longer time for objection as was granted by the court.

48

-

-

The examiner should require that evidence that the property has been exempted be recorded in the
real property records.
Comment:
An individual debtor may exempt from property of the estate that property claimed as exempt
under state law or under the applicable federal exemptions. In a joint case, both spouses must
choose the same exemptions. 11 U.S.C. § 522 (b)(l). Fed. R. Bankr. P. 4003 (b) provides that the
trustee or any creditor may file objection to the claimed exemptions within 30 days after the
conclusion of the meeting of creditors or the filing of any amendment to the list or supplemental
schedules, unless the court grants additional time for objection within that period. If objection has
been flled, the examiner should also be furnished for review any order by the bankruptcy court
overruling or otherwise resolving such objection.
The exemptions are scheduled in the Schedule of Real Property (Schedule "B-1" for cases
filed prior to August 1, 1991, or Schedule "A" for cases filed on or after August 1, 1991) and the
Schedule of Exempt Property (Schedule "B-4" for cases filed prior to August 1, 1991, or
Schedule "C'' for cases filed on or after August 1, 1991). The Schedules should be reviewed to
verify whether the exemptions under state law (pursuant to 11 U.S .C. § 522(b)(3)) are chosen or
whether the federal exemptions (pursuant to 11 U.S.C. §§ 522(b)(2), 522(d)) are chosen. If the
federal exemptions are chosen, only an equity interest is exempted (subject to indexing of the
allowed amount pursuant to 11 U.S. C. § 104) and the remaining value of the land remains part of
the estate until abandoned. If the state exemptions are chosen, the exemptions are subject to the
limitations set forth in 11 U.S .C. § 522. The title examiner also should be aware that even though
property is exempt, a mortgagee or other lien creditor may not commence or continue a
foreclosure action against the debtor or obtain a conveyance from the debtor, so long as the
automatic stay continues in effect. Unless relief from the automatic stay has been obtained (by
final order of the bankruptcy court to permit the action) or an exception to the stay applies under
§ 362(b), the stay continues until the earliest of (a) the closing of the bankruptcy case, (b) the
dismissal of the bankruptcy case or (c), in a Chapter 7 case concerning an individual or in a case
under Chapter 9, 11, 12 or 13, the grant or denial of discharge. 11 U.S.C. § 362; Fed. R. Bankr. P.
4001.

Caution:
Examiners should not rely upon evidence that the land has been exempted in a Chapter 12 or
Chapter 13 bankruptcy case prior to the court's discharge after completion of the plan, unless the
court authorizes the conveyance or encumbrance by the debtor in the plan or a separate order. In
re Turek, 346 B.R. 350 (Bankr. M.D. Pa. 2006). The sale or encumbrance by the debtor may
require a modification of the plan or may require court approval because of local rules or
provisions of the plan.
Source:
Citations in the Comment.
Fed R. Bankr. P . 1007 (c).
4 Collier on Bankruptcy, Chapter 522, ~ 522.05 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

Standard 12.60. Authority To Convey Abandoned Land In Proposed Transaction

-

-

If the examiner has knowledge that the current owner is the debtor in a bankruptcy case and
the property is to b e sold by the debtor based on abandonment of the property in the bankruptcy
case, the examiner should require evidence that (1) the trustee in the bankruptcy case or the
debtor in possession gave notice of intent to abandon the property and that no objections were
filed within 15 days after the mailing of the notice or such other time fixed by the court, (2) the

49

bankruptcy court ordered the property abandoned, by a final nonappealable court order, or (3) the
property is scheduled in the bankruptcy case and is not dealt with prior to the closing of the case.
The examiner should require that a certified copy of the order of abandonment or other evidence
of authority to abandon be recorded in the real property records.
Comment:
After notice and a hearing, the trustee (or debtor in possession) may abandon property of the
bankruptcy estate. On request of a party in interest and after notice and a hearing, the court may
order the trustee to abandon property of the estate. A party in interest must file and serve an
objection to the notice of proposed abandonment by the trustee or debtor in possession within 15
days of the mailing of the notice, or within the time fixed by the court. 11 U.S.C. §§ 554, 11 07;
Fed. R. Bankr. P. 6007. Upon abandonment, control of the property abandoned reverts to and
revests in the debtor. In such event, unless the automatic stay has terminated, a mortgagee or
other lien creditor must obtain relief from the automatic stay as to the debtor by fmal order of the
bankruptcy court before foreclosing the debtor's interest. 11 U.S.C. § 362; Fed. R. Bankr. P.
4001 . An order of abandonment is not final and nonappealable until 3 0 days after the entty of the
order. Fed. R. Bankr. P. 8002. Unless the court orders otherwise, property scheduled and not
otherwise administered at the time of the closing of the estate is abandoned to the debtor.
Property that is not abandoned and that is not administered (such as property never scheduled or
dealt with) remains property of the estate. 11 U.S.C. § 554.

Caution:
The examiner should not rely upon the final report of the trustee as constituting a closing of
the estate. The fmal report and final account constitute a presumption of full administration if no
objections are filed within 30 days, but are not equivalent to an order closing the estate. Fed. R.
Bankr. P. 5009; In re Reed, 89 B.R. 100 (Bankr. C.D.Cal.1988), aff'd 940 F.2d 1317 (9th
Cir.1991) (discussing "no asset" report); In re Ginsberg, 164 B.R. 870 (Bankr. S.D.N.Y.l994);
In re Schoenewerk, 304 B.R. 59 (Bankr. E.D. N.Y. 2003).
Source:
Citations in the Comment.
5 Collier on Bankruptcy, Chapter 554 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

Standard 12.70. Authority To Foreclose Land In Proposed Transaction
If a deed of trust encumbering property of the estate or property of the debtor is to be
foreclosed and the automatic stay has not otherwise terminated, the examiner should require
satisfactory evidence that the mortgagee filed a motion to lift stay, that notice of the motion for
relief from the automatic stay was served in accordance with the Bankruptcy Rules and applicable
local rules, and that the bankruptcy court granted the motion prior to commencement of the
foreclosure . The examiner should require that a certified copy of the order lifting stay or other
evidence of lift of stay be recorded in the real property records.
Comment:
The filing of a bankruptcy petition operates as an automatic stay that prevents enforcement of
any lien against property of the estate and that prevents enforcement of a lien that secured a claim
that arose before the commencement of the case. 11 U.S.C. § 362. A motion for relief from the
automatic stay must be served in accordance with Fed. R. Bankr. P. 4001 and 9014. The motion
must be served on the official committees, or on scheduled creditors, if there are no committees
appointed. The motion also must be served on such other entities as the court may order and as

50

-

provided by local rules. Fed. R. Bankr. P. 4001(a)(1). For example, Rule 4001 of the Bankruptcy
Rules for the Southern District of Texas requires that, in addition to service required by Fed. R.
Bankr. P . 4001, the motion must be served on the debtor, debtor' s attorney, parties requesting
notice, parties with an interest in collateral that is the subject of the requested relief (e.g., other
lienholders), co-debtors under 11 U .S.C. § 1301, parties ·who are identified as a party against
whom relief is sought in the motion, and the trustee. An agreement for relief from the stay may be
granted after notice, unless objections are filed within 15 days after mailing of notice (or such
other time fixed by the court). Fed. R. Bankr. P. 400l(d).
A bankruptcy court may terminate, lift, or annul a stay. The automatic stay may be lifted or,
for a variety of reasons, may not exist, such as (1) without court order after passage of 30 days
after motion for relief, unless the court continues the stay (or after 60 days, if the debtor is an
individual in a Chapter 7, 11, or 13 proceeding), 11 U.S. C. § 362(e), Advisory Committee Note to
R4001 ; (2) by court order recorded in the real property records and effective for two years that
fmds the petition was part of a scheme to delay, hinder, and defraud creditors involving multiple
filings or transfers without lender consent, 11 U.S.C. §§ 362(b), 362(d)(4); (3) where a case is
filed in violation of a bankruptcy court order in a prior case, 11 U .S.C. § 362(b)(21)(B); or (4) by
court order confirming that the stay has been terminated because of certain frequent filings, 11
U.S.C. § 362(j). The court may annul a stay after a foreclosure has been commenced or
conducted. 11 U .S.C. § 362(d). The stay does not otherwise terminate until the case is closed,
until the case is dismissed, or, if the case is under Chapter 7 concerning an individual or under
Chapter 9, 11, 12, or 13, until the time the discharge is granted or denied. The discharge is
granted or denied in a case under Chapter 11 upon confirmation of the plan, unless the debtor is
an individual. 11 U.S.C.A. ll41(d). The discharge is granted or denied in a case under Chapter 12
or 13, or in a case of an individual under Chapter 11, after completion of the plan. 11 U.S.C.A. §§
1141 (d), 1228, 1328. An order granting a lift or annulment of stay is not fmal and nonappealable
untillO days after the entry of the order. Fed. R. Bankr. P. 8002 . An order granting a motion for
relief from the automatic stay is stayed until the expiration of 10 days after the entry of the order,
unless the court orders otherwise. Fed. R. Bankr. P. 4001(a)(3).
Source:
Citations in the Comment.
3 Collier on Bankruptcy, Chapter 362 (Matthew Bender 15th Ed. Revised 2005).
History :
Adopted, October 9, 1999; amended June 16, 2006; amended June 27, 2008. The amended
standard of June 16, 2006 provided: "If a deed of trust encumbering property of the estate or
property of the debtor is to be foreclosed and the automatic stay has not otherwise terminated, the
examiner should require satisfactory evidence that (1) the mortgagee filed a motion to lift stay;
(2) notice of the motion for relief from the automatic stay was served in accordance with the
Bankruptcy Rules and applicable local rules; and (3) the bankruptcy court granted the motion
prior to commencement of the foreclosure; or, if no order grants or denies relief or continues the
stay more than 60 days from the date of the request for relief from the stay prior to
commencement of the foreclosure if the debtor is an individual in a Chapter 7, 11 or 13 case or
otherwise more than 30 days from the date of the request for relief from the stay prior to
commencement of the foreclosure. The examiner should require that a certified copy of the order
lifting stay or other evidence of lift of stay be recorded in the real property records."
The original standard provided: "If a deed of trust encumbering property of the estate or
property of the debtor is to be foreclosed and the automatic stay has not otherwise terminated, the
examiner should require satisfactory evidence that (1) the mortgagee filed a motion to lift stay;
(2) notice of the motion for relief from the automatic stay was served in accordance with the
Bankruptcy Rules and applicable local rules; and (3) the bankruptcy court granted the motion
prior to commencement of the foreclosure; or, if no order grants or denies relief or continues the
stay, more than 30 days passed from the date of the request for relief from the stay prior to

-

51

commencement of the foreclosure. The examiner should require that a certified copy of the order
lifting stay or other evidence of lift of stay be recorded in the real property records."

Standard 12.80. Authority To Convey Or Lease Property Of The Bankruptcy Estate Not In
The Ordinary Course Of Business In Proposed Transaction
If property will be sold or leased by the bankruptcy trustee or debtor in possession, other than
in the ordinary course of business, the examiner should require evidence of the following: (1) 20
days' notice of sale to the debtor, the trustee, all creditors and indenture trustees by mail, unless
the court orders the time shortened; (2) no objections to the sale were made or the court by order
overruled the objections and authorized the sale; and (3) the order of sale, if any, is nonappealable
or is not stayed pending appeal. The examiner should require that a certified copy of the order or
other evidence of authority to sell or lease be recorded in the real property records.
Comment:
The trustee or debtor in possession, after notice and a hearing, may sell property of the estate
other than in the ordinary course of business. 11 U .S.C. §§ 363, 1107. The clerk or some other
person as the court may direct must give the debtor, the trustee, all creditors and indenture
trustees at least 20 days' notice by mail of a proposed sale of property of the estate other than in
the ordinary course of business, unless the court for cause shortens the time or directs another
method of notice. Fed. R. Bankr. P. 2002 (a), 6004. The reversal or modification on appeal of an
order of sale does not affect the finality or validity of a sale to an entity that bought the property
in good faith, whether or not the entity knew of the appeal, unless the sale was stayed pending
appeal. 11 U.S.C. § 363 (m). An order authorizing a sale is not final and nonappealable until 10
days after the entry of the order. Fed. R. Bankr. P. 8002. An order authorizing the use, sale, or
lease of property other than cash collateral is stayed until the expiration of 10 days after entry of
the order, unless the court orders otherwise. Fed. R. Bankr. P. 6004(h). An objection to a
proposed sale must be filed and served no less than five days before the date set for the proposed
action or in the time set by the court. Fed. R. Bankr. P. 6004(b). If timely objection is not made,
courtapprovalofthesaleisnotrequired. Fed . R. Bankr. P. 6004(e); 11 U.S.C. §§ 102(1),363(b).
Apparently, a grant or transfer of rights under an oil and gas lease would be governed by the
requirements for a sale of property of the estate, and would not be controlled by the provisions
relating to rejection, assumption and assignment of executory contracts and unexpired leases. In
re Topco, Inc., 894 F.2d 727, 739 (5th Cir.l990) reh'g denied, en bane; River Production Co. v.
Webb, 902 F.2d 955 (5th Cir.l990) (dictum at footnote 17 asserts that state law determines
whether oil and gas leases are subject to § 365 as unexpired leases, and that such oil and gas
" leases" in Texas are conveyances of determinable fee interests subject to the provisions of §
363 regarding sales, rather than subject to § 365 as unexpired "leases"); In re WRT Energy
Corporation, 202 B.R. 579 (Bankr. W.D.La.l996) (Louisiana mineral lease was not an unexpired
lease or executory contract subject to assumption or rejection under 11 U.S.C. § 365). A sale of
an easement may be made pursuant to § 363. In re Probasco, 839 F.2d 1352 (9th Cir.l988) (sale
of co-owner's interest in easement pursuant to 11 U.S.C. § 363(h)).
Caution:
In certain circumstances, an examiner should not rely upon a court order authorizing a sale
from the time that the order is signed or entered on the docket. For example, the issue of the good
faith of the purchaser may be considered on appeal, even though no stay was granted. In re Paolo
Gucci, 105 F.3d 837 (2d Cir.l997); In re Abbotts Dairies of Pennsylvania, Inc., 788 F.2d 143 (3d
Cir.l986). Also, an order authorizing a sale is an automatic "stay" for 10 days after entry of the
order, unless the court orders otherwise. Fed. R. Bank. P. 6004(h).
Source:
Citations in the Comment.

52

3 Collier on Bankruptcy, Chapter 363 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

Standard 12.90. Authority To Convey Property Of The Bankruptcy Estate In The Ordinary
Course Of Business In Proposed Transaction
If property will be sold or leased by the bankruptcy trustee or debtor in possession, in the
ordinary course of business, the examiner should require evidence of the following: (1) if the
trustee is acting in a Chapter 7 case, the court must authorize the trustee to operate the business
and should authorize real estate sales in the ordinary course of business; or (2) if the debtor in
possession or trustee is acting in a Chapter 11 case, the authority of the debtor or trustee has not
been limited by court order (and no plan has been confirmed). The examiner also should require
evidence that the sale will be made in the ordinary course of business be recorded in the real
property records.

Comment:
The trustee or debtor in possession may sell or lease property of the estate in the ordinary
course of business if authorized to operate the business under 11 U.S. C. §§ 721 , 1108, 1203, 1204
or 1304. 11 U.S.C. § 363(c)(1). The court may authorize the trustee to operate the business of the
debtor for a limited period in a Chapter 7 case. 11 U.S.C. § 721. Unless the court orders
otherwise, the trustee may operate the debtor's business in a Chapter 11 case. 11 U.S. C. § 1108.
A debtor in possession in a Chapter 12 case has the rights of a trustee serving in a Chapter 11
case, unless the court orders otherwise. 11 U.S.C. § 1203. Unless the court orders otherwise, a
debtor engaged in business may operate the business of the debtor and has the powers of a trustee
under§ 363 (c). 11 U.S. C. § 1303.

Caution:
In order to accomplish an ordinary course of business sale or lease, some examiners will
require (1) an order authorizing the trustee or debtor in possession to sell or lease in the ordinary
course of business, (2) a specific order authorizing the sale or lease, or (3) notice of a proposed
sale or lease and evidence that no objection to the sale or lease was filed. However, many
examiners do not believe that a sale or lease of real property in the ordinary course of business
may be made in a Chapter 12 or Chapter 13 proceeding. If the sale or lease is not made in the
ordinary course of business and is not otherwise authorized, it may be avoidable as a post-petition
transaction. 11 U.S.C. § 549.
Source:
Citations in the Comment.
3 Collier on Bankruptcy, Chapter 363 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

Standard 12.100. Authority To Convey Property Of The Bankruptcy Estate Free And Clear
Of Liens In Proposed Transaction

-

If property will be sold by the bankruptcy trustee or debtor in possession free and clear of
liens, the examiner should require evidence that: (1) 20 days' notice of sale disclosing that the
sale would be made free and clear of liens was given to the debtor, the trustee, all creditors,
including the creditors secured by liens on the land, and indenture trustees by mail, unless the
court orders the time shortened; (2) the court by order authorized the sale free and clear of liens;
and (3) the order of sale is nonappealable or is not stayed pending appeal. The examiner should
require that a certified copy of the order be recorded in the real property records.

53

Comment:
The trustee or debtor in possession, after notice and a hearing, may sell property of the estate
free and clear of liens. 11 U.S.C. §§ 363 (f), 1107. The clerk or some other person as the court
may direct must give the debtor, the trustee, all creditors and indenture trustees at least 20 days'
notice by mail of a proposed sale of property of the estate, unless the court for cause shortens the
time or directs another method of notice. Fed. R. Bankr. P. 2002 (a), 6004. A motion for authority
to sell free and clear of liens must be served on the parties who have liens on the property. The
notice shall include the date of the hearing on the motion and the time within which objections
may be filed and served. Fed. R. Bankr. P. 6004 (c). The reversal or modification on appeal of an
order of sale does not affect the finality or validity of a sale to an entity that bought the property
in good faith, whether or not the entity knew of the appeal, unless the sale was stayed pending
appeal. 11 U.S.C. § 363 (m). An order authorizing a sale is not fmal and nonappealable until 10
days after the entry of the order. Fed. R. Bankr. P. 8002. The date of " entry, of an order is the
date that the order is noted on the docket; the date of signature of an order is not determinative of
the date of entry. Fed. R. Bankr. P. 5003(a). An order authorizing the use, sale, or lease of
property other than cash collateral is stayed until the expiration of 10 days after entry of the order,
unless the court orders otherwise. Fed. R . Bankr. P. 6004(h).

Caution:
In certain circumstances, an examiner should not rely upon a court order authorizing a sale
from the time that the order is signed or entered on the docket. For example, the issue of the good
faith of the purchaser may be considered on appeal, even though no stay was granted. In re Paolo
Gucci, 105 F.3d 837 (2d Cir.l997); In re Abbotts Dairies of Pennsylvania, Inc., 788 F.2d 143 (3d
Cir.l986). The Bankruptcy Code § 363 (f) provides several bases to sell free and clear of liens,
including a sale if the price is greater than the aggregate ''value'' of all liens, or a sale if the lien
is in bona fide dispute. Many orders free and clear of liens provide that the liens attach to the
proceeds, and an examiner may wish to include such requirement. Given the reluctance of taxing
authorities to recognize such sales, the examiner may require payment of taxes, absent approval
of the order by the taxing authority. For the sale to be made free and clear of an IRS lien, notice
must have been given to (1) the IRS, (2) the United States attorney for the district in which the
action is brought, and (3) the Attorney General. Fed. R. Bankr. P . 6004 (c), 7004 (b)(4), 9014.
Notice to an insured depository institution must include notice by certified mail to an officer,
unless the institution has appeared by its attorney in the bankruptcy case (if the case is filed on or
after October 22, 1994). Fed. R . Bankr. P . 7004(h). The 2005 amendments to the Bankruptcy
Code changed the requirements for various notices, 11 USC § 342; however, examiners
reasonably and customarily rely on certificates confirming notice as evidence of compliance with
the notice requirements .
The examiner also should be aware that there is an automatic stay for 10 days after entry of
the order of sale, unless the court orders otherwise. Fed. R. Bankr. P. 6004(h). See Standard
12.30.
Source:
Citations in the Comment.
3 Collier on Bankruptcy, Chapters 342, 363 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

Standard 12.110. Authority To Convey Property After Confirmation Of Plan
If the debtor is selling land and the debtor' s bankruptcy plan has been confirmed, the
examiner should (1) review the confmned plan and order confirming plan to determine that the
land is revested in the debtor and to determine that the plan and order do not limit the authority of

54

the debtor to convey and (2) determine that the order is fmal and nonappealable. The examiner
should require that a certified copy of the order confirming the plan be recorded in the real
property records.
Comment:
Except as provided in the plan or order the confirming plan, the confirmation of the plan vests
all property of the estate in the debtor. 11 U.S.C. §§ 1141 (b), 1227 (b), 1327 (b). A notice of
appeal must be filed with the clerk within 10 days of the date of the entry (on the docket) of the
order of confirmation. A timely motion to amend or make additional findings of fact, to alter or
amend the judgment, for a new trial, or for relief from a judgment because of mistakes,
inadvertence, excusable neglect, newly discovered evidence, or fraud, must be filed within 10
days of the entry of the order of confirmation; in the event of such motion, the time for appeal
runs from the entry of the order disposing of the motion. Fed. R. Bankr. P. 8002. An order
confmning a Chapter 9 (Municipality) or a Chapter 11 (Reorganization) plan is stayed until the
expiration of 10 days after the entry of the order, unless the court orders otherwise. Fed. R . Bankr.
P. 3020(e).
Caution:
If the sale involves substantially all of the assets of the debtor or nonexempt assets in a
Chapter 12 or 13 case, the sale may be viewed as a modification of the plan. A cautious examiner
may require an order authorizing the sale. Although an appeal from a confirmation order may be
moot if no stay is secured, based upon established case law, this doctrine may not be as clearly
reliable as the statutorily based mootness provisions of§§ 363 and 364. In re Seidler, 44 F.3d 945
(11th Cir.1995). The examiner also should be aware that there is an automatic stay for 10 days
after entry of the order confirming the plan, unless the court orders otherwise. Fed. R. Bankr. P.
3020(e).
Source:
Citations in the Comment.
8 Collier on Bankruptcy, Chapters 1141, 1227, 1327 (Matthew Bender 15th Ed. Revised
2005).
History :
Adopted, October 9, 1999.
Standard 12.120. Authority To Mortgage In Proposed Transaction
If property will be mortgaged by the bankruptcy trustee or debtor in possession, the examiner
should require evidence of the following : (1) notice of the proposed mortgage to interested
parties, including the debtor, all creditors and indenture trustees, by mail; (2) no objections to the
mortgage were made or the court by order overruled the objections and authorized the mortgage;
and (3) the mortgage is nonappealable or is not stayed pending appeal. The examiner should
require that a certified copy of the order be recorded in the real property records.

-

Comment:
The debtor in possession, or the trustee if the trustee is authorized to operate the business,
may, after notice and a hearing, be authorized by the bankruptcy court to incur debt secured by a
lien on the land. 11 U.S. C. § 364 (c). The reversal or modification on appeal of the authorization
does not affect the priority or lien granted to an entity that extended the credit in good faith,
unless the authority was stayed pending appeal. 11 U.S. C. § 364(e).
Caution:
If the loan has not been fully disbursed, the appeal may not be moot due to failure to obtain a
stay. In re Swedeland Develop. Group, Inc., 16 F.3d 552 (3d Cir.l994). The cautious examiner
may require proof that the order is final and nonappealable. Unless the order provides otherwise,

55

the grant of a mortgage may remain subject to the automatic stay until later lifted. Gibraltar
Savings v. Commonwealth Land Title Insurance Co., 905 F .2d 1203 (8th Cir. l990).
Source:
Citations in the Comment.
3 Collier on Bankruptcy,~ 364.01 , et seq. (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.
Standard 12.130. Filings In Violation Of The Automatic Stay
The examiner should not disregard a judgment lien, tax lien notice, or other instrument filed'
after the commencement of a bankruptcy case and in apparent violation of the automatic stay,
because the filing of the instrument may be treated as voidable and may not be considered void,
absent action in the bankruptcy case to avoid the instrument.
Comment:
The automatic stay prevents any act to create or perfect any lien against property of the estate
or any act to create or perfect against property of the debtor any lien to the extent the claim arose
prior to the commencement of the case. 11 U .S.C. § 362 (a)(4), (a)(5). However, there are
different opinions as to whether the violation of a stay is automatically void or is simply voidable.
Bronson v. U .S., 46 F.3d 1573 (Fed.Cir.1995); In re Soares, 107 F.3d 969 (1st Cir. 1997).
Source:
Citations in the Comment.
3 Collier on Bankruptcy,~ 362.11 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.
Standard 12.140. The Discharge And Judgment Liens
An examiner may assume that an abstract of judgment filed against a person who was a
debtor in a bankruptcy case is extinguished as a lien against property of the debtor if: (1) the
debtor files a motion in the bankruptcy case pursuant to 11 U .S.C. § 522(f) to extinguish the lien
as to homestead, notifies the creditor in accordance with the applicable Bankruptcy Rules and
local rules, and secures a final order of the bankruptcy court removing the lien; (2) the debtor
acquires the property after receiving a discharge from the debt evidenced by the abstract of
j udgment; or, (3) the property is exempt or is not abandoned in the bankruptcy proceeding, and
the debtor receives a discharge from the debt.
Comment:
A proceeding under 11 U.S .C.A. § 522(f) by the debtor to avoid a judicial lien must be
treated as a contested matter, and notice must be served in accordance with Fed. R . Bankr. P.
7004. Fed. R. Bankr. P . 4003(d), 9014. An order will not be final until 30 days after the entry of
the order (or after a timely motion to amend, or alter a judgment, or for mistake or fraud) . Fed. R .
Bankr. P. 8002(c)(2). A dismissal of the bankruptcy case will reinstate a judgment lien, unless the
court orders otherwise. 11 U.S. C. § 349. The judgment lien may not be extinguished pursuant to
11 U .S.C. § 522(f) if the lien secures a domestic support obligation. 11 U .S.C.A. §§ 101(14A),
522(f)(l )(A). If the judgment debtor receives a discharge from the debt of the judgment, property
acquired by the debtor after the bankruptcy discharge will not be encumbered by the abstract of
judgment. In re Fuller, 134 B .R . 945 (Bankr. 9th Cir.l992) (relating to tax lien); Tex. Prop. Code
Ann. §§ 52 .025, 52.042. A judgment lien (evidencing a discharged debt) will not attach to
property acquired after the petition for debtor relief is filed. Tex. Prop. Code Ann. § 52.042. A

56

....

judgment lien is automatically released if the debt is discharged and the land is exempt or is
otherwise not abandoned. The examiner should review the bankruptcy docket and abstract of
judgment to verify that the debt was discharged, and should review the docket and Schedule ''A''
to verify that the property was scheduled, and was exempt or otherwise was not abandoned.
Source:
Citations in the Comment.
History:
Adopted, October 9, 1999; amended, June 16, 2006; amended, June 27, 2008 . The amended
June 16, 2006 standard provided: "An examiner may assume that an abstract of judgment
filed against a person who was a debtor in a bankruptcy case is extinguished as a lien
against property ofthe debtor if: (1) the debtor files a motion in the bankruptcy case
pursuant to 11 U.S. C. § 522(f) to extinguish the lien as to homestead, notifies the creditor
in accordance with the applicable Bankruptcy Rules and local rules, and secures a final
order of the bankruptcy court removing the lien; (2) the debtor acquires the property after
receiving a discharge from the debt evidenced by the abstract of judgment; or, (3) the
property is exempt or is not abandoned in the bankruptcy proceeding, and the debtor
receives a discharge from the debt."
The original standard provided: "An examiner may assume that an abstract of judgment filed
against a person who was a debtor in a bankruptcy case is extinguished as a lien against property
of the debtor if: (1) the debtor files a motion in the bankruptcy case pursuant to ll U.S.C. §
522(f) to extinguish the lien as to homestead, notifies the creditor in accordance with the
applicable Bankruptcy Rules and local rules, and secures a fmal order of the bankruptcy court
removing the lien; (2) the debtor acquires the property after receiving a discharge from the debt
evidenced by the abstract of judgment; (3) the abstract of judgment is recorded before September
1, 1993, and the property is exempt or is not abandoned in the bankruptcy case, and the debt is
discharged, and the court which granted the judgment reflected by the abstract of judgment
removes the judgment lien by court order more than one year after the bankruptcy discharge is
granted, and a copy of the order is recorded; or, (4) the abstract of judgment is recorded on or
after September 1, 1993, and the property is exempt or is not abandoned in the bankruptcy
proceeding, and the debtor receives a discharge from the debt."
Standard 12.150. Extension Of Time
An examiner should be aware that the filing of the bankruptcy case tolls the limitation period
in which the trustee may commence an action, if the limitation period had not expired at the time
of the filing of the case, until the later of (1) the end of the period under other law or (2) two years
after the order for relief (filing of voluntary bankruptcy). The flling of the bankruptcy case tolls
the period in which the trustee may file a pleading or cure a default until the later of (a) the end of
the period under other law or (2) 60 days after the order for relief. If applicable nonbankruptcy
law or an agreement fixes a period for commencing an action on a claim against the debtor, then
the limitation period does not expire until the later of ( 1) the end of the period under other law or
(2) 30 days after the notice of termination or expiration of the stay as to the claim.
Comment:
The Bankruptcy Code tolls the time for enforcement of contracts, options, deeds of trust,
mechanic' s liens and other claims by or against the debtor and debtor's property if they have not
expired at the time of the filing of the bankruptcy case. 11 U.S. C. § 108.
Caution:
Some cases indicate that the provisions requiring delay rentals or production will not be
tolled by the automatic stay (or otherwise), because of the filing of a bankruptcy by a lessee.

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57

Champlin Petroleum Co. v. Mingo Oil Producers, 628 F.Supp. 557 (D.Wyo.l986), aff'd without
op., Champlin Petroleum Co. v. Mingo Oil Producers, 841 F.2d 1131 (lOth Cir.l987); Good
Hope Refineries, Inc. v. Benavides, 602 F.2d 998 (1st Cir.l979) (rejecting the argument that §
108 extended time for performance).
Source:
Citations in the Comment.
2 Collier on Bankruptcy, Chapter 108 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

Standard 12.160. Effect Of Dismissal Of Case
The examiner should be aware that the dismissal of a bankruptcy case reinstates any transfer
or lien avoided in the bankruptcy, vacates orders, and revests the property of the estate in the
debtor.
Comment:
The dismissal of the bankruptcy case will revest title in the debtor and vacates orders entered
in the bankruptcy case. The goal is to undo the bankruptcy case and restore property rights as they
were vested before the case. 11 U.S.C. § 349. However, the bankruptcy court has discretion to
protect rights acquired in reliance on the case (such as the rights of a purchaser from the estate).
Source:
Citations in the Comment.
3 Collier on Bankruptcy, Chapter 349 (Matthew Bender 15th Ed. Revised 2005).
History:
Adopted, October 9, 1999.

CHAPTER XIII
AFFIDAVITS AND RECITALS
Standard 13.10. Affidavit Defined
An affidavit is a written statement, under oath, signed by the affiant and evidenced by a jurat.
Comment:
A jurat is a certificate signed by an officer authorized to administer oaths before whom an
instrument was executed, stating that the instrument was subscribed and sworn to before the
officer by the person executing the instrument. Au affidavit must contain a jurat to be effective. A
form of a jurat is as follows:
Subscribed and sworn to this _ _ day of
, ~ by _ _.
Notary Public, State of Texas
My commission expires:
For a listing of officers who may administer oaths and supply a jurat, see Tex. Gov 't Code Ann.
§§ 602.002-602.005 .
In the past, it was typical for an affidavit to contain both a jurat and an acknowledgment. An
acknowledgment merely requires that the signing party acknowledge that he or she executed the
instrument. Prior to September 1, 1989, an acknowledgment was required in order for an affidavit
to be recorded. As of that date, an affidavit need only contain a jurat to be recorded.
The admissibility of affidavits in a court proceeding is governed by Tex. R. Evid. 803, 804
and Tex. Prob. Code Ann. §52. See also Albright v . Bouldin, 394 S.W.2d 681 (Tex. Civ. App.-

58

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Eastland 1965, writ refd) and Compton v. WWV Enterprises, 679 S.W.2d 668 (Tex. App.Eastland 1984, no writ).
See Standard 4.20 for a further discussion of the use of the jurat and acknowledgment and
Standard 11.70 concerning affidavits ofheirship.
Caution:
An instrument containing an acknowledgment, but not a jurat, is not an affidavit since the
facts stated therein are not sworn to by the affiant.
Source:
Citations in the Comment.
3A Aloysius A Leopold, Land Titles and Title Examination §§ 10.18, 10.19 (Texas Practice
3d ed. 2005).
Tex. Gov ' t Code Ann. §§ 312.011(1); 602.002-602.005.
Tex. Prop. Code Ann. § 12.00l(a).
Tex. Prob. Code Ann. § 137.
2 Tex. Jur. 3d Mfidavits §§ 1-30 (1995).
History:
Adopted, June 15,2001.
Standard 13.20. Reliance Upon Affidavits

An examiner may rely upon an affidavit unless the examiner has a reasonable basis to
question its reliability.

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-

Comment:
Unlike the other standards, there is little authority for the use of affidavits. Nevertheless, the
employment of affidavits in determining title to real property is based upon long established
custom and practice.
During the course of title examination, an examiner may encounter many types of affidavits,
such as affidavits relating to heirship, family history, identity, marital status, use and possession
of property, adverse possession, payment of debts, non-production of oil and gas, lack of drilling
operations, and boundaries.
The examiner may fmd it necessary to rely upon affidavits in the interpretation of title
documents, clarification of title ownership, or establishment of title. In deciding whether to rely
upon an affidavit, the title examiner may consider relevant factors, such as:
(1) The date on which the affidavit was made and, if recorded, the length of time it has
been recorded;
(2) Whether the party or parties making the affidavit were interested or disinterested;
(3) The completeness of the affidavit, whether it recites facts or merely draws
conclusions, and whether it discloses the basis of the maker's knowledge;
(4) The value of the interest in the property under examination;
(5) Whether more reliable and readily obtainable proof is available; and
(6) The cost and feasibility of alternative procedures to establish title.
On many occasions, the examiner has no practical alternative but to rely upon an affidavit.
However, in relying upon an affidavit, an examiner does not become a guarantor of the truth of
the affidavit. An affidavit may qualify as an ancient document. See Comment to Standard 13.40.
Caution:
Title based upon an affidavit may not be marketable. See Standard 2.10 . An examiner should
be very hesitant to rely upon an affidavit in lieu of more reliable and readily obtainable proof,
such as a conveyance or the existing proceedings of a court of record.
Source:
Title Standards Joint Editorial Board.

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History:
Adopted, June 15, 2001.
Standard 13.30. Affidavits Of Non-Production

-

Concerning an instrument creating an interest that depends upon production (e.g., an oil and
gas lease, a mineral or royalty deed, or an assignment), an examiner may rely upon an affidavit
which includes facts sufficient to show that the interest has expired by its own terms, although it
is preferable to obtain a release from the owner of the interest.
Comment:
The affidavit of non-production is a curative device of necessity. The form and content of
these affidavits vary widely. Because it is often not feasible to obtain a release, the exan1iner may
rely upon an affidavit of non-production to show that a term interest has expired. The affidavit
should be carefully examined, however, to ascertain that the stated facts are sufficient to show
that the interest has expired by its own terms. See Comment to Standard 13.20.
Caution:
There is no statutory authority for this procedure; however, the use of the affidavit of nonproduction is a long established custom and practice. The affidavit itself does not terminate the
interest. The affidavit only contains facts that the examiner may consider in forming an opinion as
to the status of the term interest.
The examiner should carefully review the instrument creating the interest to determine
whether the term continues for reasons other than actual production (e.g., operations, payment of
shut-in royalties, pooling, force majeure, etc.).
Additionally, the examiner may suggest that the client consult the records of the Texas
Railroad Commission as another source of information regarding expiration of the interest;
however, such records are subject to amendment and may be self-serving since they are prepared
by, or at the direction of, the leasehold operator.
Source:
Title Standards Joint Editorial Board.
History:
Adopted, June 15, 2001.
Standard 13.40. Reliance Upon Recitals
Recitals are statements of fact made in deeds, leases, mortgages and other documents.
Because documents containing recitals are not typically sworn statements, recitals should
generally be regarded as having less probative force than affidavits; however, an examiner having
no reasonable basis for doubt or suspicion may rely upon recitals as establishing the recited facts .
Comment:
Recitals, as distinguished from affidavits, occur within deeds, mortgages, leases and other
instruments affecting real property. Compton v. WWV Enterprises, 679 S.W.2d 668 (Tex.
App.-Eastland 1984, no writ). Like affidavits, recitals encountered during the course of title
examination often remove doubt or explain apparent gaps in the chain of title. Recitals are not
sworn statements, however, and are often much less thorough than affidavits intended to establish
similar facts . They should therefore be appraised somewhat more critically than affidavits,
although the indicia of reliability the examiner should consider are much the same as those
mentioned for affidavits in the Comment to Standard 13.20. Reliance on a recital is particularly
warranted if it occurs in an ancient document (one in existence at least twenty years, in a
condition that arouses no suspicion, and in a place where it would likely be if authentic). See Tex.

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-

-

-

R . Evid. 803(16) & 901(b)(8). Recitals in an ancient document are prima facie evidence of the
facts recited. Zobel v. Slim, 576 S.W .2d 362,365 (Tex. 1978); Moses v . Chapman, 280 S.W. 911,
913-14 (Tex. Civ. App. -Texarkana 1926, no writ). A particularly useful application of the
"ancient document" rule is that it permits an examiner to presume the authority of a fiduciary,
such as an attorney-in-fact or a trustee, whose capacity is recited in the deed but does not
otherwise appear in the record. For example, in West v. Hapgood, 174 S.W .2d 963, 967- 71 (Tex.
1943), the court pointed out that, while not conclusive and subject to rebuttal, the power and
authority of a grantor in an ancient deed may be presumed from a bare recital. If an instrument
has been recorded for the requisite period, the record itself ordinarily will qualify as an ancient
document. See, e.g., Holmes v. Coryell, 58 Tex. 680, 688- 89 (1883). See also Wickes, Ancient
Documents and Hearsay, 8 Tex. L. Rev. 451 (1930) (discussing the necessity for such a rule and
its rationale).
If an instrument legally executed and acknowledged or sworn to has been of record for five
years or more in the county where the land is located or where the decedent resided at the time of
his death, the facts contained therein concerning the family history, genealogy, marital status, or
the identity of the heirs of a decedent are admissible in suits to declare heirship or involving title
to property as prima facie evidence of the stated facts . Tex. Prob. Code Ann. § 52. Such recitals,
if not controverted by other facts, will support a determination of heirship against any claimant,
whether or not in privity with a party to the deed. Gramm v. Coffield, 116 S.W .2d 1089 (Tex.
Civ. App.-Austin 1938, writ dism' d). See Standard 3.40 concerning recitals of identity.
Caution:
This standard is intended to recognize the examiner's latitude in accepting the truth of a
recital whose source appears to be reliable; nevertheless, some degree of subjective judgment is
required to appraise the likelihood that a person in the declarant's position would misstate the
pertinent facts , either from lack of knowledge or from self-interest. The value of recitals is
certainly tempered by the traditional rule that they are only binding on parties to the instrument
and their privies and are inadmissible as evidence against the claims of others . See, e.g., Watkins
v. Smith, 45 S.W . 560 (Tex. 1898). Although Tex R Evid. 803(15) may have relaxed this rule by
allowing the admission into evidence of any statement contained in a deed if the matter stated is
relevant to the purpose of the document, apparently without regard to privity, a prudent examiner
will not treat recitals, although admissible into evidence, as established facts against all the world
without sufficient indicia of their reliability. The examiner should also bear in mind that the
special legislative endorsement of reliance on recitals represented by Tex. Prob. Code Ann. § 52
is limited to matters of family history, genealogy, marital status and heirship.
Further, the existence and contents of necessary written documents may not rest on a mere
recital. For example, see Standards 8.10 and 8.20, regarding the necessity for examination of
powers of attorney, and the Caution to Standard 9.10, indicating that an examiner's assessment
of a trustee' s authority must be based on the provisions of the trust instrument or certification of
trust. It should go without saying that a recital of the existence of an essential deed should not
take the place of the deed itself. For example, a recital identifying a grantor as "John Smith,
successor by conveyance to the interest of William Jones" may not be accepted in lieu of the
recorded deed from Jones to Smith. Reliance on recitals is misplaced where any circumstances
appear to cast suspicion on their accuracy.
For example, recitals even in ancient documents should not be relied upon if they consist of
mere conclusions that are uncorroborated and self-serving, such as a grantor' s bare recital of
heirship in a deed. See, e.g., Slattery v. Adams, 279 S.W.2d 445 , 451-52 (Tex. Civ. App.Beaumont 1954), affd on other grounds, 295 S.W .2d 859 (Tex. 1956). And a grantor's power
will not be presumed where it emanates from a court whose proceedings are required by law to be
entered of record unless it is shown that the court records have been lost or destroyed.
Baumgarten v . Frost, 186 S.W .2d 982,985 (Tex. 1945).

61

Where the primary source of the grantor's recited authority is presumably readily available,
as from court records, the primary source must be examined. Jobe v. Osborne, 97 S.W.2d 939,
940 (Tex. 1936); Tucker v. Murphy, l S.W. 76 (fex. 1886). While recitals in ancient documents
are admissible as evidence of the facts recited, they are not conclusive proof. Bruni v . Vidaurri,
166 S.W.2d 81 , 90- 91 (Tex. 1942).
A purchaser is bound by every recital or reference to other documents contained in or fairly
disclosed by any instrument that forms an essential link in his chain of title. Westland Oil Dev.
Corp . v. Gulf Oil Corp., 637 S.W .2d 903, 908 (Tex. 1982). Therefore, no material recital can be
safely ignored.
Source:
Citations in the Comment.
4 Aloysius A. Leopold, Land Titles and Title Examination §§ 21.10, 21.10A (Texas Practice
3d ed. 2005); 5 Id. § 35.18.
History:
Adopted, June 15,2001.

CHAPTER XIV
MARITAL INTERESTS
Standard 14.10. Community Property Presumption
Except as otherwise provided in this Chapter, an examiner must presume that real property
acquired during marriage is community property, whether acquired in the name of one or both
spouses.
Comment:
Tex. Fam. Code Ann . § 3.002 defmes community property as all property, other than separate
property, acquired by either spouse during marriage. This definition applies regardless of whether
the marriage is ceremonial or at common law. See In re Glasco, 619 S.W.2d 567, 571 (Tex. Civ.
App.-San Antonio 1981, no writ). (Since the constitutional amendment of 1999, effective
January 1, 2000, community property may also include property converted from separate property
by the spouses' agreement. Tex. Fam. Code Ann. §§ 4.202--4.206.) Under Tex. Fam. Code Ann.§
3.001, separate property consists only of that acquired before marriage and that acquired during
marriage by gift, devise or descent or as recovery for personal injuries. The character of property
as separate or community is determined and becomes fixed at the time of acquisition. Smith v.
Buss, 144 S.W.2d 529, 532 (Tex. 1940); Welder v. Lambert, 44 S.W. 281 (Tex. 1898). It is not
changed from one to the other by subsequent events; for example, use of community funds to pay
installments on the purchase price for property acquired by one spouse before marriage does not
vest a community property interest in the other spouse. Colden v. Alexander, 171 S.W.2d 328
(Tex. 1943).
The community property presumption has long been a settled rule of property in Texas, see,
e.g., Stiles v. Japhet, 19 S.W . 450 (Tex. 1892), and is codified as Tex. Fam. Code Ann. § 3.003 .
The presumption is rebuttable by clear and convincing evidence that the property is separate
property. Tex. Fam. Code Ann. § 3 .003; e.g., Janes v. Gulf Production Co., 15 S.W.2d 1102 (Tex.
Civ. App. -Beaumont 1929, writ refd). It is conclusive, however, in favor of purchasers for
value without notice. Houston Oil Co. v. Choate, 232 S.W. 285, 287 (Tex. Comm 'n App. 1921,
judgm 't adopted). For further reference and guidance concerning the community property
presumption, see the comments and citations in John J. Sampson, Harry L. Tindall, et al.,
Sampson & Tindall' s Texas Family Code Annotated§§ 3.002-3.003 (2001).
See Standards 14.20, 14.30, 14.40 and 14.50, which describe circumstances in which an
examiner may instead presume property acquired by conveyance to be separate property.

62

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-

Source:
Citations in the Comment.
History:
Adopted, June 15, 2001.
Standard 14.20. Gifts, Devise And Descent
An examiner must consider property acquired during marriage by gift, devise or descent to be
the acquiring spouse ' s separate property. Where the grantor' s donative intent is clearly
demonstrated on the face of the deed, an examiner may presume the property conveyed to be the
grantee' s separate property.

-

Comment:
Property acquired during marriage by gift, devise or descent is separate property. Tex. Fam.
Code Ann. § 3.001(2). If the deed to a married person states that the conveyance is being made as
a gift or otherwise clearly expresses donative intent, such as by stating the consideration to be
love and affection, such a statement may be relied upon as establishing the separate character of
the property conveyed. Janes v. Gulf Production Co., 15 S.W.2d 1102 (Tex. Civ. App. Beaumont 1929, writ ref d). Even where the gift is made to both husband and wife, it vests onehalf in each of them, as separate property and not community. Bradley v. Love, 60 Tex. 472,
477-78 (1883); McLemore v . McLemore, 641 S.W.2d 395, 397 (Tex. App.-Tyler 1982, no
writ).
One occasionally encounters deeds recited to be for love and affection and a nominal sum
paid or " other good and valuable consideration." Where a deed recites love and affection as
consideration or otherwise clearly demonstrates on its face donative intent, an examiner should
accept these expressions as ample evidence that the property conveyed was a gift and therefore
the grantee's separate property, notwithstanding further recitals of nominal or unspecified other
consideration. Hall v. Barrett, 126 S.W .2d 1045 (Tex. Civ. App.-FortWorth 1939, no writ); see
also Banks v. Banks, 229 S.W.2d 99 (Tex. Civ. App.- Austin 1950, writ refd n.r.e.); Williams
v. Nettles, 56 S.W .2d 321 (Tex. Civ. App.- Waco 1932, writ dism ' d).
Caution:
The community property presumption can be overcome by a showing that no consideration
actually was paid. See, e.g., Lowe v . Ragland, 297 S.W .2d 668 (Tex. 1957). In such cases an
examiner may rely on an affidavit or other extrinsic evidence to show that no valuable
consideration changed hands in the transaction. See Chapter XIII of these standards concerning
the use of and reliance upon affidavits generally.
Conversely, the presumption of a gift that may arise from recitals in a deed may be overcome
by contrary evidence as well. See Hall v. Barrett, 126 S.W.2d 1045 (Tex. Civ. App.-Fort Worth
1939, no writ); see also Somer v. Bogart, 749 S.W .2d 202 (fex. App. -Dallas 1988, writ denied)
(presumption of gift resulting from parents' placing title in son-in-law's name was rebuttable).
Source:
Citations in the Comment.
History:
Adopted, June 15, 2001.

-

Standard 14.30. Conveyances Between Spouses

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63

An examiner must consider property conveyed by one spouse to another to have become the
grantee's separate property regardless of whether consideration is recited. However, effective

January 1, 2000, a conveyance or agreement signed by both spouses may convert separate
property to community property if such intention is specified.
Comment:
Texas courts have always held that a deed from husband to wife, absent evidence of any
contrary intention, vests the estate in the wife as her separate property. See, e.g., Taylor v.
Hollingsworth, 176 S.W .2d 733 , 736 (Tex. 1943); Story v. Marshall, 24 Tex. 306 (1859). This is
true whether the property is the husband' s separate property or community property, and whether
or not consideration is given. Dalton v. Pruett, 483 S.W.2d 926, 928- 29 (Tex. Civ. App. Texarkana 1972, no writ). Although the principal cases deal with conveyances from husband to
wife, there seems no reason that the same law would not be applied to deeds from wife to
husband after the statutory equalization of the rights of spouses with respect to marital property .
See In reMarriage of Morrison, 913 S.W.2d 689 (Tex. App.- Texarkana 1995, writ denied).
Tex. Const. Ann. art. XVI, § 15, effective January 1, 2000, now permits the conversion of
separate property to community property by the spouses' agreement. However, the mere transfer
of separate property by one spouse to the other spouse or to both spouses is not sufficient to
accomplish the conversion. Tex. Fam. Code Ann. § 4.203(b). A conveyance signed by both
spouses clearly stating their intention may be relied upon.
Caution:
Prior to its repeal, effective August 23, 1963, Tex. Rev. Civ. Stat. Ann. art. 1299 (1925)
(repealed by Acts 1963, 58th Leg., p. 1189, ch. 473, § 1) required the joinder of the husband in
any conveyance of his wife' s separate property, as well as her privy acknowledgment. See
Caution to Standard 4.20. Further, before January 1, 1968, the husband was statutorily the sole
manager of the community estate. Tex. Rev. Civ. Stat. Aim. art. 4619 (1925) (amended 1967,
repealed 1969). Before either of these changes in the law, therefore, a wife could not convey her
separate property or her community property interest directly to her husband. See, e.g., Graham v.
Struwe, 13 S.W. 381 (Tex. 1890). However, a conveyance by wife to husband could be
accomplished, if desired, by conveyance from husband and wife to a nominee, who would then
convey to the husband. Kellett v. Trice, 66 S.W. 51 (Tex. 1902). Although Article 1299 was held
unconstitutional in Wessely Energy Co. v. Jennings, 736 S.W.2d 624 (Tex. 1987), on the basis of
its disparate treatment of husbands and wives, the ruling was prospective only. 736 S.W.2d at
629. Thus, an examiner may not presume that a pre-repeal deed from wife to husband can be
given effect.
Source:
Citations in the Comment.
History:
Adopted, June 15, 2001.
Standard 14.40. Separate Property Consideration
If an examiner determines that the consideration for a conveyance came from a married
grantee's separate estate, the community property presumption is rebutted, and the examiner
should consider the property to be the grantee's separate property. For example, an examiner
without knowledge of contrary evidence may rely on a recital in the deed (I) that the
consideration was paid out of the grantee's separate property, or (2) that the property is conveyed
to the grantee as separate property.

Comment:
All property acquired during marriage for consideration is presumed to be community
property, and this presumption is conclusive in the absence of contrary evidence. Lockhart v.
Garner, 298 S.W.2d 108, 110 (Tex. 1957). The presumption obtains even wbere the parties are

64

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closely related so that a gift otherwise might be inferred. See, e.g., Kitchens v. Kitchens, 372
S.W.2d 249, 255 (Tex. Civ. App.-Waco 1963, writ dism' d). The presumption is overcome,
however, by proof that the property was acquired with one spouse's separate funds or separate
credit. See, e.g., Huston v. Curl, 8 Tex. 239, 242 (1852); Whorrall v. Whorrall, 691 S.W.2d 32,
35 (Tex. App.-Austin 1985, writ dism'd); Coggin v. Coggin, 204 S.W.2d 47, 51-52 (Tex. Civ.
App. -Amarillo 1947, no writ). Property purchased with one spouse's separate property is itself
separate property (a concept commonly called " mutation"). Lewis v. Lewis, 944 S.W.2d 630
(Tex. 1997); Love v. Robertson, 7 Tex. 6 (1851).
Property may be partly separate and partly community in character, in a kind of tenancy in
common between the two estates, if acquired partly with one spouse's separate funds and partly
with community funds or credit. Gleich v. Bongio, 99 S.W.2d 881 (Tex. 1937). Under such
circumstances the interest of each estate is established proportionately to the fractional share of
the purchase consideration furnished out of each. 99 S.W.2d at 884.
Many cases have held that recitals in a deed that the consideration was paid out of the
grantee's separate property or that the conveyance is to the grantee as his or her separate property
displace the usual community property presumption and establish in its place a contrary
presumption that the property is the grantee's separate property. See, e.g., HenryS. Miller Co. v.
Evans, 452 S.W.2d 426 (Tex. 1970); Smith v. Buss, 144 S.W.2d 529 (Tex. 1940); McCutchen v.
Purinton, 19 S.W. 710 (Tex. 1892). Even if only community funds were in fact used in the
purchase, a spouse who participated in the transaction is deemed to have intended a gift to the
grantee. Hodge v. Ellis, 277 S.W.2d 900, 905 (Tex. 1955). Accordingly, an innocent purchaser
for value relying on such a separate property recital would take free of the claim of one asserting
a community property interest in the other spouse. See generally 4 Aloysius A. Leopold, Land
_Titles and Title Examination § 20.6 (Texas Practice 3d ed. 2005) and 5 Id. §§ 28.4, 28 .8, 33.22.
Caution:
The presumption that arises from separate property recitals is rebuttable. If a spouse can show
no participation in or knowledge of the transaction, that spouse will be allowed to show that the
consideration was not the grantee's separate property and that no gift to the grantee was intended,
so that the property is community property . Hodge v. Ellis, 277 S.W.2d 900, 905- 07 (Tex. 1955);
Kearse v. Kearse, 276 S.W. 690 (Tex. Comm 'n App. 1925,judgm 't adopted); Morris v. Neie, 212
S.W.2d 981 (Tex. Civ. App.-Eastland 1948, writ ref'd n.r.e.). The examiner should be watchful
for any evidence that might be construed to place a purchaser on notice of the unreliability of
separate property recitals. The separate property presumption arising from deed recitals seems
particularly vulnerable given that it has been applied almost exclusively for the benefit of wives
and was developed during an era in which courts felt justified in providing special protection to
wives (as indicated, for example, by the court's remarks in McCutchen v. Purinton, 19 S.W. 710,
711 (Tex. 1892), noting the husband' s authority over the wife's property, both separate and
community). The Constitution and statutes, of course (not to mention political and cultural
reality), no longer allow courts to indulge in the protection of wives while not affording similar
protection to husbands.
Source:
Citations in the Comment.
History:
Adopted, June 15,2001.

Standard 14.50. Community Property Presumption May Be Rebutted By Showing Of
Domicile In Common Law Jurisdiction
An examiner may consider the community property presumption to be rebutted if it is shown
the acquiring spouse was domiciled in a common law jurisdiction at the time of acquisition and if
there is no indication that community funds or credit were used in the purchase.

65

Comment:
Under the common law as generally applied in non-community property states, a spouse's
funds are his or her separate estate. See Oliver v. Robertson, 41 Tex. 422, 425 (1874). It follows
that if money earned in a common law state, being separate property, is paid for Texas real
property, the real property takes on the same separate character. Huston v. Colonial Trust Co.,
266 S.W.2d 231, 233 (Tex. Civ. App.-El Paso 1954, writ refd n.r.e.). Citing that case and
others, the court in Orr v. Pope, 400 S.W.2d 614, 616-17 (Tex. Civ. App.-Amarillo 1966, no
writ), declared it to be the law of this state that where a spouse acquires Texas real property while
residing in a common law state, the real property is separate property.
Community property laws now prevail in Texas, Louisiana, New Mexico, Arizona,
California, Washington, Idaho and Nevada, as well as in many foreign countries. 7 Richard R.
Powell & Patrick J. Rohan, Powell on Real Property § 53.01(3), at 53-6 (1997). Wisconsin's
Uniform Marital Property Act, enacted in 1983, establishes a system analogous to community
property. Id. at 53-7. The Alaska Community Property Act, Alaska Stat.§§ 34.77.010-34.77.995,
in 1998 established a community property system applicable only to spouses who have chosen it
by written agreement. The examiner may not apply a separate property presumption on the basis
of residency outside Texas if it appears the owner was domiciled in another community property
jurisdiction.
Caution:
This standard should be applied narrowly and cautiously. The fact of domicile in a common
law jurisdiction should be clear, and the separate character of property should not be presumed if
there are any indications that community property consideration could have been paid, such as
past residence in Texas or another community property state. The examiner may apply the
standard more liberally as time passes without any apparent spousal claim.
Establishment of the fact of the grantee's domicile to a sufficient certainty will often require
inquiry outside the record. The laws of any jurisdiction are, of course, subject to change and
interpretation. Prudence may require verification that the common law has not been altered in the
foreign jurisdiction in question in a manner that might render the acquiring spouse's
consideration community property in the analysis of a Texas court. See Huston v. Colonial Trust
Co. , 266 S.W.2d 231 , 233-34 (Tex. Civ. App.-El Paso 1954, writ refd n.r.e.), in which the
court complains of being almost worn down with citation of Pennsylvania authorities in an
unsuccessful effort to convince it that the wife had some interest akin to community property.
During the 1940s several states, including Hawaii, Michigan, Nebraska, Oklahoma and Oregon,
enacted community property systems to take advantage of federal tax laws then effective. Those
states repealed their community property laws after legislation removed the tax advantages of
community property in 1948. 7 Richard R. Powell & Patrick J. Rohan, Powell on Real Property§
53.08(1), at 53- 108 (1997).
Tex. Fam. Code Ann. § 7.002 authorizes the court, in a decree of divorce or annulment, to
order a division of property acquired by either spouse while domiciled in another state that would
have been community property if the acquiring spouse had been domiciled in Texas. Although
Tex. Const. Ann. art. I, § 19 prohibits the divestiture of separate property acquired as such by a
Texas resident, Eggemeyer v. Eggemeyer, 554 S.W.2d 137 (Tex. 1977), the constitutionality of
the divorce court's authority over " quasicommunity" property under Family Code § 7.002 has
been upheld. Cameron v. Cameron, 641 S.W.2d 210 (Tex. 1982); Ismail v. Ismail, 702 S.W.2d
216 (Tex. App.-Houston [1st Dist.] 1985, writ refd n.r.e.). An examiner who is aware of a
divorce involving a person who acquired Texas real property for consideration while residing in a
common law jurisdiction should investigate the court's division of the property, if any, in the
same manner as for the spouses' community property. (Note, however, that § 7.002 only
empowers the court to order division of this kind of property in a decree of divorce or annulment.
If the spouses' divorce was granted outside Texas, it appears the statute has no application.)

66

-

Source:
Citations in the Comment.
History:
Adopted, June 15, 2001.

Standard 14.60. Necessity For Joinder When Community Property Is In Name Of Both
Spouses
If property is acquired during marriage by a deed naming both spouses as grantees, an
examiner may not give effect to a subsequent conveyance of the property unless (1) it is joined by
both spouses or (2) it was made by the husband before January 1, 1968, and did not convey
homestead property.
Comment:
Community property not subject to the sole management of one of the spouses is subject to
their joint management, control and disposition. Tex. Fam. Code Ann. § 3.102(c). Tex. Faro.
Code Ann. § 3.104(a) establishes the presumption that property held in one spouse's name is
subject to his or her sole management, leaving property acquired in both spouses' names subject
to joint management. It seems to follow that if property is held in the names of both spouses, a
deed from one spouse alone is ineffective as to either the entire community interest or the
granting spouse's share, Dalton v. Don J. Jackson, Inc., 691 S.W .2d 765 (fex. App.-Austin
1985, no writ), except where it is from one spouse to the other. In reMarriage of Morrison, 913
S.W.2d 689 (Tex. App.-Texarkana 1995, writ denied). Although there is authority that a
conveyance by one of the spouses may be given effect as to that spouse's half of the property,
Williams v. Portland State Bank, 514 S.W.2d 124 (fex. Civ. App.-Beaumont 1974, writ
dism'd); see Vallone v. Miller, 663 S.W .2d 97, 98 (Tex. App. -Houston [14th Dist.] 1983, writ
ref'd n.r.e.), the Dalton court points out that this would, in effect, permit one spouse unilaterally
to partition joint management community property. Since community property may only be
partitioned upon strict compliance with Tex. Const. Ann. art. XVI, § 15, one spouse' s purported
conveyance of only his or her interest must be considered ineffective. 691 S.W.2d at 768.
Before January 1, 1968, the Texas statutes vested the management of the entire community
estate in the husband. Tex. Rev. Civ. Stat. Ann. art. 4619 (1925) (amended 1967, repealed 1969).
During the period of the husband's management, a deed from him alone was considered sufficient
to convey the community' s interest in all property except homestead, regardless of how legal title
was held.
There are unusual circumstances under which property subject to joint management may be
conveyed by one spouse alone. Tex. Fam. Code Ann. §§ 3.301 and 3.302 expressly authorize the
remaining spouse to petition the court for sole management if the other spouse has disappeared,
has permanently abandoned the petitioning spouse, or the spouses are permanently separated, and
case law supports the remaining spouse's authority to convey when the other has disappeared or
has become incapacitated or incarcerated. See, e.g., Reed v. Beheler, 198 S.W .2d 625, 628 (fex.
Civ. App. -Fort Worth 1946, no writ). When one spouse has been judicially declared
incapacitated, Tex. Prob. Code Ann. § 883 [HB 2502) gives sole management of the community
estate to the other spouse.

Caution:

-

If the examiner encounters a deed of joint management community property executed by only
one spouse, it may not be ignored as being invalid. The grantee may be able to argue, for
example, that the non-signing spouse consented to the conveyance. At the very least, such a deed
casts a cloud on title that should be investigated.
Source:

67

Citations in the Comment.
History:
Adopted, June 15, 2001.
Standard 14.70. Necessity For Joinder When Community Property Is In Name Of Only One
Spouse
Subject to Standard 14.90, where community property has been acquired in the name of only
one spouse, an examiner may rely on the grantee' s authority to execute a subsequent conveyance
as grantor, without joinder of the other spouse; however, the examiner should not pass a
conveyance of community property held in the name of the wife made before January 1, 1968,
without the husband' s joinder or consent.
Comment:
During marriage each spouse has the sole management, control and disposition of the
community property that the spouse would have owned if single. Tex. Fam. Code Ann. §
3.102(a). (Exceptions involving unusual circumstances such as the permanent abandonment of
the petitioning spouse, permanent separation or disappearance of the managing spouse are
allowed, with court approval, by Tex. Fam. Code. Ann. §§ 3.301 and 3.302; and these kinds of
circumstances may validate a conveyance by the nonmanaging spouse regardless of judicial
action. See, e.g., Reed v. Beheler, 198 S.W.2d 625, 628 (Tex. Civ. App. -Fort Worth 1946, no
writ). To the same effect is Tex. Prob. Code Ann. § 883 regarding a spouse judicially declared to
be incapacitated.) Property is presumed subject to a spouse's sole management, control, and
disposition if it is held in that spouse's name, and a third party may rely on the presumption. Tex.
Fam. Code Ann. § 3.104. The sale of homestead, however, whether it consists of separate or
community property, generally requires the joinder of both spouses. Tex. Fam. Code Ann. §
5.001; see Standard 14.90.
Caution:
On termination of the marriage by death or divorce, the community having been dissolved,
the spouse in whose name community property was acquired no longer has any authority to
convey the other's community share, Burnham v. Hardy Oil Co., 195 S.W. 1139 (Tex. 1917),
except as may be authorized by the laws concerning community survivorship. See Standards
11.80 and 11.90. Therefore, if the record discloses the marriage 's dissolution or facts that would,
on inquiry, lead a prudent person to discover it, the examiner may not rely on the power of the
holder of legal title over the entire interest of the community. See, e. g., Myers v. Crenshaw, 116
S.W .2d 1125, 1130 (Tex. Civ. App. -Texarkana 1938), aff'd, 137 S.W .2d 7 (Tex. 1940).
The Texas statutes fonnerly vested the entire management of community property in the
husband. Tex. Rev. Civ. Stat. Ann. art. 4619 (1925) (amended 1967, repealed 1969). Before the
effective date of the amendment, January 1, 1968, therefore, the general rule expressed in this
standard would not apply to a conveyance of community property acquired in a married woman's
name. Such property could instead be conveyed only by the husband, or at least with his consent.
Lockhart v. Garner, 298 S.W.2d 108 (Tex. 1957). The constitutionality of the former statute may
be subject to challenge on the basis of its disparate treatment of husbands and wives. See Wessely
Energy Co. v. Jennings, 736 S.W.2d 624 (Tex. 1987), which held unconstitutional the longrepealed statute requiring the husband's joinder in his wife's conveyance of her separate property.
The ruling in Wessely Energy was prospective only, however, 736 S.W.2d at 629, and the
examiner should assume that the exception noted in this Caution still governs pre-1968
conveyances.
Source:
Citations in the Comment.
History:

68

Adopted, June 15, 2001.

Standard 14.80. No Presumption Of Marriage
Where the examiner is not aware that the grantor was married at the time of acquisition, the
examiner need not inquire into the possible existence of a spouse ' s community property interest.
The examiner should not infer that the grantor was married at the time of acquisition merely from
a recital that the grantor is a widow or a widower.

-

-

-

-

Comment:
A purchaser without actual knowledge or constructive notice that the grantor was married at
the time of acquisition will take free of any claim by the former spouse or the spouse's heirs or
devisees. Hill v. Moore, 62 Tex. 610 (1884); McClenny v. Humble Oil & Refining Co., 179
S.W.2d 798 (Tex. Civ. App.- Texarkana 1944, writ refd w.o.m.). For example, a purchaser
without notice of a former spouse's interest pursuant to a prior marriage will take free of it unless
a certified copy of the divorce decree or other evidence of the dissolution has been recorded in the
real property records of the county where the land is located. Benn v. Security Realty &
Development Co. , 54 S.W.2d 146, 150 (Tex. Civ. App.-Beaumont 1932, writ ref' d). Even if the
purchaser is put on notice that the grantor was formerly married and that the marriage has
terminated, for example by a recital that the grantor is a widow or widower, the purchaser will
still take free of claims under the spouse, as a bona fide purchaser for value, where the purchaser
has no knowledge that the grantor had a spouse living at the time the property was acquired.
Gilmer's Estate v. Veatch, 117 S.W. 430 (Tex. 1909); Griggs v. Houston Oil Co., 213 S.W. 261
(Tex. Comm'n App. 1919,judgm't adopted); Strong v. Strong, 66 S.W.2d 751 (Tex. Civ. App.Texarkana 1933), affd on other grounds, 98 S.W.2d 346 (Tex. 1936).

Caution:
If the record discloses that the grantor was married at the time of acquisition, or discloses
facts that would lead a prudent person to inquire and thereupon discover the marriage, a purchaser
will be subject to claims by or under the former spouse. For example, the court in Hill v. Moore,
19 S.W. 162 (Tex. 1892), held that where a Republic of Texas land grant, although in the name of
the husband only, was of a type available only to the head of a family, a purchaser was on notice
to inquire into the identity of the man' s family members and would have discovered that he had
been married at the time of the grant. In Myers v. Crenshaw, 116 S.W.2d 1125, 1130 (Tex. Civ.
App.- Texarkana 1938), affd, 137 S.W.2d 7 (Tex. 1940), the joinder of several of a deceased
wife's children with their father in the execution of a deed, where there was no question of the
reason for their joinder, was held to put a purchaser on notice of the wife's interest.
If the husband and wife (whether in a formal or common law marriage) actually occupy the
property and use it as a home, a purchaser is on notice of its probable homestead character. First
State Bank v. Zeanon, 169 S.W.2d 735, 739 (Tex. Civ. App.-Waco 1943, writ ref'd w.o.m.).
Accordingly, an examiner should, when appropriate, require inquiry into the possibility that the
property is homestead, which would require joinder of both husband and wife in any conveyance.
In case of any doubt, both spouses should be required to join in the conveyance. See Standard
14.90 regarding conveyances of homestead generally.
This standard is meant to apply to the examiner's consideration of a conveyance made by a
grantor who acquired title by deed, not necessarily by passage of title through a decedent's estate.
Because a purchaser of an interest that has passed through a decedent's estate is charged with
notice of the beneficiaries' identity, Sanburn v. Schuler, 23 S.W. 641 (Tex. 1893), an examiner
should consider the possibility that a community property or homestead interest may exist or have
existed in a surviving or predeceased spouse. An examiner considering a decedent's estate will
rarely, if ever, encounter circumstances in which available information reveals the identity of the
decedent's heirs or devisees with sufficient certainty but does not somehow disclose, or at least

69

lead to inquiry concerning, the decedent's marital status and history. See Ross v. Morrow, 19
S.W. 1090 (Tex. 1892).
Source:
Citations in the Comment.
History:
Adopted, June 15, 2001.

-

Standard 14.90. Homestead
If the property conveyed is or may be the homestead of married persons, whether community
property or separate property, an examiner must require the joinder of both spouses, unless it is
conclusively shown that the property is not, or is no longer, homestead.

Comment
Homestead is defmed by Tex. Const. Ann. art. XVI, § 51 as not more than 200 acres not in a
town or city, which may be one or more parcels, or not more than ten contiguous acres in a city,
town or village, including improvements. For a single person, a rural homestead is limited by
Tex. Prop. Code Ann. § 41.002(b)(2) to 100 acres. An urban homestead must be used for
purposes of a home, or as both a home and place of business, on one contiguous tract. Tex. Const.
Ann. art. XVI, § 51; Tex. Prop. Code Ann. § 41.002(a). The constitution makes no provision for
business use of a rural homestead, but the rural acreage need not all be contiguous to the tract
used as a home. Tex. Const. Ann. art. XVI, § 51; Tex. Prop. Code Ann. § 41.002(b); Riley v.
Riley, 972 S.W.2d 149 (Tex. App.-Texarkana 1998, no pet.). The establishment of a tract's
character as homestead requires physical occupancy, or at least overt acts of preparation, with the
intent to reside on the land as a home. Gilmore v. Dennison, 115 S.W.2d 902 (Tex. 1938); 39
Aloysius A Leopold, Marital Property and Homesteads § 25.3 (Texas Practice 1993). A
homestead claimant need not actually reside on the land for it to become impressed with
homestead character. See, e.g., Bartels v . Huff, 67 S.W.2d 411 (Tex. Civ. App. -San Antonio
1933, writ ref'd). Mere intent to reside on the land, however, without some overt act in
preparation for physical occupancy, is insufficient. Cheswick v. Freeman, 287 S.W.2d 171 (Tex.
1956). The homestead character extends to the unsevered minerals underlying the homestead, so
that, for example, both spouses must join in oil and gas leases. Gulf Production Co. v. Continental
Oil Co., 132 S.W.2d 553 (Tex. 1939). Because the requirement for occupancy as a home
necessarily implies surface ownership, however, no homestead character attaches to a severed
mineral interest in a tract where the owner holds no right to occupy the surface other than for
mineral development.
Whether the homestead is separate property of one spouse or community property, Tex. Fam.
Code Ann. § 5.001 provides that neither spouse may convey it, except under certain unusual
circumstances, without the other's joinder. The unusual circumstances, which now require
judicial authorization, are generally set out in Tex. Fam. Code Ann. §§ 5.002 (spouse's
incapacity) and 5.101 - 102 (spouse's disappearance or abandonment). The current statute carries
forward a policy long a feature of Texas law, embodied in Tex. Canst. Ann. art. XVI, § 50, and
formerly in Tex. Rev. Civ. Stat. Ann. art. 1300 (1925) (repealed 1967), requiring the joinder of
both spouses and formerly requiring adherence to strict requirements concerning the wife's
acknowledgment.
A tract's homestead character, however, does not make a conveyance of the land (other than a
mortgage or a deed of trust) by one spouse alone void. If the record title is in the name of the
executing spouse, such a deed is merely inoperative while the property remains the non-signing
spouse's homestead. Grissom v. Anderson, 79 S.W.2d 619, 621 (Tex. 1935); Zable v. Henry, 649
S.W .2d 136, 137 (Tex. App.- Dallas 1983, no writ). Obviously, factors such as the passage of

70

-

-

time should be taken into consideration in assessing whether it is necessary that inquiry be made
into whether a tract of land conveyed by one spouse alone was homestead.
Unlike a deed, a mortgage or deed of trust granting a lien on homestead property is absolutely
void unless joined by both spouses. Inge v. Cain, 65 Tex. 75 (1885). This is because the Texas
Constitution prov ides that no mortgage, trust deed, or other lien " shall ever be valid" except as
authorized thereby. Tex. Const. Ann. art. XVI, § 50(c). (Joinder by both spouses is only one of
many strict requirements and limitations the constitution places on the mortgaging of homestead.)
Thus, the failure of one of the spouses to join in a deed of trust or other mortgage is not cured
even though the property ceases to be homestead. Tolerv. Fertitta, 67 S.W.2d 229 (Tex. Comm'n
App. 1934, judgm't adopted). Nonetheless, a deed of trust or other mortgage to secure the
purchase money for property that is to be acquired by one spouse and is to become homestead
need only be executed by the acquiring spouse. Skelton v. Washington Mut. Bank, F.A., 61
S.W.3d 56 (Tex. App.-Amarillo 2001 , no pet.) (at least if the deed retains an express vendor's
lien); Minnehoma Financial Co. v. Ditto, 566 S.W.2d 354 (Tex. Civ. App.- Fort Worth 1978,
writ ref'd n.r.e.); see Farmer v. Simpson, 6 Tex. 303, 310 (1851).
For a discussion of judgment liens clouding homesteads, see Standard 15.30. For discussion
of trusts that include homestead property, see Caution to Standard 9.1 0.
Caution:
The examiner should always begin with the assumption that a tract of land that includes
surface ownership is homestead and, before relying on a conveyance by one spouse alone, require
a definite showing that it is not. An examiner should exercise a great deal of care in relying on
extrinsic evidence to confirm that the property is not homestead. A purchaser or lender may be
charged with the fact that a tract is homestead if it is occupied by the owner as a home, Texas
Land & Loan Co. v. Blalock, 13 S.W. l2 (Tex. 1890); Gibraltar Savings & Building Ass' n v.
Harper, 41 S.W. 2d 130 (Tex. Civ. App.-Austin 1931, writ ref' d); and the public records seldom
reveal sufficiently definite and complete evidence of a tract's homestead character. In case of any
reasonable doubt, an affidavit of the owners designating other property as homestead and stating
that the property to be conveyed or encumbered is not homestead is now conclusive in favor of a
purchaser or lender without contrary knowledge and should be required. Tex. Const. Ann. art.
XVI, § 50. If any question remains after investigation, an examiner should require that both
spouses join in the conveyance. Where the property is separate property of one of the spouses or
is community property held in the name of only one of them, the other spouse may be recited to
be joining ''pro forma.'' Because a spouse may have homestead rights arising from a common
law marriage the same as from a formal one, a cautious examiner might consider requiring
joinder of a man and woman who occupy the same residence conclusive evidence of whether they
are husband and wife. Of course, both spouses' joinder in a deed may also be required for
property that is clearly not homestead. See Standard 14.60.
Source:
Citations in the Comment.
History:
Adopted, June 15,2001.
Standard 14.100. Divorce Or Annulment

Absent a conveyance or agreement between the parties providing otherwise or a judicial
decree imposing an equitable lien, the examiner must treat the separate property of each spouse as
unaffected by a divorce or annulment. The examiner must examine the judgment of dissolution
and any accompanying property settlement agreement for their effect on community property.
Community property not divided by the court or by the spouses is owned equally by the former
spouses as tenants in common.

-

71

Comment:
In a decree of divorce or annulment, the court divides the marital estate in a manner it deems
just and right, having due regard for the rights of each party and any children of the marriage.
Tex. Fam. Code Ann. § 7.001. The division need not be equal, Williams v. Williams, 325 S.W.2d
682 (Tex. 1959), and the court may even award all of the community property to just one of the
spouses. Reardon v. Reardon, 359 S.W.2d 329 (Tex. 1962). The court may incorporate the
parties' agreement for division of their property in its decree. Tex. Fam. Code Ann.§ 7.006. The
court is not empowered, however, to divest one spouse of his or her separate real property and
award it to the other, Eggemeyer v. Eggemeyer, 554 S.W.2d 137 (Tex. 1977); however, a court
may impose an equitable lien to secure reimbursement for improvements made with community
funds. Heggen v. Pemelton, 836 S.W.2d 145, 146 (Tex. 1992). Subject to homestead restrictions,
an equitable lien may be imposed by a court on property of a marital estate to secure a claim for
economic contribution by another marital estate. Tex. Fam. Code Ann. § 3.406. If the court and
the parties fail to make a division of their community property, the former spouses become equal
tenants in common, the same as if they had never been married. Kirkwood v. Domnau, 16 S.W.
428 (Tex. 1891).
Following a divorce or annulment affecting community property, it is important that a
certified copy of the divorce decree, as well as any property settlement agreement that it
incorporates, or a conveyance between the spouses be recorded in the real property records of the
county where the property is located; otherwise there is no constructive notice of the new status
of the spouses and their property. Myers v. Crenshaw, 116 S.W.2d 1125, 1131 (Tex. Civ. App.Texarkana 1938), aff'd, 137 S.W.2d 7 (Tex. 1940); Benn v. Security Realty & Development Co.,
54 S.W.2d 146, 150 (Tex. Civ. App. -Beaumont 1932, writ ref'd); Prewitt v. United States, 792
F.2d 1353 (5th Cir. 1986).
The court's division of community property amounts to a partition, and its judgment vests
title to the real property in the spouse to whom it is awarded. Hailey v. Hailey, 331 S.W.2d 299
(Tex. 1960). A certified copy of the divorce decree may be recorded in the real property records
of the county where the land is located, Tex. Prop. Code Ann. § 12.013. So long as the decree
adequately describes the property in question, either in specific terms or generally (e.g., " all real
property held in the name of Wife" ), and is clear in its intent to vest the title in the spouse to
whom it is awarded, such recordation, without a conveyance from the other spouse or other
formality, is sufficient to evidence record title in the spouse to whom the tract has been allotted.
See Brinkley v. Brinkley, 381 S.W.2d 725 (Tex. Civ. App.-Houston 1964, no writ).
Caution:
The courts of one state have no jurisdiction to divide marital real property in another state.
See Fall v. Eastin, 215 U.S. 1 (1909); McElreath v. McElreath, 345 S.W.2d 722 (Tex. 1961);
Morris v. Hand, 8 S.W. 210 (Tex. 1888); Keith v. Keith, 763 S.W.2d 950,954 (Tex. App. -Fort
Worth 1989, no writ). Thus, although presumptively effective to have dissolved the marriage, a
judgment of divorce or annulment from a jurisdiction other than Texas cannot be given effect to
the extent it purports to divide the spouses' real property in Texas. Unless a conveyance or other
self-executing agreement between the spouses provides for a different division, community
property of spouses divorcing outside Texas must be considered to be owned by each of them
equally after the divorce.
Source:
Citations in the Comment.
History:
Adopted, June 15, 2001.

CHAPTER XV
LIENS AND LIS PENDENS

72

-

....

-

Standard 15.10. Liens Generally

An examiner should identify all liens, both contractual and statutory, relevant to the interests
under examination and advise the client regarding any actions that are appropriate to the purpose
of the examination. An examiner need not identify a lien that is barred by limitations or is
otherwise unenforceable.

.....

-

.....

.....

-

-

Comment:
Determining the significance of a lien or encumbrance and drafting appropriate requirements
for a particular situation requires careful and skillful analysis by the examiner. The examiner
ordinarily disclaims coverage of liens that might not appear of record or ripen until after the
closing date of the opinion (such as involuntary mechanics' and materialmen' s liens); however, if
the purpose of the examination is to determine the validity and priority of liens, an examiner
should caution the client about the possible existence of unrecorded liens.
Mortgage or Deed of Trust: A mortgage or deed of trust is an interest in real property
providing security for the performance of an obligation, usually evidenced by a note. On default,
the mortgage or deed of trust may be foreclosed, the property may be sold, and the proceeds
applied for the mortgagee's benefit. While a mortgage is a two-party instrument between a
mortgagor and mortgagee, a deed of trust is a conveyance to a trustee for the benefit of the
mortgagee and, in Texas, gives the trustee the power of nonjudicial foreclosure and sale. Johnson
v. Snell, 504 S.W.2d 397, 399 (Tex. 1973). The general practice in Texas is to use a deed of trust;
however, lenders and attorneys commonly use the terms " mortgage" and " deed of trust"
interchangeably. The secured creditor w1der a deed of trust is often identified as the
" beneficiary" or "mortgagee," the debtor is often identified as the " borrower," " grantor," or
" mortgagor," and the party having the power of nonjudicial foreclosure and sale in the event of
default is identified as the " trustee."
Mortgaged Property: Absent some statutory or other legal inhibition, any alienable interest in
real property may be mortgaged. Cadle Co. v. Caamano, 930 S.W.2d 917, 920 (Tex. App.Houston [14th Dist.] 1996, no writ). Appurtenances are rights and interests in related real property
that are essential to the full enjoyment of the subject property. A security interest in real property
automatically extends to appurtenances. Pine v. Gibraltar Savings Assoc., 519 S.W.2d 238, 242
(Tex. Civ. App.-Houston [1st Dist.] 1974, writ ref'd n.r.e.). Rights and interests in other property
that are useful but not essential for the full enjoyment of the described property are not considered
appurtenances. Thus, a security interest in the described property does not automatically extend to
those rights and interests. Balcar v. Lee County Cotton Oil Co., 193 S.W. 1094, 1095 (Tex. Civ.
App.-Austin 1917, no writ).
Lien Theory: Texas follows the " lien theory" of mortgages and deeds of trust, under which
the creditor or the trustee, despite granting language in the instrument, is not regarded as the
owner of the property securing the debt. Taylor v. Brennan, 621 S.W.2d 592, 593 (Tex. 1981);
NCNB Tex. Nat'l Bank v. Sterling Projects, Inc., 789 S.W.2d 358, 359 (Tex. App.-Dallas 1990,
writ dism'd w.o.j.). Legal title does not pass from the mortgagor, and the mortgagee receives only
a lien or equitable title. Flag-Redfem Oil Co. v. Humble Exploration Co., 744 S.W.2d 6, 8 (Tex.
1987); First Baptist Church v. Baptist Bible Seminary, 347 S.W.2d 587, 590-591 (Tex. 1961). A
mortgagee ordinarily has no right of possession. The mortgagor remains entitled to possession of
the land and is entitled to use the land without being accountable to the mortgagee, except for
waste. State v. First Interstate Bank, 880 S.W.2d 427, 429-430 (Tex. App.-Austin 1994, writ
denied); NCNB Tex. Nat'l Bank v. Sterling Projects, Inc., 789 S.W.2d 358, 359 (rex. App.Dallas 1990, writ dism'd w.o.j.).
Vendor's Lien: A vendor' s lien is a lien in favor of the seller of real property to secure
payment of the unpaid purchase price. The usual practice in Texas is to expressly reserve a
vendor's lien in the deed so that, when the deed is recorded, third parties will have notice of the

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lien. Even if the lien is not reserved in the deed, an express vendor's lien may be created by
acknowledging the lien in the purchase money note. Simms v. Espindola, 310 S.W.2d 364, 366
(fex. Civ. App.-San Antonio 1958, writ ref'd n.r.e.). An express vendor's lien makes the deed an
executory sales contract and gives the seller superior title to the real property until the purchase
price is paid. Under an express vendor's lien, the seller has an election of remedies on the buyer's
default: (I) sue for the balance of the purchase money and foreclose the lien; (2) rescind the
contract and take possession; or (3) sue to recover title and possession. Hampton v. Minton, 785
S.W.2d 854 (Tex. App.-Austin 1990, writ den.); Lusk v. Mintz, 625 S.W.2d 774 (fex. Civ.
App.- Houston (14th Dist.] 1981, no writ). A vendor's lien is an assignable interest. Cadle Co. v.
Caamano, 930 S.W.2d 917, 919- 920 (Tex. App.-Houston [14th Dist.] 1996, no writ). For a
discussion of implied vendor' s liens, see Standard 15.40.
Even if an express lien is not reserved in the deed, the seller still has, by operation of law, an
implied or equitable vendor's lien to secure payment of any unpaid portion of the purchase
money. However, when there is no express vendor's lien in the deed, the buyer receives full title
to the property, and the seller's only remedy under an equitable vendor's lien is a judicial
foreclosure. Zapata v. Torres, 464 S.W.2d 926, 928 (Tex. Civ. App.-Dallas 1971, no writ).
Other Contractual Liens: A lien may be created by contract to secure practically any
obligation. Commonly encountered voluntary liens include:
(a) Mechanics' and Materialmen's Contract Lien.
A contract granting a lien for improvements on real property is commonly made
separately from a mortgage or deed of trust in order to address special requirements
relating to the placement of liens on homesteads. For a lien contract validly to impose
a lien on homestead property, it must be executed before any labor is performed or
material furnished, must be filed for record in the county clerk's office, and must
meet certain other requirements. Tex. Prop. Code Ann. § 53.254.
(b) Oil and Gas Operating Agreement Lien.
Commonly, oil and gas joint operating agreements impose a lien upon the interest of
a party to the agreement who defaults in the performance of its obligations under the
agreement. Record notice of the lien may be shown by a memorandum of the
operating agreement filed in the records of the county clerk. However, even without
recording, a third party may be on notice of the lien for other reasons, including a
reference to the operating agreement in the chain of title. Mbank Abilene, N.A. v.
Westwood Energy, Inc., 723 S.W. 2d 246 (fex. App.-Eastland 1986, no writ). See
also Enduro Oil Co. v. Parish & Ellison, 834 S.W . 2d 547 (Tex. App.-Houston [14th
Dist.] 1992, writ denied). See generally 3 Ernest E. Smith and Jacqueline Lang
Weaver, Texas Law of Oil and Gas § 17.3(C)(2) (2d ed. 2006).
(c) Homeowners' Association Lien for Assessments.
Unless there is a subordination, a homeowners' association assessment lien provided
for in the declaration of restrictions has priority over subsequent rights (such as
homestead rights) and transfers that occurred before the assessment was due. Inwood
North Homeowners' Association v. Harris, 736 S.W . 2d 632 (fex. 1987). Respecting
condominiums, however, the unit owners' association lien for unpaid assessments is
given statutory priority over any other lien except those listed in Tex. Prop. Code.
Ann. § 82.113(b). A deed restriction or other covenant running with the land and
applicable to residential real estate that requires payment of a fee for a future transfer
of the property (including any lien in support thereof) by a transferee is void and
unenforceable; however, this invalidity does not apply to a restriction or covenant in
favor of a residential "property owners' association" (as defined in Tex. Prop. Code
Ann. § 209.002), a tax exempt entity (26 U.S .C. § 50l(c)(3)), or a governmental
entity. Tex. Prop. Code Ann. § 5.017. Note that one company has asserted that this
section might not prohibit the assessment of a developer's fee against a transferor.

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See http://www .:freeholdlicensing.com/.
Formalities: Generally applicable conveyancing rules govern mortgages and deeds of trust. A
mortgage, deed of trust, or other contractual lien on real estate falls within the statute of frauds.
Tex. Bus. & Com. Code Ann. § 26.0l(a), (b)(4); West v. First Baptist Church, 71 S.W.2d 1090,
1100 (Tex. 1934); Edward Scharf Assocs., Inc. v. Skiba, 538 S.W.2d 501 , 502-503 (rex. Civ.
App.-Waco 1976, no writ). Recordation of a mortgage or a deed of trust is not essential to make
it a valid and binding obligation between the immediate parties. Denson v. First Bank & Trust,
728 S.W.2d 876, 877 (Tex. App.-Beaumont 1987, no writ). An unrecorded deed of trust is
effective between the parties and against any other person who has notice of it. Tex. Prop. Code
Ann. § 13.00l(b); Biggs & Co. v. Caldwell, 115 S.W.2d 461, 463 (rex. Civ. App.-Fort Worth
1938, writ dism'd). If after the execution of a mortgage or a deed of trust, the mortgagor
subsequently acquires title to property described in the mortgage or deed of trust, the title is
automatically encumbered by the lien by virtue of the doctrine of after-acquired title (estoppel by
deed). Clark v. Gauntt, 161 S.W.2d 270, 271 (Tex. 1942); Shield v. Donald, 253 S.W.2d 710, 712
(Tex. Civ. App.- Fort Worth 1952, writ refd n.r.e.). The doctrine of estoppel by deed does not
apply to quitclaim instruments.
Judgments or documents purporting to create a lien from a purported court not expressly
created or established under the Texas or U.S. constitution or not consented to by the debtor, are
presumed fraudulent. For example, a document purporting to establish or assert a lien against real
property and filed by a prison inmate is presumed fraudulent. Tex. Civ. Prac. & Rem . Code Ann.
§§ 12.001 , 12.002; Tex. Gov't Code Ann. §§ 51.901(e) and (f).
Rents, Issues and Profits: Unless the mortgage or deed of trust provides otherwise, the
property owner generally retains the right to rents, issues, and profits while the property is subject
to the lien. However, the deed of trust or a separate instrument commonly includes a provision
assigning to the mortgagee the mortgagor's interest in rents or other income accruing after the
date of the mortgage as additional security. NCNB Tex. Nafl Bank v. Sterling Projects, Inc., 789
S.W.2d 358, 360 (Tex. App.-Dallas 1990, writ dism ' d w.o.j .); McGeorge v. Henrie, 94 S.W.2d
761,762 (Tex. Civ. App.-Texarkana 1936, no writ).
If an assignment of rents is given as additional security for the debt, the assignment does not
become operative until the creditor takes affirmative action, such as obtaining possession of the
property, impounding the rents, or securing the appointment of a receiver. Summers v. Consol.
Capital Special Trust, 783 S.W .2d 580, 583 (rex. 1989). On the other hand, if the assignment of
rentals is an "absolute assignment," it does not create a security interest, but instead
automatically gives the creditor title to the rent on the occurrence of a specified condition, such as
default. NCNB Tex. Nat'l Bank v. Sterling Projects, Inc., 789 S.W.2d 358, 360 (rex. App.Dallas 1990, writ dism 'd w.o.j.). Whether the assignment is an absolute assignment or is given as
additional security depends on the intent of the parties, as determined by examining both the
assignment of rents clause and the security agreement executed contemporaneously with it. Oryx
Energy Co. v. Union Nat'l Bank of Tex., 895 S.W.2d 409, 415 (Tex. App.- San Antonio 1995,
writ denied). Absolute assignments are not favored by the courts. If the assignment agreement or
deed of trust states that the assignment of rents is given as "further" security for the debt and
permits the creditor on default to enter the premises and collect the rents, the assignment will be
construed to be a security, which must be foreclosed, not an absolute assignment. Taylor v.
Brennan, 621 S.W .2d 592 (Tex. 1981).
Landlord-Tenant: By statute, a tenant's leasehold interest is not a transferable interest and
will not be subject to a security interest unless the landlord consents to subletting by the tenant.
Tex. Prop. Code Ann. § 91.005; Am. Nat' l Bank & Trust v. First Wis. Mtg. Trust, 577 S.W.2d
312, 316 (Tex. Civ. App.- Beaumont 1979, writ refd n.r.e.) . A lease provision allowing the tenant
to sublet without further consent by the landlord empowers the tenant to create a security interest
in the leasehold. Menger v. Ward, 30 S.W . 853, 854 (Tex. 1895). Unless the parties provide

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otherwise in the lease, a landlord may create a security interest in the reversion, because the
landlord's reversionary interest is alienable. Wilson v. Beck, 286 S.W. 315 , 321- 322 (Tex. Civ.
App.-Dallas 1926, writ rerd). A security interest in the reversion is subject to any then existing
lease unless the lease provides for a subordination of interests. F. Groos & Co. v. Chittim, 100
S.W . 1006, 1010-1011 (Tex. Civ. App. 1907, no writ).
Future Advance Clause: A future advance clause in a mortgage or deed of trust creates an
inchoate security interest in the subject property. If and when a debt arises that is covered by the
instrument, the inchoate security interest immediately and automatically ripens into a lien.
Robinson v. Nat'l Bank of Commerce, 515 S.W .2d 166, 168 (Tex..Civ. App.- Dallas 1974, no
writ). The future advance clause in a recorded deed of trust has the same priority over subsequent
conveyances and encumbrances as the deed of trust because the clause is sufficient to put third
parties on notice of the possibility of future indebtedness, and the duty to inquire is on the third
party. Regold Mfg. Co. v. Maccabees, 348 S.W.2d 864, 865 (Tex. Civ. App.-Fort Worth 1961,
writ rerd n.r.e .); Coke Lumber & Mfg. Co . v . First Nat' l Bank, 529 S.W.2d 612, 615 (Tex. Civ.
App.-Dallas 1975, writ rerd).
Dragnet Clause: A dragnet clause provides that the deed of trust secures payment of not only
a specific debt, but all obligations of any kind that the debtor owes or may owe to the creditor,
past, present or future. A dragnet clause may read " all other indebtedness, obligations, and
liabilities of any kind or character of grantor to lender, now or hereafter existing, absolute or
contingent, arising by operation of law or otherwise, or direct or indirect, primary or secondary,
joint, several, fixed or contingent, and whether incurred by grantor as principal, surety, endorser,
guarantor, or otherwise." The dragnet clause applies only to indebtedness which was reasonably
within the contemplation of the parties to the mortgage or deed of trust at the time of execution.
Moss v. Hipp, 387 S.W.2d 656, 658 (Tex. 1965); FDIC v. Bodin Concrete Co., 869 S.W.2d 372,
377 (Tex. App .-Dallas 1993, writ denied). If as a result of the dragnet clause, other debt is owed
at the time the specific debt is paid, the borrower will not be entitled to a release.
For discussion of involuntary or constitutional or statutory liens, including constitutional and
statutory mechanics' and materialmen's liens, see Standards 15.20, 15.50, and 15.60. For
judgment liens, see Standard 15.30. For implied vendor' s liens, see Standard 15.40. For ad
valorem tax liens, see Standards 15.70 and 15.80. For lien priority and subordination, see
Standard 15.90. For removal of liens, see Standard 15.100. For lis pendens, see Standard 15.110.
For nonjudicial foreclosure, see Standard 16.10. For judicial foreclosure and execution sales, see
Standard 16.20. For foreclosure of home equity loans and reverse mortgages, see Standard 16.30.
For deeds in lieu of foreclosure, see Standard 16.40. Bankruptcy issues are addressed in Chapter
XII. Financing statements, fixtures, and crops are not within the scope of this chapter.
Caution:
Once perfected, many involuntary liens, including judgment liens and federal and state tax
liens but excluding liens securing ad valorem taxes, encumber all of the debtor's nonexempt
property located in the county where notice of the lien is recorded. The lien attaches to
nonexempt property owned at the time of perfection as well as to nonexempt property acquired
thereafter until the debt is discharged or enforcement is barred by limitations. Thus, an examiner
should not rely on a search of the relevant indices only from the time of the party' s acquisition
forward. Rather, the search for liens respecting each party in the chain of title should also extend
back from the time that a party acquires an interest for the longest possible period of limitation. In
this regard, for child support liens filed on or after September 1, 1997 and prior to May 26, 2009,
the duration of the Texas lien for . unpaid child support is indefinite, Tex. Fam. Code Ann. §
157.318, and federal judgment liens and federal tax liens may be renewed multiple times, see
Standards 15.30 and 15.60. Child support liens filed on or after May 26, 2009 are effective with
respect to real property until the lOth anniversary of the date on which the lien notice was filed
and may be renewed for subsequent 10-year periods if a renewed lien notice is filed before the
applicable lOth anniversary. Tex. Fam. Code Ann. § 157.318. Nevertheless, a title examiner

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reasonably relies exclusively on materials furnished to the examiner, such as an abstract of title or
a Iandman's run sheets. When doing a stand-up examination, the practice of examiners respecting
the scope of search for involuntary liens varies. To avoid an unreasonably expansive scope of
search, many examiners reasonably limit their stand-up examination for involuntary liens back 20
years from the date of examination under the names of current interest owners and parties who
disposed of their interest within 20 years of the date of examination. See Standard 1.20 and
accompanying Comment.
Cover-all and Mother Hubbard Clauses: A mortgage or deed of trust typically includes
general language that purports to cover lands or interests that are not specifically described. This
language is often called, but seldom labeled in the instrument, a " cover-all" clause or " Mother
Hubbard" clause. An examiner should examine any mortgage or deed of trust within the chain of
title in a grantor index that does not specifically cover the lands under examination to determine
whether that instrument, by reason of the scope of any " cover-all" clause or " Mother Hubbard"
clause, may encumber the lands under examination. The typical cover-all or Mother Hubbard
clause includes real property interests appurtenant to the land described, such as easements, strips
and gores, etc. ; ~owever, the clause may be much broader by also referring to all of the
mortgagor's land in the county or all of the grantor' s land, as described in another document.
Compare Jones v. Colle, 727 S.W.2d 262 (Tex. 1987); Smith v. Allison, 301 S.W .2d 608 (Tex.
1957); Broaddus v. Grout, 258 S.W.2d 308 (Tex. 1953); Sun Oil Co. v. Bennett, 84 S.W.2d 447
(Tex. 1935); Sun Oil Co. v. Bums, 84 S.W .2d 442 (Tex. 1935); Smith v. Westall, 13 S.W. 540
(Tex. 1890); Witt v. Harlan, 2 S.W. 41 (Tex.1886); Holloway 's Unknown Heirs v. Whatley, 131
S.W.2d 89 (Tex. 1939); Sanderson v. Sanderson, 109 S.W.2d 744 (Tex. 1937); J Hiram Moore,
Ltd. v. Greer, 172 S.W.3d 609 (Tex. 2005); and Lauchheimer v. Saunders, 65 S.W . 500 (Tex.
Civ. App. 1901, no writ).
Claim for conveyance of residential property encumbered by a lien: Effective January 1,
2008, a person may not contract to sell or convey an interest in residential real property that will
remain encumbered by a recorded lien unless, before the conveyance, the seller provides a
detailed disclosure of the lien and of any insurance relating to the property to the buyer and each
lienholder. There are numerous requirements regarding, as well as numerous exceptions to, the
duty of disclosure. A violation of the duty to disclose allows the buyer to terminate a contract for
sale but does not invalidate a conveyance; however, the transferee, in certain circumstances, may
have a cause of action for damages. Tex. Prop. Code. Ann. § 5.016. Although the law appears to
have been passed to address sales of residences, the law is broadly worded to apply to a contract
of sale or conveyance of any interest in "residential real property" (undefined), including
easements and oil and gas leases, but is also subject to numerous exceptions-e.g., the law does
not apply to a transfer where the purchaser obtains a title insurance policy or to a person "who has
purchased, conveyed, or entered into contracts to purchase or convey an interest in real property
four or more times in the preceding 12 months." Id. At 5.016(c).
·

Source:
Citations in the Comment.
History:
Adopted, June 13, 2003 .

Standard 15.20. Involuntary Mechanics' And Materialmen's Liens.

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The examiner should identify recorded mechanics' and materialmen' s lien affidavits affecting
the title under examination.

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Comment:
The Texas constitution provides that ''[m]echanics, artisans and materialmen, of every class,
shall have a lien upon the buildings and articles made or repaired by them for the value of their
labor done thereon, or material furnished therefor; and the Legislature shall provide by law for the
speedy and efficient enforcement of said liens." Tex. Canst. art. XVI, § 37. The constitutional
lien attaches not only to the 'building' for which the work was done or material furnished but to
so much of the land on which it stands as is necessary for its enjoyment, which is a question of
fact. Ferrell v. Ertel, 100 S.W.2d 1084 (Tex. Civ. App. -Fort Worth 1936, writ dism' d). What
constitutes a " building" has been construed broadly. See Ambrose & Co. v. Hutchison, 356
S.W.2d 215 (Tex. Civ. App.-Fort Worth 1962, no writ) (holding that a pier is a building);
Moore v. Carey Bros. Oil Co., 269 S.W. 75 (Tex. Comm'n App. 1925, judgm' t adopted) (holding
that oil well casing is a building). The constitutional lien is self-executing as between the property
owner and original contractors, and one providing labor or materials directly to the owner is not
subject to statutory conditions to enforcement such as the timely filing of an affidavit claiming
the lien. Hayek v. Western Steel Co., 478 S.W.2d 786, 790 (Tex. 1972); Strang v. Pray, 35 S.W.
1054 (Tex. 1896). While, generally, the constitutional lien may be either oral or written, for it to
be a valid construction or improvement lien on homestead, the contract must be in writing.
Cavazos v. Munoz, 305 B.R. 661, 680 (S.D . Tex 2004). The constitutional lien is not binding on
third parties without notice or unless the contractor has followed the statutory lien provisions.
Strang v. Pray, 35 S.W. at 1056. Only original contractors may claim the constitutional lien;
subcontractors face the more onerous burden of perfecting a statutory lien. Da-Col Paint
Manufacturing Co. v. American Indemnity Co., 517 S.W.2d 270, 273 (Tex. 1974); First National
Bank v. Lyon-Gray Lumber Co., 217 S.W. 133 (Tex. 1919). Special rules apply to renovation and
repair on existing improvements on a homestead. Tex Const. art XVI, § 50(a)(5)(A)-(D).
In addition to the constitutional lien, a statutory lien is available to one who provides labor or
materials, either as an original contractor or as a subcontractor: (l) for a house, building or
improvement, a levee or embankment, or a railroad, Tex. Prop. Code Ann. § 53.021 ; or (2) for an
oil, gas or water well, an oil or gas pipeline, or a mine or quarry, Tex. Prop. Code Ann. §§
56.001-56.002. The existence and enforceability of the statutory lien is entirely dependent on the
contractor's or subcontractor's compliance with specified prerequisites, though substantial
compliance is sufficient. First National Bank v. Sledge, 653 S.W.2d 283 (Tex. 1983). Of primary
importance to the title examiner are the statutes' requirements for the recording of an affidavit
claiming the lien. The pertinent requirements are generally as follows :
General Mechanic's Lien: The affidavit claiming a lien for labor or materials furnished to a
house, building, or improvements, a levee or embankment, or a railroad must be filed in the office
of the county clerk of the county in which the property is located not later than the 15th day of the
fourth calendar month after the day on which the indebtedness accrues, except that for a lien
arising from a residential construction project, it must be filed not later than the 15th day of the
third calendar month after such accrual. Tex. Prop. Code Ann. § 53.052(a) & (b). The
indebtedness generally accrues on the last day of the month the contract was completed or
terminated for an original contractor and on the last day of the last month labor was performed or
material furnished by a subcontractor or material supplier. Tex. Prop. Code Ann. § 53.053. The
affidavit must be signed and sworn to by the person claiming the lien or another person on the
claimant's behalf and contain the items specified in Tex. Prop. Code Ann. § 53.054, including the
amount of the claim ; the name and last known address of the owner, the person who employed
the claimant, and the original contractor; the kind of work done and material furnished (and, for a
subcontractor, each month in which the work was done or material furnished); a legal description
of the property; and, for subcontractors, the date and method of notice to the owner.
The inception of a mechanic's lien is the commencement of visible construction, Tex. Prop.
Code Ann. § 53.124. However, the inception of a architect's, engineer's, surveyor's, landscaper's,

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or demolition contractor's lien is the date of recording of the lien, provided that the underlying
contract for work is in writing. Id. §§ 53.021 and 53.124(e).
Mineral Contractor's or Subcontractor's Lien: One who furnishes labor or material for an oil,
gas or water well, an oil or gas pipeline, or a mine or quarry must file an affidavit in the office of
the county clerk of the county where the property is located not later than six months after the day
the indebtedness accrues. Tex. Prop: Code Ann. § 56.021(a). A mineral subcontractor must have
served notice of the claim on the property owner at least ten days before filing the affidavit. Tex.
Prop. Code Ann. § 56.021(b). The indebtedness for labor performed by the day or week accrues
at the end of each week during which the labor is performed. Tex. Prop. Code Ann. § 56.005(a).
The indebtedness for material or services otherwise accrues on the date they were last furnished ;
all material or services furnished by the same person to the same property are considered
furnished under a single contract unless more than six months elapse between the dates the
material or services are furnished. Tex. Prop. Code Ann. § 56.005(b). The affidavit must contain
the items specified in Tex. Prop. Code Ann. § 56.022, including the name and mailing address of
the claimant; the name of the mineral property owner, if known; an itemized list of the amounts
claimed and the dates of performance or furnishing; a description of the land, leasehold interest,
pipeline or pipeline right-of-way involved; and, if the claimant is a subcontractor, the name of the
person for whom the labor was performed or material furnished and a statement that the claimant
served timely notice on the owner or the owner's representative. The lien attaches to leasehold
interests and is not limited to the wells or to the proration units around the wells. Thus, the lien
claimant for a well will acquire a lien in other wells on the same lease and in nonproductive
acreage covered by the lease. Mercantile Nat'l Bank v. McCullough Tool Co., 259 S.W.2d 724
(Tex. 1953). The lien attaches only to the leasehold interest of the owner who contracts with the
lien claimant. The lien does not attach to the undivided interest of co-owners who did not contract
with the lien claimant unless the lien claimant can establish that the co-owners are mining
partners or joint venturers or that an agency relationship exists. Youngstown Sheet and Tube Co.
v. Penn, 357 S.W.2d 239 (Tex. Civ. App. -Austin 1962), modified on other grounds, 363 S.W.2d
230 (Tex. 1962). Typically, the co-owners of the leasehold will designate an operator as an
independent contractor under a joint operating agreement, and so long as the parties' conduct is
not inconsistent with that characterization, they will not be mining partners or joint venturers and
the operator will not be regarded as an agent of the nonoperators. Ayco Devel. Corp. v. G.E.T.
Service Co., 616 S.W .2d 184 (Tex. 1981); Tex. Prop. Code Ann. §§ 56.001-56.006.
Tex. Prop. Code ch. 62 also enables a broker to perfect a statutory lien on a seller's or lessor's
commercial non-residential real estate for the broker's commission. A broker claiming the lien
must have earned the commission under a written commission agreement and comply with the
filing and notice requirements of Tex. Prop. Code Ann. §§ 62.024-62.026, 62.041.
Enforcement of an original contractor's constitutional lien, unlike a statutory lien, is not
barred if the contractor fails to meet the statutory requirements for, among other things, filing an
affidavit. Farmers ' & Mechanics' National Bank v. Taylor, 40 S.W. 876 (Tex. Civ. App.- Fort
Worth 1897), aff'd, 40 S.W . 966 (Tex. 1897); Texas Builders' Supply Co. v. Beaumont
Construction Co., 150 S.W. 770 (Tex. Civ. App.- Galveston 1912, writ dism'd). The statutory
requirements must be satisfied, however, for a constitutional lien to be enforceable against a bona
fide purchaser. Black, Sivalls & Bryson, Inc. v. Operators' Oil & Gas Co., 37 S.W.2d 313, 315
(Tex. Civ. App.- Eastland 1931, writ dism 'd). Thus, where a bona fide purchaser is involved,
any inquiry for the existence of unfiled liens ordinarily need extend no further for constitutional
liens than for statutory liens. However, a purchaser who knows or should have known offacts and
circumstances giving rise to a constitutional lien or a donee acquires the property subject to it.
See Apex Financial Corp. v. Brown, 7 S.W.3d 820, 831 (Tex. App.-Texarkana 1999, no pet.).
A suit to foreclose a statutory lien must generally be filed within two years (or one year for a
claim arising from a residential construction contract) after the last day the claimant may file the
lien affidavit, or within one year after completion, termination, or abandonment of the work under

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the original contract, whichever is later. Tex. Prop. Code Ann. §§ 53.158, 56.041 (a). After the
passage of that period, the title examiner may assume that the lien is no longer effective unless a
foreclosure suit has been filed, or unless the lien being claimed is or may be a constitutional one.
In the latter event the general four-year statute of limitation for debt actions, Tex. Civ. Prac. &
Rem. Code Ann. § 16.004(a), would apply.
The right to enforce a lien for performance of labor or furnishing material may be waived by
express agreement or by acts inconsistent with the lien's continued existence, but waiver will not
be inferred unless the lienholder' s intention to do so is clear. See Jones v. White, 12 S.W. 179
(Tex. 1888); McBride v. Beakley, 203 S.W. 1137 (Tex. Civ. App. -Arnarillo 1918, no writ). A
statutory mechanics' and materialmen' s lien may be avoided by the filing of a bond for payment
in compliance with Tex. Prop. Code Ann. §§ 53.171- 53 .175 or§§ 53 .201-53 .211.
For a discussion of voluntary mechanics' and materialmen's liens, see Standard 15.10.
Caution:
A mechanics' and materialmen' s lien relates back to the beginning of the work or the
furnishing of materials. Tex. Prop. Code Ann. § 53 .124; Denny v. White House Lumber Co., 54
S.W .2d 86 (Tex, Comm'n App. 1932, holding approved). The lien of a contractor or
subcontractor who complies with the statutory filing and other requirements will be superior to
the title of a subsequent purchaser, regardless of notice of the lien. Accordingly, prospective
purchasers and lenders must make some inquiry outside the public records into activity on the
property at least as far back as the length of the filing periods and seek to assure themselves that
any potential claimants have been paid.
Source:
Citations in the Comment.
History:
Adopted, June 16, 2006.

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Standard 15.30. Judgment Liens
An examiner should identify recorded abstracts of judgment affecting the title under
examination.
Comment:
If a court-certified " abstract of judgment" is properly prepared, recorded, and indexed, a
judgment lien attaches to the judgment debtor's non-homestead real property, then owned or
thereafter acquired, located in the county or counties where the abstract of judgment is of record.
Tex. Prop. Code Ann. §§ 52.001, 52.002. The term " real property" includes any interest in land
including any undivided interest. Robertson v. Scott, 172 S.W.2d 478 (Tex. 1943); Stroble v.
Tearl, 221 S.W .2d 556 (Tex. 1949).
An examiner should identify potentially enforceable liens evidenced by recorded abstracts of
judgment and advise the client as appropriate to the circumstances of the examination. Typically,
an examiner will require that any lien evidenced by a recorded abstract of judgment be released.
In general, neither the entry of a money judgment nor the recordation of a judgment creates a
lien. White v. FDIC, 19 F.3d 249, 251 n.5 (5th Cir. 1994). Although a judgment may create a
separate judicial lien by its express language, a certified copy of a judgment does not qualify as
an abstract of judgment and does not create a lien by recordation. Citicorp Real Estate, Inc. v.
Banque Arabe Internationale D'lnvestissement, 747 S.W.2d 926, 929 (Tex. App. -Dallas 1988,
writ denied). An examiner will usually assume that a recorded document appearing to be an
abstract of judgment creates an enforceable lien. However, occasionally an examiner may have to
consider the validity of a recorded abstract of judgment, as for example where a title examination
is being conducted for a judgment creditor. To create an enforceable judgment lien, the abstract
of judgment must contain all of the mandatory items required by Tex. Prop. Code Ann. § 52.003:

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1.
2.
3.
4.
5.
6.

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The names of the plaintiff and defendant;
The birth date of the defendant, if available;
The last three numbers of the driver's license number of the defendant, if available;
The last three numbers of the social security number of the defendant, if available;
The number of the suit in which the judgment was rendered;
The defendant's address, or if the address is not shown in the suit, the nature of
citation (i.e., service of process) and the date and place of service of citation;
7. The date on which the judgment was rendered;
8. The amount for which the judgment was rendered and the balance due;
9. The amount of the balance due, if any, for child support arrearage; and
10. The rate of interest specified in the judgment.
The above requirements summarize current law and do not reflect prior statuto!)' requirements.
Womack v. Paris Grocer Co., 166 S.W.2d 366 (Tex. Civ. App. -Galveston 1942), writ ref'd
168 S.W.2d 645 (Tex. 1943). While each and every statutocy element must be met to establish a
lien, the standard for establishing a lien is substantial compliance with the statute. Apostolic
Church v. American Honda Motor Co., 833 S.W.2d 553, 554 (Tex. App.-Tyler 1992, writ
denied). While older cases suggest strict compliance with the statuto!)' elements, more recent
cases suggest that the abstract of judgment must contain sufficient facts to put a subsequent
purchaser on notice of a lien. See Thompson v. Clay, 367 S.W.2d 917, 920 (Tex. Civ. App.Amarillo 1963, writ ref'd n.r.e.).
The lien comes into existence only when the abstract of judgment has been recorded and
indexed as to each plaintiff and each defendant. J. M. Radford Grocery Co. v. Speck, 152 S.W.2d
787, 789 (Tex. Civ. App.-Amarillo 1941, writ ref'd). An abstract of judgment may not be
enforced if it is indexed under an incorrect name. For example, in Wicker v. Jenkins,l08 S.W.
188 (Tex. Civ. App. 1908, no writ), the court held that the abstract of judgment was invalid where
record title was in W. F. B. Wicker, but the abstract of judgment was indexed against the Plaintiff
as " W. B. F. Wicker." Likewise, in Anthony v. Taylor, 4 S.W. 531(Tex. 1887), the court held
that the abstract of judgment was invalid where a judgment recovered by "Joan and William
Bankhead" was abstracted as ajudgmentrecovered by " Joan and William Burkhead". The cases
dealing with the validity of abstracts of judgment do not seem to apply idem sonans. See Standard
3.10.
All names must be indexed to create a valid lien. Shirey v. Trust Co. of Texas, 69 S.W.2d 835
(Tex. Civ. App.-Texarkana 1934, writ ref'd) (holding that abstract of judgment was fatally
defective where it was indexed in the names of all defendants against whom a personal judgment
was rendered but not in the name of one additional defendant against whom costs only had been
awarded); McGlothlin v. Coody, 59 S.W.2d 819 (Tex. Comm'n App. 1922, judgm't adopted)
(holding that abstract of judgment failed to create a judgment lien where it was indexed under the
name of the defendant against whom a money judgment was rendered but not in the name of an
additional defendant against whom a foreclosure was ordered); Reynolds v. Kessler, 669 S.W.2d
801 , 805 (Tex. App.-El Paso 1984, no writ) (" The names of all the parties to the judgment must
appear alphabetically in the index, direct and reverse" ). The names of defendants must correctly
appear in the direct index, and names of the plaintiffs must appear in the indirect index. Guaranty
State Bank v. Marion County Nat'l Bank, 293 S.W. 248 (Tex. Civ. App. -San Antonio 1927, no
writ.) (holding that no lien was created where the abstract was correctly indexed as to all
defendants but not indexed for any of the plaintiffs).
The judgment creditor has the burden to prove that the abstract of judgment complied with
the statute and that it was properly recorded and indexed. Alkas v. United Sav. Ass 'n of Texas,
Inc. , 672 S.W.2d 852, 859 (Tex. App. -Corpus Christi 1984, writ ref'd n.r.e.). The judgment
creditor cannot use as a defense the fact that the error was caused by the clerk. Caruso v.
Shropshire, 954 S.W.2d ll5, 116 (Tex. App. -San Antonio 1997, no pet.).

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A judgment lien continues for a period of ten years following the date of recording and
indexing the abstract, unless the judgment becomes dormant during this time. Tex. Prop. Code
Ann. § 52.006. Dormancy of judgments is addressed by Tex. Civ. Prac. & Rem. Code Ann. §
34.001. If a judgment becomes dormant, any judgment lien derived therefrom also becomes
dormant. Anthony v. Taylor, 4 S.W. 531, 532 (Tex. 1887). A dormant judgment may be revived
within two years from the date of dormancy by filing a scire facias proceeding. Tex. Civ. Prac. &
Rem. Code Ann. § 31.006. In addition, dormancy may be prevented by filing suit to foreclose the
judgment lien, which is regarded as an action for debt sufficient to preserve the judgment.
Churchill v. Russey, 692 S.W.2d 596, 597- 98 (Tex. App.- Ft. Worth 1985, no writ).
If a judgment is not dormant, an abstract of judgment can be re-recorded and re-indexed.
Each recording and indexing of an abstract of judgment seems to create a new lien with a new
priority date. Burton Lingo Co. v. Warren, 45 S.W.2d 750 (Tex. Civ. App.-Eastland 1931, writ
ref d).
There are three exceptions to the general rule that a judgment lien lasts for ten years :
(1) Judgment liens in favor of the United States are effective for 20 years and may be
extended with the same priority another 20 years. 28 U.S.C.A. § 3201;
(2) Child support liens filed before May 26, 2009 are effective indefmitely. Child
support liens filed on or after May 26, 2009 are effective for real property until the
tenth anniversary of the date on which the lien notice was ftled and may be extended
for subsequent 10-year periods by filing a renewal lien notice before the tenth
anniversary. Tex. Fam. Code Ann. § 157.318. In the Interest ofS.C.S. and M.D .S., 48
S.W.3d 831 (Tex. App. -Houston [14th Dist.] 2001, pet. denied); and
(3) Judgment liens in favor of the state or a state agency are effective for 20 years and
may be renewed for an additional20 years. Tex. Prop. Code Ann. § 52.006(b).
An abstract of judgment creates a judgment lien only if issued by a Texas state court under
Tex. Prop. Code Ann. §§ 52.001 , 52.002, or by a United States district court located in Texas, as
authorized by Tex. Prop. Code Ann. § 52.007. See Reynolds v. Kessler, 669 S.W.2d 801, 806
(Tex. App.-El Paso 1984, no writ); 28 U.S .C. § 1962. A foreign judgment must first be
domesticated as provided in Tex. Civ. Prac. & Rem. Code Ann. ch. 35 and ch. 36, whereupon an
abstract of judgment may be issued and recorded in the same manner as any other Texas
judgment. Hennessy v. Marshall, 682 S.W.2d 340, 343 (Tex. App.- Dallas 1984, no writ).
An abstract of judgment lien cannot attach to a homestead; however, whether particular
property constitutes a homestead is not always clear in the record. Thus, an abstract of judgment
lien clouds a homestead title. For abstract of judgment liens recorded and indexed on or after
September 1, 2007, Tex. Prop. Code Ann. § 52.0012 creates a nonjudicial procedure for clearing
such cloud by filing an affidavit that operates to release the abstract of judgment respecting the
homestead unless the creditor files a contradicting affidavit within the time provided by the
statute. For abstracts of judgment liens recorded and indexed prior to September 1, 2007, the
cloud on the homestead could be released by a declaratory judgment action.
An obligor who believes that a child support lien has attached to the homestead of the obligor
may file an affidavit to release the lien against the homestead in the same manner as a judgment
debtor may file an affidavit to release a judgment lien against the homestead, provided the obligor
complies with the requirements of the statute. Tex. Prop. Code Ann. § 52.0012. The obligor is
required to send the letter and affidavit to the claimant under the child support lien at the
claimant's last known address. The affidavit filed by the obligor has the same effect respecting a
child support lien as an affidavit ftled respecting a judgment lien. The claimant may file a
contradicting affidavit in the same manner as provided by Id. § 52.0012(e). See Tex. Fam. Code
Ann. § 157.3171.
For the effect of bankruptcy upon judgment liens, see Standard 12.140.
Caution:

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The above comments only briefly identify the issues inherent in proving up an abstract of
judgment. There are many cases, particularly older cases, which conclude that an abstract of
judgment lien was not created based upon what today might appear to be very technical and rigid
mistakes. An examiner asked to opine on the enforceability of a particular judgment should
carefully research this issue.
Source:
Citations in the Comment.
Steven C. Haley, Texas Abstracts of Judgment and Judgment Liens, State Bar of Tex. Prof.
Dev. Prog., Advanced Real Estate Law Course (2000).
C. M. (Hank) Hudspeth, Judgment Liens and Abstracts of Judgment in Texas, 32 Tex. B. J.
520 (1969).
S. Bradley Todes and RosaS. Silbert, Judgment Liens in Texas, Ho:uston Lawyer, May/June,
1994, at 28 .
History:
Adopted: June 16,2006.
Standard 15.40. Implied Vendor's Liens

Absent an express vendor's lien, if the record indicates, or the examiner otherwise knows that
purchase money remains unpaid, the examiner should consider the possible existence of an
implied vendor's lien.

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-

Comment:
Although liens are most commonly created by express contract or by statute, certain liens
may arise by implication. Williams v. Greer, 122 S.W.2d 247 (Tex. Civ. App.-Dallas 1938, no
writ). For example, where no express lien is reserved in the deed and the purchase money is not
paid, an implied lien arises in favor of the vendor to secure payment of the purchase money.
McGoodwin v. McGoodwin, 671 S.W.2d 880 (Tex. 1984). If the purchase price is not paid, a
vendor may sue for the debt and enforce an implied lien, although the vendor is not entitled to
rescind the sale and recover the property. Rhiddlehoover v. Boren, 260 S.W.2d 431 (Tex. Civ.
App. -Texarkana 1953, no writ). Thus, for example, if the examiner encounters a deed reciting
that part of the consideration is an obligation not yet paid, such as a promissory note, the
examiner should consider an implied vendor's lien to exist notwithstanding that no express
vendor's lien is received and no deed of trust or mortgage appears.
An equitable or implied vendor's lien is not recordable, but rests upon the principle that it
would be inequitable to allow one to retain the property of another without paying for it. It is
good against all except subsequent bona fide purchasers and encumbrancers. United States v.
Morrison, 247 F.2d 285 (5th Cir. 1957); Scull v. Davis, 434 S.W.2d 391 (Tex. Civ. App.-El
Paso 1968, writ ref'd n.r.e.).
If an express lien is retained affmnatively showing the party's intention to rely solely upon
the security provided within the written agreement, any implied or equitable lien is presumptively
waived. Equity does not infer that the vendor is entitled to a different and additional security from
that specified in the contract. GXG, Inc. v. Texacal Oil & Gas, 977 S.W.2d 403 (Tex. App. Corpus Christi 1998, pet. denied). Similarly, where a note was secured by a deed of trust and the
parties struck out of the deed the printed language concerning the reservation of a vendor's lien,
the deletion affmnatively showed the seller's intention to rely solely on the deed of trust. Zapata
v. Torres, 464 S.W.2d 926 (Tex. Civ. App. -Dallas 1971, no writ). Under these circumstances,
a
no equitable lien will arise, because the purpose of an implied equitable lien is to enforce .
purchase money obligation not otherwise secured.
Where part of the consideration for a conveyance is the purchaser's assumption of the seller's
indebtedness to a third party, the third-party creditor thereby becomes entitled to an implied

83

vendor's lien against the property. Delley v. Unknown Stockholders of Brotherly and Sisterly
Club of Christ, Inc., 509 S.W.2d 709 (Tex. Civ. App.-Tyler 1974, writ ref'd n.r.e.). An implied
vendor's lien will also be created under the terms of a divorce judgment, where a promissory note
is executed by one party in consideration of a conveyance of the other party' s interest in real
property, where no express lien was created in the divorce decree to secure the note. Colquette v.
Forbes, 680 S.W.2d 536 (Tex. App. -Austin 1984, no writ).
An implied lien may arise in cotenancy situations. For example, where a cotenant pays
expenses and advances taxes on behalf of another cotenant, the advancing cotenant may enforce
an implied lien for recovery of the advancements. Cox v. Davison, 397 S.W.2d 200 (Tex. 1965).
In partition, a court may divide the property into shares of unequal value and impose a payment
obligation, commonly called owelty. The owelty is secured by an implied vendor's lien. Sayers v.
Pyland, 161 S.W.2d 769 (Tex. 1942).
Any implied vendor's lien is lost when the debt is barred by the statute of limitations. See
comments to Standard 15.100, "Removal of Lien." Where the wording of the stated
consideration in an instrument " may or might create an implied lien in favor of the grantor," an
action for the recovery of the property conveyed by that instrument must be brought " not later
than four years after the day the instrument was recorded, if the instrument was "recorded" before
September 1, 2007, or two years after the date of recordation, if the instrument was "filed for
record" on or after September 1, 2007. Tex. Civ. Prac. & Rem. Code Ann. § 16.033(a)(9) . Act of
June 15, 2007, 80th Leg., R.S., ch. 819, § 2, 2007 Tex. Gen. Laws 1695 (nonretroactivity
provision).
Upon encountering an outstanding implied vendor' s lien, the examiner would ordinarily
require a release of the vendor's lien, a quitclaim deed from the holder of the obligation, or a
subordination of the vendor's lien to the interest being examined.
An implied vendee's lien may arise where the vendee advances consideration for property
without receiving valid title from the seller; however, a bona fide purchaser without notice of the
vendee's lien would take the property free of the lien. See Morris v. Holland, 31 S.W. 690 (fex.
Civ. App. 1895, no writ); Stockwell v. Melbern, 185 S.W. 399 (Tex. Civ. App.-Galveston 1916,
writ refd); Martin v. Bell- Woods Co., 57 S.W.2d 271 (Tex. Civ. App.-San Antonio 1932, no
writ).
For a further discussion of vendor's liens, see comments to Standard 15.10.
Source:
Citations in the Comment.
History :
Adopted, June 16, 2006.
Standard 15.50. Other Involuntary Statutory Liens
The examiner should identify other recorded statutory liens affecting the title under
examination.
Comment:
A host of specialized involuntary statutory liens may affect Texas real property. Among
them are the following:
Child Support Lien, Tex. Fam. Code Ann. §§ 157.311-.331.
Cotton Pests (Texas Department of Agriculture), Tex. Agric. Code Ann. § 74.004(e)-(g).
County Assessments For Road Improvements,* Tex. Transp. Code Ann.§ 253.009.
County Litter Lien, Tex. Health & Safety Code Ann. § 365.034(c).
County Weed and Sanitary Lien, Tex. Health & Safety Code Ann. § 343.023 .
Federal Lien Securing a Judgment Imposing a Criminal Fine, 18 U.S.C. § 3613.
Miscellaneous State Tax Liens, Tex. Tax Code Ann. ch. 113.

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Municipal Assessments for Street Improvements,* Tex. Transp . Code Ann. §§ 312.002,
312.064,313.042,313.051,313 .054.
Municipal Assessments for Water/Sewer Systems,* Tex. Loc. Gov't Code Ann. §§
214.013(b), 214.014, 552.065, 552.067.
Municipal Demolition Lien,* Tex. Loc. Gov't Code Ann. § 214.0015, -.004.
Municipal Utility Services Lien,* Tex. Loc. Gov' t Code Ann. § 552.0025(d)-(h).
Municipal Weed and Sanitary Lien,* Tex. Health & Safety Code Ann. § 342.007.
Solid Waste Facility Remedial Lien, Tex. Health & Safety Code Ann. § 361.194.
State Hospital Lien (for support, maintenance, and treatment of a patient with mental
illness or client with mental retardation), Tex. Health & Safety Code Ann. § 533.004.
Surface Coal Mining Reclamation,* Tex. Nat. Res. Code Ann.§ 134.150.
Texas Workforce Lien,* Tex. Lab. Code Ann. §§ 61.081-.085 .
Unemployment Taxes, Tex. Lab. Code Ann. §§ 213 .057-.058.
Water District Standby Fees,* Tex. Water Code Ann. § 49.231.
Water District Taxes,* Tex. Water Code Ann. § 55.604, Texas Tax Code Ann. § 32.01.
For a discussion of mechanics' and materialmen ' s liens generally, see Standard 15.20. For a
discussion of state ad valorem taxes and the lien securing them, see Standards 15.70 and 15.80.

Caution:
In most instances, a statutory lien is not perfected until a notice has been filed for record in
the pertinent county clerk' s office, and the lien' s priority is determined according to the time of
filing . However, the liens marked with an asterisk (*) in the above listing may have special
priority independent of the time or fact of filing over other titles and encumbrances.
Source:
Citations in the Comment.
History:
Adopted, June 22, 2007.

Standard 15.60. Federal Tax Liens
The examiner should determine whether the land under examination is subject to a federal tax
lien.

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Comment:
Various federal tax liens may constitute a claim against a taxpayer' s property. These include
a general tax lien (26 U.S.C. § 6321), a gift tax lien (26 U.S.C. § 6324(b)), an estate tax lien (26
U.S.C. § 6324(a)), a generation-skipping transfer tax lien (26 U.S.C. § 2661), and special liens
relating to recapture of deferred or reduced taxes such as special use valuation of a farm or
closely held business (26 U.S.C. §§ 6324A and 6324B).
Most federal tax liens attach to the taxpayer' s property following certain statutory notice from
the Internal Revenue Service and other procedures involving the taxpayer (26 U.S. C. § 6320). No
filing is required for perfection of the estate tax lien or gift tax lien. Except for the federal estate
tax lien, a lien is not perfected against a purchaser, a holder of a security interest, a holder of a
mechanic's lien, or a judgment creditor until a notice is filed in the records of the county where
the land is located (26 U.S.C. § 6323).
Procedures relating to release of liens and discharge of property from liens are set out in 26
U.S.C. § 6325.
Subject to renewal (26 U.S.C . § 6323(g)), a notice offederal tax lien is valid for 10 years and
30 days from date of assessment (26 U.S.C. §§ 6322, 6502, and 6503). Although rarely done, a
notice of federal tax lien may be filed for estate and gift taxes; if a notice is not filed, a federal
estate tax lien is valid for 10 years from the taxpayer's date of death (26 U.S. C. § 6324(a)(l)), and

85

a gift tax lien is valid for 10 years from the date of the gift (26 U.S.C. § 6324(b)). For more
information concerning liens against a decedent's estate, see Standard 11.60.
A federal tax lien may be extended by agreement of the taxpayer and the government, as well
as for other reasons. Unless an examiner has record notice or actual notice of an extension, an
examiner may assume that a federal tax lien has lapsed if the limitation periods in the prior
paragraph have expired.
An examiner should require a release of any lien held by the United States, any agency of the
United States, or any assignee of such a lien unless the lien is no longer enforceable under federal
law.

-

Caution:
See first paragraph of Caution to Standard 15.10.
Source:
Citations in the Comment.
History:
Adopted, June 22, 2007.

Standard 15.70. Payment Of Ad Valorem Taxes
The examiner ordinarily determines the status of payment of ad valorem taxes.
Comment:
Ad valorem taxes are assessed as of January 1 of each year. They are due and payable on the
following October 1 but are not delinquent if paid before February 1 of the following year. A tax
lien attaches on January 1 of each year to secure payment of taxes, penalties, and interest
ultimately imposed for that year. Tex. Tax Code Ann. § 32.01.
In determining the status of payment of ad valorem taxes, an examiner customarily relies
upon a tax certificate issued by a collector for a taxing unit. The methods of assessment and
collection are not uniform. The collection of taxes may be consolidated in one collector of taxes
or may be separately maintained by separate tax units. Tex. Tax Code Ann. §§ 6.23, 6.26. Any
person may request a tax certificate, which must be issued by the collector for the taxing unit. The
certificate shows the amount of delinquent taxes, penalties, and interest due according to the
unit' s current records. The effect of a tax certificate is as follows: " [I]f a person transfers
property accompanied by a tax certificate erroneously showing that no delinquent taxes, penalties,
or interest are due a taxing unit on the property, the unit's tax lien on the property is extinguished
and the purchaser of the property is absolved of liability to the unit for delinquent taxes, penalties,
or interest on the property. The person who was liable for the tax for the year it was imposed
remains personally liable for the delinquent tax, penalties, and interest." Tex. Tax Code Ann. §
31.08. However, a tax certificate issued through fraud or collusion is void.
Although examiners frequently rely on a tax receipt to indicate the payment of taxes for the
specified year, a tax receipt is only prima facie evidence that the tax has been paid. Tex. Tax
Code Ann. § 31.075.
The assessor is required to mail the tax bill by October 1 of each year, or as soon thereafter as
practicable. The tax bill, or a separate statement accompanying the tax bill, shall include: (l) the
appraised value, assessed value and taxable value of the land (including improvements); (2) the
market value and taxable value of the land, as provided in § 23.46 .(agricultural assessment), §
23 .55 (qualified open-space land), § 23.76 (qualified timber land), and § 23.9807 (restricted-use
timber land); and (3) the amount and type of any partial exemption. Tex. Tax Code Ann. § 31.01.
If there is a sale or change in use of land qualified for special valuation as agricultural land or
if there is a change in the use of land qualified for special valuation as open space or timber land,
an additional rollback tax may be imposed. Tex. Tax Code Ann. §§ 23.46, 23 .55, 23 .76, and
23.9807. As to when a rollback tax lien attaches, see Compass Bank v. Bent Creek Investments,

86

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Inc., 52 S.W.3d 419 (fex. App.- Fort Worth 2001, no pet.) (addressing agricultural rollback tax
liens).
Land is subject to foreclosure for nonpayment of delinquent taxes; however, if there has been
no foreclosure or if there is no pending foreclosure for delinquent taxes, the collector for a taxing
unit must cancel and remove from the delinquent tax rolls a tax that has been delinquent for more
than 20 years. Tex. Tax Code Ann. § 33.05. For further information on foreclosure, see Standard
16.20.
If the examiner does not determine the status of payment of ad valorem taxes, the examiner
should advise the client to make this determination.
Caution:
As previously indicated, the most reliable protection for a purchaser is a current tax
certificate; however, the examiner should verify that the certificate covers all of the relevant land
and improvements and encompasses all taxing units. Tex. Tax Code Ann. § 31.08. Moreover, a
tax certificate procured by fraud or collusion is void. ld. In addition, an erroneous tax certificate
does not protect a non-purchaser. ld.
Ad valorem taxes are subject to reassessment. For example, the property may no longer
qualify for the over-65 homestead tax exemption (e.g., the over-65 owner has died or is no longer
domiciled on the subject property), or there may have been a failure to include the land in a
taxing unit or a failure to assess improvements. In general, ad valorem property taxes may be
reassessed for up to five years. See, e.g., Tex. Tax Code Ann. §§ 25 .21 , 1.04(2). Harris County
Appraisal District v. Reynoldsffexas, J.V., 884 S.W.2d 526 (Tex. App.-El Paso 1994, no writ)
(improvements had not been assessed).
Source:
Citations in the Comment.
History:
Adopted, June 24,2005.
Standard 15.80. Priority Of Ad Valorem Tax Lien
The examiner should ordinarily assume that an ad valorem tax lien 1s superior to any
mortgage, judgment, other lien, or homestead right.

-

-

Comment:
All ad valorem tax liens have equal priority. The ad valorem tax lien is superior to a federal
tax lien. Tex. Tax Code Ann. § 32.04; 26 U.S.C . § 6323(b)(6). Except as hereafter provided, a tax
lien takes priority over the claim of any holder of a lien on the land encumbered by the tax lien,
regardless of whether the debt or lien existed before the tax lien. Tex. Tax Code Ann. § 32.05.
The above standard is subject to the following qualifications:
The ad valorem tax lien is subordinate to survivor' s allowance, funeral expenses, or expenses
of last illness of a decedent made against the estate. The ad valorem tax lien is subordinate to a
restrictive covenant running with the land, other than a restrictive covenant in favor of a property
owner's association recorded before January 1 of the year the tax lien arose, and is subordinate to
an easement recorded before January 1 of the year the tax lien arose. Tex. Tax Code Ann. §
32.05.
Tex. Tax Code Ann. § 32.06 provides a procedure whereby a taxpayer may authorize a third
party to pay ad valorem taxes and to obtain a transfer of the taxing unit' s lien. Effective
September 1, 2007, changes were made in this procedure that are prospective only. The
legislative enactment addresses the prospective nature of this change as follows :

87

The change in law made by this Act to Sections 32.06 and 32.065, [Tex.] Tax
Code, applies to all foreclosures under those sections that occur on or after the
effective date of this Act, other than a foreclosure under a transferred ad valorem
tax lien that was transferred before the effective date of this Act pursuant to a
contract that provided for specific foreclosure procedures under the law in effect
at the time the contract was executed. A foreclosure under a transferred ad
valorem tax lien that was transferred before the effective date ofthis Act pursuant
to a contract that provided for specific foreclosure procedures under the law in
effect at the time the contract was executed is governed by the law in effect at the
time the contract was executed, and the former law is continued in effect for that
purpose.
Sen. Bill1520, Section 4, 80th Leg . R. S. 2007.
Source:
Citations in the Comments.
History :
Adopted, June 24, 2005.
Standard 15.90. Lien Priority And Subordination
Subject to exceptions, an examiner may presume that a lien created and filed for record has
priority over a subsequently created competing lien or interest in the same property unless the
priority has been altered by a subordination agreement.
Comment:
Mter a senior lien is validly foreclosed, junior liens and junior interests in the same property
are extinguished. Arnold v . Eaton, 910 S.W.2d 181 (Tex. App.- Eastland 1995, no writ). Under
common law, the lienholder whose lien first attaches to the property has the right to satisfy the
lien against the property before the holders of subsequently attached liens. Windham v. Citizens
Nat'! Bank, 105 S.W.2d 348 (Tex. Civ. App.-Austin 1937, writ dism 'd). However, recording
statutes have modified the common law rules of lien priority. Generally, the first lien filed for
recordation is superior to a lien or other interest created subsequent to the first lien filed because
subsequent creditors and owners of junior interests are charged with constructive notice of the
earlier recorded lien. Regold Mfg. Co. v. Maccabees, 348 S.W.2d 864 (Tex. Civ. App.-Fort
Worth 1961, writ refd n.r.e.); Tex. Prop. Code Ann. § 13.002. A deed of trust or mortgage that
has not been recorded is void as to a creditor or subsequent purchaser for valuable consideration
without notice of the unrecorded encumbrance. Tex. Prop. Code Ann. § 13.00l(a).
A subordination agreement is a contractual modification of lien priorities which establishes
different lien priorities than those provided under the statutory or common law rules . In agreeing
to subordinate a superior lien secured by real property to a subsequent lien or other interest in the
same property, the superior lienholder voluntarily contracts to be paid after a junior lienholder if
the liens are foreclosed or agrees that foreclosure will not extinguish a previously junior interest.
Vahlsing Christina Corp. v . First Nat. Bank of Hobbs, 491 S.W.2d 954 (Tex. Civ. App.-El Paso
1973, writ refd n.r.e.).
If there are more than two liens against a real property interest at the time of subordination,
the subordinated lien is placed directly after the lien to which it is subordinated. Any liens not
participating in the subordination agreement that have a priority ranking between the liens
participating in the subordination move up in priority, becoming superior to the liens involved in
the subordination. Liens that have a lower priority ranking than the liens involved in the
subordination do not move up in priority. For example, if four liens against a parcel of real

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Fixture Filing: A purchase-money security interest in a fixture may have priority over a prior,
recorded real property lien provided the purchase-money security interest is filed as a fixture
filing in the real property records before the goods become fixtures or within 20 days thereafter.
Tex. Bus. & Com. Code Ann. § 9.334(d).
Federal Tax Liens: Special seniority rules govern federal tax liens. 26 U.S.C. §§ 6321- 6323.
In general, if the notice of a federal lien is filed prior to the time that the debtor acquires the
property, the federal tax lien has priority over any subsequently created lien or other interest.
United States v . McDermott, 507 U.S. 447, 455 (1993). However, a federal tax lien does not have
priority over a purchase money mortgage-at least if secured by an express vendor's lien. Slodov
v. U.S., 436 U.S. 238 (1978) (recognizing priority of purchase money lien); Minix v. Maggard,
652 S.W.2d 93 (Ky. Ct. App. 1983); Belland v. OK Lumber Company, Inc., 797 P.2d 638 (Alas.
1990); Rev. Rul. 68-57 (1977). See also Standard 15.60.
Possession: Similarly, a creditor may be put on notice of the equitable interest or adverse
claim of a person in prior possession of property. The creditor's lien will be inferior to the
possessor' s interest or estate if the possession is such that the creditor has a duty to ask the
possessor about the nature of the possessor' s claim. Boyd v. United Bank, N.A., 794 S.W.2d 839
(Tex. App.-El Paso 1990, writ denied).
Source:
Citations in the Comment.
History:
Ad?pted, June 13, 2003.

Standard 15.100. Removal of Lien
Subject to exceptions, an examiner may presume that a lien on real property is extinguished
upon establishing that the secured debt (1) has been paid or (2) has become unenforceable upon
expiration of the applicable limitations period.
Comment:
Regardless of whether a written release is delivered, the lien ceases to exist when the
underlying debt is paid; however, the lienholder has a duty to issue a written release. Knox v.
Farmers' State Bank, 7 S.W.2d 918 (Tex. Civ. App.- Eastland 1928, writ ref'd); Spencer-Sauer
Lumber Co. v. Ballard, 98 S.W.2d 1054 (Tex. Civ. App.-San Antonio 1936, no writ) (full
release); Cook v. Leslie, 59 S.W.2d 302 (Tex. Civ. App.-San Antonio 1933, no writ) (partial
release). Preferably a written release should be obtained whenever reasonably possible. To give
notice to third parties dealing with the property, a written release must be recorded in the county
in which the lien was recorded. Tex. Prop. Code Ann. §§ 11.001 , 13.002.
A title insurance company or its expressly authorized title insurance agent may file an
affidavit releasing a mortgage that exclusively encumbers (1) a one-to-four family residence or
(2) other property if the face amount of the secured indebtedness is less than $1.5 million. Tex.
Prop. Code Ann. § 12.017.
Commonly, a release of a mortgage or deed of trust may fail to expressly release a related
assignment of rents or leases or a separate fmancing statement which may have been given to the
same lender as additional security. If a deed of trust or other mortgage was filed for record at or
about the same time as the filing of a financing statement or the recordation of an assignment of
rents, leases, production, or other collateral to the same lender and appears to be part of the same
transaction evidenced by the deed of trust or other mortgage, it is common practice for an
examiner to assume that a full release of the deed of trust or other mortgage without specific
reference to the financing statement or assignment is sufficient as a release of the fmancing
statement or assignment.

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A sale of real property under a power of sale in a mortgage or deed of trust must be made not
later than four years after the date the cause of action accrues . Generally, the cause of action
accrues on the maturity date of the debt. Upon expiration of the four-year limitations period, the
real property lien and any power of sale to enforce the lien are void. The running of the statute of
limitations is not suspended against a bona fide purchaser. An examiner who does not have notice
or knowledge of the suspension of the limitations period (e.g., unrecorded extension agreement)
may assume that the lien is unenforceable when a cause of action on an outstanding real property
lien has accrued for more than four years, except as provided by the provisions governing
suspension in the event of death. Tex. Civ. Prac. & Rem . Code Ann. §§ 16.035, 16.036, 16.062.
If a series of notes or obligations or a note or obligation payable in installments is secured by
a real property lien, the four-year limitations period does not begin to run until the maturity date
of the last note, obligation, or installment. The limitations period in the preceding paragraph is not
affected by the Uniform Commercial Code provision containing limitations periods applying to
negotiable instruments. Cf., Tex. Civ . Prac. & Rem. Code Ann. § 16.035 and Tex. Bus. & Com.
Code Ann.§ 3.118.
If a promissory note is payable on demand, there are two limitations periods. A promissory
note is "payable on demand" if it states that it is payable on demand, payable at sight, or
otherwise indicates that it is payable at the will of the holder, or does not state any time for
payment. Tex. Bus. & Com. Code Ann. § 3.1 08. If demand for payment is made to the maker, an
action to enforce payment must be commenced within six years after the demand. However, if no
demand for payment is made, an action to enforce the note is barred if neither principal nor
interest on the note has been paid for a continuous period of ten years. See Tex. Bus . & Com.
Code Ann. § 3.118(b). Note, however, that prior to the amendment of§ 3.118, effective May 22,
2001 , Texas case law held that the limitations period for a demand note began to run on the date
the note was made. See, e .g., G & R Inv. v. Nance, 683 S.W .2d 727 (Tex. App.- Houston [14th
Dist.] 1984, writ refd n.r.e.). Although enforcement of a lien may be barred by the four-year
limitations period (under§ 16.035 Tex. Civ. Prac. & Rem . Code Ann.), payment of the debt may
continue to be enforceable as an unsecured debt provided an action to enforce payment is
commenced within the limitations periods set forth in Tex. Bus. & Com. Code Ann. § 3.118;
Aguero v. Ramirez, 70 S.W .3d 372 (Tex. App .-Corpus Christi 2002, pet. denied).
A party primarily liable for an obligation secured by a real property lien may suspend the
rutming of the four-year limitations period through a written extension agreement. Regarding that
party's interest, the limitations period is suspended, and the lien remains in effect for four years
after the extended maturity date of the obligation if the extension agreement is signed,
acknowledged, and filed for record in the county clerk's office of the county where the real
property is located. A lien may be further extended by additional extension agreements. The
maturity date stated in the original instrument or in the recorded renewal and extension is
conclusive evidence of the maturity date of the debt or obligation. This limitation period is not
affected by the Uniform Commercial Code limitations provision governing notes and other
negotiable instruments. Tex. Civ. Prac. & Rem. Code Ann. § 16.035; Tex. Bus. & Com. Code
Ann. §3.118.
Although valid between the parties, an oral extension of a note is not effective against a third
party. An extension agreement is invalid as to a bona fide purchaser for value, a lienholder, or a
lessee who deals with real property affected by an extended real property lien without actual
notice of the extension agreement and before the agreement is filed for recordation. Tex. Civ.
Prac. & Rem. Code Ann.§ 16.037.
If the maturity date of the debt is omitted from a deed of trust, the deed of trust is read
together with the underlying note as if the two constituted one instrument. Cadle Co. v. Butler,
951 S.W .2d 901 (Tex. App.-Corpus Christi 1997, no writ). An omission of the date of maturity
does not toll the statute of limitations for the payment of the debt. The limitations period begins to

91

run on the date the last installment payment is due, even if not stated in the deed of trust.
Swedlund v. Banner, 970 S.W.2d 107 (Tex. App.-Corpus Christi 1998, pet. denied).
For the removal of abstract of judgment liens clouding homesteads, see Standard 15.30.
Caution:
If payment of the existing indebtedness is not made by the debtor, but by another creditor as a
part of a legitimate b~siness transaction, the lien is not extinguished. Instead, the lien is
transferred to the new creditor. Baccus v. Westgate Management Corp., 981 S.W. 2d 383 (Tex.
App.- San Antonio 1998, pet. denied); Chicago Title Ins. v. Lawrence Invest., 782 S.W.2d 332
(Tex. App. -FortWorth 1989, writref'd).
Federal Agencies: If a lien is held by the United States or any agency of the United States,
Texas statutes prescribing limitations periods generally do not apply to foreclosure of the lien.
Farmers Home Administration v. Muirhead, 42 F.3d 964 (5th Cir. 1995). See 12 U.S.C.A. §
1821(d)(l4), enacted as part of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 (FIRREA), and 28 U.S.C.A. § 2415(a); Jackson v. Thweatt, 883 S.W.2d 171 (Tex. 1994);
Cadle Co. v . Estate of Weaver, 883 S.W.2d 179 (Tex. 1994); Jon Luce Builder, Inc. v. First
Gibraltar Bank, 849 S.W.2d 451 (Tex. App.-Austin 1993, writ denied). Unless the lien is no
longer enforceable under federal law, an examiner should require a release of any lien held by the
United States, any agency of the United States, or any assignee of such a lien.
Property Acquired By Farm Credit System: After January 6, 1988, agricultural real estate
acquired by an institution of the Farm Credit System (a Federal Land Bank, a Farm Credit Bank
or a Production Credit Association) as a result of a loan foreclosure or a voluntary conveyance
from a borrower is subject to a right of first refusal vested in the " previous owner" to repurchase
or lease the property. A " previous owner" is the person or entity from which or from whom the
Farm Credit System lender acquired title. If the previous owner waived his right of first refusal,
the original or an authentic copy of the executed waiver should be furnished and recorded. See 12
U.S.C.A. § 2219a (Farm Credit Act of 1971, § 4.36, as amended by Agricultural Credit Act of
1987, Pub. L . No. 100-233 (January 6, 1988), tit. I. § 108, 101 Stat. 1582 and Agricultural Credit
Technical Corrections Act of 1988, Pub. L. No. 100-399 (August 17, 1988), tit. I, § 104, 102
Stat. 990).
Property Acquired By Farmers Home Administration: After January 6, 1988, agricultural real
estate acquired by the Farmers Home Administration as a result of a loan foreclosure or a
voluntary conveyance from a borrower is subject to a number of rights and preferences in favor of
the borrower, and certain other entities (e.g., the party from which or from whom the Farmers
Home Administration acquired title), to repurchase or lease the property. The examiner should be
furnished satisfactory evidence that, in compliance with the applicable statutes, regulations and
cases, the Farmers Home Administration has either obtained waivers from the borrower and other
protected entities, or has complied with the appropriate notice procedures, and that all
administrative appeal rights, if any, have been exhausted. See 7 U.S.C.A. § 1985 (Consolidated
Farm and Rural Development Act, Pub. L. No. 87-128 (August 8, 1961), tit. VII, § 335(c), 75
Stat. § 315, as amended by Agricultural Credit Act of 1987, Pub. L. No. 100-233 (January 6,
1988), tit. VII, § 610, 101 Stat. 1568); 7 C.F.R. § 1951.911; Food, Agricultural, Conservation and
Trade Act ofl990, Pub. L. No. 101-624 (November 28, 1990), 103 Stat. § 3359.
Source:
Citations in the Comment.
History:
Adopted, June 13, 2003 .
Standard 15.110. Lis Pendens
The existence of a lis pendens notice requires the examiner to inquire as to the nature of the
cause of action, evaluate whether the pending litigation may be relevant to the interests under

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examination, and advise the client regarding any actions that are appropriate to the purpose of the
examination.
Comment:
The filing of a lis pendens notice gives notice of a pending cause of action involving eminent
domain, title to real property, establishment of an interest in real property, or enforcement of an
encumbrance against real property. The party filing a lis pendens, or the party' s agent or attorney,
must sign the lis pendens, stating:
(1) the style and number, if any, of the proceeding;
(2) the court in which the proceeding is pending;
(3) the names of the parties;
(4) the kind of proceeding; and .
(5) a description of the property affected.
Tex. Prop. Code Ann. § 12.007; Prappas v. Meyerland Community Improvement Assoc., 795
S.W.2d 794 (Tex. App. -Houston [14th Dist.] 1990, writ denied); King v. Tubb, 551 S.W .2d 436
(Tex. Civ. App.- Corpus Christi 1977, no writ).
Tex. Prop. Code Ann. § 12.007(c) provides that the county clerk shall record the notice in a
lis pendens record and shall index the record in a direct and reverse index under the name of each
party to the proceeding.
Effective September 1, 2009, a person who files a notice of lis pendens must serve a copy of
the notice on each party to the action who has an interest in the real property affected by the
notice. The notice must be served not later than the third day after the person files the notice. Tex.
Prop. Code Ann. § 12.007(d).
Effective September 1, 2009, a court may order eX:pungement of a notice of lis pendens if the
lis pendens claimant cannot establish a real property claim or has not given the required notice.
Tex. Prop. Code Ann. § 12.0071. After a certified copy of an order expunging the notice of lis
pendens is recorded, the notice of lis pendens and any information derived from the notice:
(1) does not: (A) constitute constructive or actual notice of any matter contained in
the notice or of any matter relating to the proceeding; (B) create any duty of inquiry in a
person with respect to the property described in the notice; or (C) affect the validity of a
conveyance to a purchaser for value or of a mortgage to a lender for value; and (2) is not
enforceable against a purchaser or lender described in Subdivision (l)(C), regardless of
whether the purchaser or lender knew of the lis pendens action.

Id.
Tex. Prop. Code Ann. § 12.008 contains provisions regarding cancellation of a lis pendens.
Tex. Prop. Code Ann. § 13.004 provides:

-

(a) A recorded lis pendens is notice to the world of its contents. The notice is effective
from the time it is filed for record, regardless of whether service has been made on
the parties to the proceeding.
(b) A transfer or encumbrance of real property involved in a proceeding by a party to the
proceeding to a third party who has paid a valuable consideration and who does not
have actual or constructive notice of the proceeding is effective, even though the
judgment is against the party transferring or encumbering the property, unless a
notice of the pendency of the proceeding has been recorded under that party's name
in each county in which the property is located.
A properly filed lis pendens notice effectively prevents a grantee from being an innocent
purchaser. The doctrine does not void a conveyance during the pendency of a suit, but the interest

93

of the grantor merely passes subject to the results of the cause. Cherokee Water Co. v. Advance
Oil & Gas Co., 843 S.W.2d 132 (Tex. App.-Texarkana 1992, writ den.). The lis pendens notice
is considered part of the judicial process, and the resulting absolute privilege bars a suit for
damages arising from the filing of the lis pendens. Bayou Terrace Inv. Corp. v. Lyles, 881
S.W.2d 810 (Tex. App.-Houston [1st Dist.] 1994, no writ).
Caution:
A lis pendens only gives constructive notice while the underlying cause of action is pending
and has no existence separate and apart from the litigation of which it gives notice. Taliaferro v.
Smith, 804 S.W.2d 548 (Tex. App.-Houston [14th Dist.] 1991, no writ); Wagner v. Oliver, 256
S.W. 302 (Tex. Civ. App.- Amarillo 1923, writ dism'd). However, a lis pendens notice is rarely
released and may remain on record many years after the litigation is terminated. Thus, unless the
underlying litigation has been dismissed or resolved, an unreleased lis pendens continues to cloud
title, regardless of its age.
Source:
Citations in the Comment.
History:
Adopted, June 13, 2003 .
CHAPTER XVI
FORECLOSURES

Standard 16.10. Nonjudicial Foreclosure
An examiner must determine that all statutory and contractual requirements for a nonjudicial
foreclosure sale have been satisfied. Specifically, an examiner must determine (l) that the
security instrument confers the power of sale; (2) that there has been a default under the terms of
the instrument; (3) that the trustee or substitute trustee was properly appointed; (4) that all
statutory requirements in effect at the time of sale have been met; (5) that all additional
requirements, if any, contained in the security instrument have been met; and (6) that a trustee' s
deed has been delivered.

Comment:
The first determination must be made from an examination of the security instrument. The
other determinations may be made by examining the trustee's deed and other related instruments
that may be available or of record. These may include an affidavit by the trustee, a copy of the
notice of the trustee' s sale, and an appointment of substitute trustee.
Ordinarily, the examiner may determine default from the recitals in affidavits accompanying
or incorporated in the trustee's deed. If not, the examiner must search for other evidence or take
into consideration other factors, such as the passage of time since the foreclosure.
The trustee or trustees are customarily appointed in the security instrument. The provisions
for the appointment of a substitute trustee are usually set out in the security instrument, and the
beneficiary must strictly comply with these provisions. Slaughter v. Qualls, 162 S.W.2d 671
(Tex. 1942); Michael v. Crawford, 193 S.W . 1070 (Tex. 1917). If the instrument makes no
provision for appointment of a substitute trustee, the district court is authorized to appoint one, in
which case the examiner should review the proceedings for the appointment.
In addition to the statutory requirements, there must be strict compliance with any other
requirements the security instrument may contain pertaining to foreclosure. See, e.g., Ogden v.
Gilbraltar Sav. Ass'n, 640 S.W.2d 232 (Tex. 1982); Houston First American Sav. v. Musick, 650
S.W.2d 764 (Tex. 1983).
The trustee's deed must contain all of the formalities of a deed, disclose the status of the
grantor as a trustee, and be delivered. Delivery may be presumed from recordation. Once the

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foreclosure sale is complete, the trustee may not rescind the foreclosure nor cancel the trustee's
deed. Bonilla v. Roberson, 918 S. W. 2d 17 (Tex. App.-Corpus Christi 1996, no writ).
An examiner may rely on recitals in appropriate circumstances. See Standards 13.20 and
13.40, pertaining to recitals. Where the security instrument expressly provides that the recitals in
the trustee 's deed are evidence of the facts therein stated, a presumption arises that the recitals are
true. Adams v. Zellner, 183 S.W. 1143 (Tex. 1916); Birdwell v. Kidd, 240 S.W.2d 488 (Tex. Civ.
App.-Texarkana 1951, no writ). An examiner may also be aided by the statutory requirement that
an action to recover property conveyed by an instrument signed by a trustee without record of the
authority of the trustee or proof of the facts recited in the instrument must be brought within four
years of the date that the instrument was "recorded," if it was recorded before September 1, 2007,
or within two years of the date that the instrument was "filed for record," if it was filed on or after
Se£tember 1, 2007. Tex. Civ. Prac. & Rem. Code Ann. § 16.033(a)(7). Act of June 15, 2007,
80 Leg., R.S., ch. 819, § 2, 2007 Tex. Gen. Laws 1695 (nonretroactivity provision).
Statutory History: Tex. Prop. Code Ann. § 51.002 (formerly codified as Tex. Rev. Civ. Stat.
Ann. art. 381 0) sets out the current procedures that must be followed for sale of real estate under
a power of sale conferred by a deed of trust or other contract lien. Texas law pertaining to
nonjudicial foreclosure as initially enacted did not change substantially until1976.
The basic statutory requirements for sales prior to January 1, 1976, are as follows : A Notice
of Sale must be posted for three consecutive weeks prior to the day of sale in three public places
in the county or counties where the sale is to be made, but one notice must be posted at the
courthouse door of each county where any part of the land is located. If the property is located in
more than one county, then the Notice of Sale must be given in all counties and must designate
the county where the sale will be made. The sale must be public and held between the hours of
10:00 A.M. and 4:00P.M. on the first Tuesday in any month. Upon written application, the owner
may require that the land be sold as provided in the security instrument.
For sales held on or after January 1, 1976, and prior to January 1, 1984:
The basic requirements remain the same except as follows. The Notice of Sale requirement
was changed to require posting for at least 21 days preceding the date of sale at the courthouse
door of the county where the property is located. If the property is located in more than one
county, the Notice of Sale must be posted in each county in which the property is located. The
provisions allowing the owner to demand sale in accordance with the security instrument were
not carried forward; however, as previously established, to the extent that the provisions of the
security instrument do not conflict with the statutory requirements, the provisions of the security
instrument must also be met.
For sales held on or after January l , 1984, and prior to January 1, 1988:
The basic requirements remain the same except as follows. In addition to the requirements
prior to January 1, 1984, the Notice of Sale must also be filed in the office ofthe county clerk of
each county where the subject property is located 21 days preceding the sale. (On or after January
1, 1984, and prior to October 2, 1984, the Notice of Sale had to be filed only with the county
clerk of the county where the sale was to be held.) In addition, the holder of the debt must give
Notice of Sale to the debtor 21 days preceding the sale by certified mail, which is accomplished
when sent to the debtor's most recent address as shown by the records of the holder and deposited
in the mail, postage paid. An affidavit of mailing stating the date of mailing, debtors, and
addresses is prima facie evidence that this notice requirement was met.
For sales held on or after January 1, 1988, and prior to September 1, 1993:
The basic requirements remain the same except as follows. In addition to the requirements
prior to January 1, 1988, the county commissioners shall designate the area at the courthouse
where foreclosure sales are to take place and shall record this designation in the real property
records. All sales must occur in this area. The sale must not begin prior to the time stated in the
Notice of Sale nor later than three hours thereafter. If the subject property is the residence of the
debtor, notice of default must be given to the debtor by certified mail to the debtor's last known

95

address giving the debtor at least 20 days to cure the default before Notice of Sale can be given.
Prima facie evidence of notice of default may be established by affidavit of mailing showing the
date of mailing, debtors, and addresses.
For sales held on or after September 1, 1993, and prior to January 1, 2004:
The basic requirements remain the same except as follows . The following statutory
clarifications were made, effective September 1, 1993. Regarding the Notice of Sale, the entire
calendar day on which the Notice of Sale is given is included in computing the 21-day notice
period and the entire calendar day of the foreclosure sale is excluded. In the case of a debtor's
residence, the entire calendar day on which notice of default is given is included in computing the
20-day notice period and the entire calendar day on which notice of sale is given is excluded in
computing the 20-day notice period.
For sales held on or after January 1, 2004, and prior to June 17, 2005 :
The basic requirements remain the same except that a " mortgage servicer" is given authority
to perform certain prerequisites to foreclose on behalf of a holder of the debt.
For sales held on or after June 17, 2005, and prior to September 1, 2005:
The basic requirements remain the same, except that by a recorded designation of the
commissioners court the location of the place of sale may be a public place other than an area at
the courthouse.
For sales held on or after September 1, 2005 :
The basic requirements remain the same except as to the appointment of substitute trustees
and the notices required under Tex. Prop. Code Ann. §§ 51.002, 51.0025.
For sales held on or after June 15, 2007:
The basic requirements remain the same except: (1) if the courthouse or county clerk' s office
is closed because of inclement weather, natural disaster, or other act of God, a notice required to
be posted or ftled may be posted or filed up to 48 hours after the courthouse or county clerk's
office reopens, Tex. Prop . Code§ 5l.002(b-1); (2) a sale may not be held at an area designated by
the county commissioners other than an area at the courthouse before the 90th day after the date
the designation is recorded, Tex. Prop. Code Ann. § 5l.002(h); (3) one or more persons may be
authorized to execute the power of sale under a security agreement, Tex. Prop. Code Ann. §
51.0074; and (4) the purchase price is payable immediately upon acceptance of the bid, Tex.
Prop. Code Ann. § 5l.0075(f).
For sales held on or after September 1, 2009, the basic requirements remain the same except:
(1) the purchase price in a sale by a trustee or substitute trustee is due and payable "without
delay" on acceptance of the bid, or (2) "within such reasonable time as may be agreed upon by
the purchaser and the trustee or substitute trustee if the purchaser makes such request for
additional time to deliver the purchase price." Payment is no longer required to be paid
"immediately" upon acceptance of the bid. Tex. Prop. Code Ann. § 5l.0075(f).
Home Equity and Reverse Mortgage Foreclosures: Not all of the above provisions apply to
home equity and reverse mortgage foreclosures, and there are additional requirements. See
Standard 16.30.
Condominiums: A power of sale conferred by statute or contained in a condominium
declaration is sufficient to foreclose by sale an assessment lien, unless the assessment consists
solely of fmes. There is a right of redemption within 90 days for residential property. Tex. Prop.
Code Ann. § 82.113 .
Property Owners' Association: A dedicatory instrument or restrictions of a residential
property owners' association may provide for nonjudicial foreclosure of a lien for assessments,
but the association may not foreclose a lien solely for fmes or attorney's fees relating to fines .
The association must send the owner written notice not later than 30 days after the foreclosure
sale informing the owner of the right of redemption. A residential debtor has a right of
redemption within 180 days after the association has mailed a written notice to the owner
informing the owner of the sale and right of redemption. Tex. Prop. Code Ann. § 209.011.

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Effective September 1, 2009, a property owners' association that conducts a foreclosure sale must
also send written notice by certified mail, return receipt requested, to each lot owner and each
lienholder of record not less than the 30th day after the date of the foreclosure sale informing them
of their right to redeem. Tex. Prop. Code Ann. § 209.010. The owner or a lienholder of record
may redeem the property from any purchaser at the foreclosure sale not later than the 1801h day
after the date the association mails written notice of the sale to the owner and lienholder. A
lienholder of record may not redeem the property before 90 days after the association mails
written notice of the sale to the lot owner and the lienholder and then only if the lot owner has not
previously redeemed. Tex. Prop. Code Ann. § 209.011.
The statute of limitations for foreclosure of a lien runs four years from date of maturity of the
obligation, unless otherwise tolled. The trustee' s authority expires when the debt is barred;
therefore, a sale subsequent to the running of the statute of limitations is void. Stubbs v. Lowrey' s
Heirs, 253 S.W. 2d 312 (Tex. Civ. App.-Eastland 1952, writ ref'd n .r.e.). Moreover, the statute of
limitations begins to run when a note is accelerated, Curtis v. Speck, 130 S.W.2d 348 (Tex. Civ.
App.-Galveston 1939, writ ref' d) or, for lien foreclosure purposes, when the note is executed if it
is a demand note, Seaman v. Seaman, 425 S.W.2d 339 (Tex. 1968), unless demand is specifically
required in the instrument. Loomis v. Republic Nat'I Bank, 653 S.W. 2d 75 (Tex. App.-Dallas
1983, writ ref'd n.r.e.). If the deed of trust itself does not state the maturity date of the note, then
the note itself must be examined. An extension of the maturity date of the note extends the period
of time for foreclosure. Southland Life Ins. Co. v . Egan, 86 S.W. 2d 722 (Tex. 1935). Tex. Civ.
Prac. & Rem. Code Ann. § 16.036 prescribes the requirements for a valid extension. To be
effective as to a bona fide purchaser, a lienholder, or lessee without actual notice, the extension
must be recorded. ld. § 16.037.
Caution:
Even though a federal tax lien may be subordinate to the lien of the security instrument being
foreclosed, a federal tax lien is not cut off by the foreclosure unless there has been compliance
with I.R.C. § 7425 . Thus, where an unreleased subordinate federal tax lien has been filed or
recorded more than 30 days prior to the date of the foreclosure sale, the examiner must determine
either that the notice of lien has expired (I.R.C. § 6323) or that the Internal Revenue Service was
notified in compliance with I.R.C. § 7425 . If the examiner determines that this notice was given
by mail, the examiner should confirm that the mailing complied with I.R.C. § 7502 and the
applicable regulations, 26 C.F.R. § 301.7502-1. If notified, the Internal Revenue Service has the
right to redeem foreclosed property for a period of 120 days after the date of sale. ld. § 7425(d). If
the required notice is not given, any transfer remains subject to the federal tax lien. Id. § 7425
(b)(1). In making the determination that the Internal Revenue Service was properly notified, the
examiner may consider (a) a copy of the notice, (b) an affidavit of mailing, (c) recitals in the
trustee's deed, and (d) a receipt from the United States Postal Service indicating that the notice
was timely sent to the Internal Revenue Service or other evidence that the Service received timely
notice. However, the Service is not bound by affidavits of mailing and recitals.
The filing of a petition in bankruptcy generally results in an automatic stay against the
enforcement of a lien and any action to obtain possession of property of the bankrupt estate. 11
U.S.C. §§ 362, 922. An examiner who becomes aware of a bankruptcy filing should require
evidence that the stay was lifted.
The Servicemembers Civil Relief Act of 2003, formerly the Soldiers' and Sailors' Civil Relief
Act of 1940, as amended by the Housing and Economic Recovecy Act of 2008, prohibits
foreclosure of property against an owner who acquired the property before militacy service and
who is currently in the militacy service of the United States or has been in the military service
within a specified number of days prior to the attempted foreclosure. These limitations do not
apply to obligations that were incurred during military service. 50 U.S .C. App. §§ 511 , 517, 527,
533.

97

The foreclosure of a mortgage for which a notice of default was given on or after June 19,
2009, on a dwelling owned by a military servicemember on active duty may not be conducted
during the servicemember' s period of active duty or within nine months after the
servicemember's service period unless the foreclosure is conducted under a court order or unless
an agreement with the servicemember waiving the servicemember's rights is executed during or
after the servicemember's period of active duty. These limitations apply only to an obligation that
is secured by a dwelling, whether real or personal property, owned by a military servicemember,
that originated before the date on which the servicemember's active duty commenced. Tex. Prop.
Code Ann. §§ 51.002(d), 51.015.
Source:
Citations in the Comment.
Tex. Prop. Code Ann. § 51.002.
John M. Nolan & Michael F. Alessio, Texas Annotated Deed of Trust, Univ. Tex. 38th
Annual Mortgage Lending Inst. (2004).
History:
Adopted: June 25, 2004.

Standard 16.20. Judicial Foreclosure and Execution Sales
When title is based on a court' s foreclosure of a lien or an execution sale, an examiner may
rely on the deed of the officer who conducted the sale only after verifying the existence and
apparent validity of the judgment conferring authority to make the sale and of the order of sale or
writ of execution and levy.
Comment:
A deed by an officer, typically a sheriff or constable, purporting to convey a judgment
defendant's interest in real property may form an essential link in the chain of title under
examination. Sheriffs' deeds are commonly encountered in two situations: those involving the
judicial foreclosure of liens and those resulting from execution on money judgments. A
foreclosure judgment describes the specific property upon which the plaintiff's lien is being
foreclosed and orders it sold, whereupon the court clerk issues an order to any sheriff or constable
within the State of Texas, directing the officer to seize and sell the property described in the
judgment, first giving public notice of the time and place of sale. Tex. R. Civ. P. 309 and 631. An
execution sale requires the clerk's issuance of a writ of execution, likewise directed to any sheriff
or constable, specifying the sum recovered and due and the interest rate, and requiring the officer
to satisfy the judgment and costs out of the defendant's property. Tex. R. Civ. P. 622 and 630.
The officer indorses the levy on the writ, using a sufficient legal description. Tex. R. Civ. P. 639;
see Riordan v . Britton, 7 S.W . 50 (Tex. 1887). The manner in which the officer effects the sale of
the defendant's property is essentially the same in either case. The defendant's property is sold at
public auction, after advertisement by newspaper publication, at the courthouse door of the
county where situated, on the first Tuesday of any month between the hours of 10:00 A.M. and
4:00 P.M. Tex. R. Civ. P. 646a and 647. Once the sale has been made and its terms complied
with, the officer must execute and deliver to the purchaser a conveyance of all the right, title, and
interest the defendant had in the property sold. Tex. Civ. Prac. & Rem. Code Ann. § 34.045.
Three documents should be represented in the record under examination: (1) the court's
judgment, (2) the clerk' s order of sale or writ of execution and levy, and (3) the sheriff's or
constable's deed resulting from the sale. Unless the sale is conducted pursuant to the court's
authority, a sheriff's or constable's deed conveys no title. Mills v. Pitts, 48 S.W.2d 941 (Tex.
1932). For this reason it is essential to the establishment of title that the court's judgment and the
order of sale or writ of execution and levy be examined. See Tudor v. Hodges, 9 S.W. 443 (Tex.
1888); Atkinson v. Dailey, 238 S.W.2d 584, 587 (Tex. Civ. App.-Amarillo 1951, no writ). The

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only exception is where the requisite court records are unavailable and the sheriff's deed qualifies
as an ancient document, in which case the examiner may rely on recitals in the deed. W. T. Carter
& Bro. v. Bendy, 251 S.W. 265 (Tex. Civ. App.-Beaumont 1923), aff'd, 269 S.W . 1037 (Tex.
Comm 'n App. 1925, judgm' t adopted); Sledge v. Craven, 254 S.W.2d 888 (Tex. Civ. App.Galveston 1953, no writ). If necessary, the authority for the deed may be established by
secondary evidence. Richards v. Rule, 207 S.W. 912 (Tex. Comm'n App. 1919, judgm' t
adopted). See the Comment to Standard 13.40 regarding recitals and ancient documents
generally.
Moreover, the judgment upon which the sale is based must be a valid one. A sale based on a
void judgment is likewise a nullity. For example, where a judgment of foreclosure describes the
land too indefinitely to identify it, the sheriff's deed made pursuant to it conveys no title even if
the deed contains an adequate description. Adams v. Duncan, 215 S.W.2d 599, 603- 604 (Tex.
1948). A title examiner must therefore be satisfied that the court had jurisdiction to enter the
judgment and that the sale complied with the court' s order. Because recitals in a judgment are
conclusive against anything else in the record on collateral attack, they ordinarily may be
regarded as sufficient without further inquiry into the record. Levy v. Roper, 256 S.W. 251 (Tex.
1923); see Pure Oil Co. v. Reece, 78 S.W.2d 932 (Tex. 1935); Crawford v. McDonald, 33 S.W.
325, 327- 328 (Tex. 1895). If the judgment does not include such recitals, so that reference to the
rest of the record in the underlying proceeding becomes necessary, the judgment is still presumed
valid unless lack of jurisdiction or some other fatal defect affirmatively appears. Fitch v. Boyer,
51 Tex. 336, 344 (1879); Cox v. Campbell, 257 S.W.2d 462 (Tex. Civ. App.-Dallas 1953, writ
ref' d).The presumption that a judgment is valid is rebutted only if the record itself, uncontradicted
by recitals in the judgment, discloses facts showing the judgment void. Fowler v. Simpson, 15
S.W. 682 (Tex. 1891).
Although the officer's sale must comply with a valid judgment and order of sale or execution,
mere irregularities in the conduct of the sale will not invalidate it. Coffee v. Silvan, 15 Tex. 354
(1855); Hendron v. Yount-Lee Oil Co., 119 S.W.2d 171 (Tex. Civ. App.-Texarkana 1938, writ
ref d); see Howard v. North, 5 Tex. 290 (1849). For example, a return by the sheriff or constable
following the sale is not essential. It will be presumed from the judgment and the sheriffs deed
that the officer did his duty unless this is rebutted by proof to the contrary. Harris v. Mayfield,
260 S.W. 835 (Tex. Comm'n App. 1924, holding approved). For this reason a sheriff's deed may
be regarded as reliable if regular on its face. But if the record discloses that the officer acted
beyond his authority, the sale cannot be given effect. Mills v. Pitts , 48 S.W.2d 941 (Tex. 1932);
Howard v. North, 5 Tex. 290 (1849).
Unlike some other varieties of judicial sales, foreclosure and execution sales do not require an
order of confirmation after the sale. In the case of judicial foreclosures, the order of sale itself
authorizes the executing officer to place the purchaser in possession. See Tex. R. Civ. P. 309 and
310; Efficient Energy Systems, Inc. v. J. Hoyt Kniveton, Inc., 631 S.W.2d 538, 542 (Tex. App.El Paso 1982, no writ); Darlington v. Allison, 12 S.W.2d 839 (Tex. Civ. App.-Amarillo 1928,
writ dism 'd). Following an execution sale the officer is required to file a return of the sale with
the clerk of the court, Tex. R. Civ. P. 654, but it is well established that irregularities in the return,
or even the complete absence of a return, do not void the sale. See Willis v. Smith, 17 S.W. 247
(Tex. 1886); Donald v. Davis, 208 S.W.2d 571 , 573 (Tex. Civ. App.- Fort Worth 1948, writ
refd); Tyler v. Henderson, 162 S.W.2d 170, 174-175 (Tex. Civ. App.-Fort Worth 1942, writ
refd w.o.m.).
Caution:
On collateral attack, the rule that recitals in judgments control the rest of the record does not
apply to judgments against nonresidents of Texas . Pellow v. Cade, 990 S.W.2d 307 (Tex.
App .. Texarkana 1999, no pet.); Hicks v. Sias, 102 S.W. 2d 460 (Tex. Civ. App.-Beaumont 1937,
writ ref'd). Accordingly, if the defendant sought to be bound by a proceeding was not a Texas
resident, an examiner should review the entire record in the underlying proceeding.

99

Mter foreclosure of a real estate tax lien, the prior owner has the right to redeem the property
within 180 days; however, if the land is the residence homestead, is designated for agricultural
use, or is a mineral interest, the redemption period is two years . The redemption period runs from
the date the purchaser's deed is filed for record. Tex. Tax Code Ann. § 34.21. Note, however, that
the Texas Constitution provides that the former owner has a right to redeem within six months,
which may not be synonymous with 180 days, upon payment of the amount of money paid for the
property at foreclosure, including the tax deed recording fee and all taxes, penalties, interest, and
costs paid plus an amount not exceeding 25% of aggregate total. Tex. Const. art. VIII, § 13.
The own~r of property sold on foreclosure of a federal tax lien may redeem it within 180 days
after the sale. 26 U.S.C. § 6337(b)(1). The owner of property in a residential subdivision may
redeem property sold on foreclosure of a property owners' association' s assessment lien within
180 days after the association's mailing of notice of the sale to the owner. Tex. Prop. Code Ann. §
209.0ll(b). If a residential condominium unit is purchased by the unit owners' association on
foreclosure of the association' s lien for assessments, the owner may redeem the unit within 90
days after the foreclosure sale. Tex. Prop. Code Ann. § 82.113(g). Other types of lien foreclosures
are not subject to redemption after the sale has taken place.
An action to set aside a tax sale is subject to the limitations periods in Tex. Tax Code Ann. §§
33.54, 34.08.
Source:
Citations in the Comment.
4 Aloysius A. Leopold, Land Titles and Title Examination § 22.25-22.29 (Texas Practice 3d
ed. 2005); and 5 Id. § 28.14.
Gus M . Hodges, Collateral Attacks on Judgments, 41 Tex. L. Rev. 499 (1963).
History:
Adopted, June 13, 2003 .

Standard 16.30. Foreclosure of Home Equity Loans and Reverse Mortgages
An examiner must verify the judicial authority for foreclosures of home equity loans. An
examiner must verify the judicial authority for foreclosure of a reverse mortgage unless, before
the foreclosure, (1) all borrowers have died or have ceased to occupy the property for more than
twelve consecutive months, or (2) the property has been sold or otherwise transferred.
Comment:
Upon strictly limited terms, the Texas Constitution authorizes the mortgage of homestead
property to secure loans for purposes other than payment of purchase money, taxes, or the cost of
improvements. These are denominated as home equity loans, subject to Tex. Const. art. XVI, §
50(a)(6), and reverse mortgages, subject to Tex. Const. art. XVI, §§ 50(a)(7) and 50(k). Home
equity loans and reverse mortgages are similar in that the purpose of both is to allow homestead
mortgages without restriction on the use of the loan proceeds. The principal distinction between
the two types of loans, as defmed in the constitution, is that in the case of reverse mortgage, the
borrower or the borrower's spouse must be at least 62 years old, and no payment of principal or
interest is generally required until the borrowers have died, the property is sold or otherwise
transferred, or the borrowers have ceased to occupy it for 12 months. Except in the case of
reverse mortgages that are foreclosed after all borrowers have died or have ceased to occupy the
property for 12 consecutive months, or after the homestead property has been sold or otherwise
transferred, both types of liens may be foreclosed only after a court order. Tex. Const. art. XVI,
§§ 50(a)(6)(D), 50(k)(ll ).
Under Tex. R. Civ. P. 735 a party seeking an order to foreclose such a lien may either (1)
seek judicial foreclosure, (2) pursue a suit for an order allowing foreclosure under the security
instrument, or (3) apply for an order allowing foreclosure under the security instrument using the

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expedited procedure prescribed by Tex. R . Civ. P. 736. See Standard 16.20 concerning judicial
foreclosure. If the property has been sold by a trustee appointed in the deed of trust securing the
loan, the examiner must examine the court proceeding and verify the validity of the order
authorizing the lender to proceed with foreclosure, unless one of the above mentioned exceptions
relevant to reverse mortgages applies.
Tex. R. Civ. P. 735 and 736 both contemplate that any sale will be conducted in compliance
with Tex. Prop. Code Ann. § 51.002. For guidance, see Standard 16.10 concerning nonjudicial
foreclosure. Both home equity loans and reverse mortgages are subject to a host of restrictions
and conditions. In particular, the validity of a lien securing a home equity loan depends on
circumstances that may not be easily verifiable from recorded documents. However, if the
mortgage document discloses that the loan is the type defined by Section 50(a)(6) of Article XVI
of the Texas Constitution, a purchaser for value without actual knowledge, other than the lender
or its assignee, may conclusively presume the validity of a home equity mortgage lien. Tex.
Canst. art. XVI, § 50(i).
A reverse mortgage that permits nonjudicial foreclosure may be foreclosed without a court
order only if the borrowers have all died or ceased to occupy the property for more than twelve
consecutive months or if the property has been sold or otherwise transferred. Note that these facts
may not be apparent from an examination of the record. The examiner may verify the requisite
circumstances through death certificates, affidavits or other means. See Standard 13.20 regarding
reliance on affidavits generally.
Caution :
For guidance regarding the customs and practices of home equity mortgage loans, see the
Joint Financial Regulatory Agencies Home Equity Lending Rules. Tex. Admin. Code, Title 7,
Part 8, Chapters 151, 153. See also Tex. Canst. art. XVI, § 50(u); Tex. Fin. Code Ann. §§ 11.308,
15.413 .
There is scant reported authority construing the constitutional provisions allowing home
equity loans and reverse mortgages and the rules for their foreclosure. The examiner should be
extremely cautious in passing on any deviation from the rules. See LaSalle Bank v. White,
246 S.W.3d 616 (Tex. 2007) (applying the doctrine of equitable subrog ation even though
the loan violated the const itutional provision prohibiting a home equity loan from being
secured by homestead property designated for agricultural use).
An order obtained in an "expedited" foreclosure proceeding under Tex. R. Civ. P. 73 6,
authorizing a mortgagee to proceed with sale on foreclosure of a home equity loan or reverse
mortgage, is not res judicata and does not constitute collateral estoppel or estoppel by judgment in
any other proceeding. Tex. R. Civ. P. 736 (9). Such an order, it would seem, is therefore not
entitled to the presumptions usually accorded judgments rendered in judicial foreclosures. See the
Comment to Standard 16.20.
Source:
Citations in the Comment.
15 Mike Baggett, Texas Foreclosure: Law and Practice §§ 2.176, 2.191 (Texas Practice
2001).
History:
Adopted, June 13, 2003.

Standard 16.40. Deeds in Lieu of Foreclosure
When examining a deed taken by a lienholder in satisfaction of its secured debt, the examiner
should consider the possible right of redemption of a junior lienholder and the validity of a
subordinate interest created during the existence of the extinguished debt.

101

·Comment:
Frequently a mortgagor will convey mortgaged land to a mortgagee in satisfaction of the
debt. These conveyances, commonly called deeds in lieu of foreclosure, are sometimes taken, not
only to avoid the problems inherent in foreclosures, but in the belief that they extinguish all
subordinate liens and interests. The intended result does not always follow.
If there are senior and junior liens, and if the holder of the senior lien accepts a deed in
satisfaction of the debt secured by that lien, there is a question of whether the lien merges into the
fee simple title. If there is a merger of title, the grantee would own the land subject to a new first
lien held by the original junior lienholder. However, if the mortgagee did not intend that a merger
occur, but rather that the lien remain in existence, there will be no merger. As a merger would
most commonly be disadvantageous to the mortgagee, unless there is evidence that the parties
intended a merger, Texas courts assume that no intent to merge existed and none will result. The
junior lienholder will thereafter have a right to redeem within a reasonable period of time. See
North Texas Building & Loan Ass'n v. Overton, 86 S.W.2d 738 (Tex. 1935).
Because of the judicial presumption that no merger has occurred, a provision in a deed that
none is intended is not necessary; however, practitioners commonly insert language to that effect.
Subordinate interests other than junior liens present additional concerns. If a mortgagor
conveys the land or an interest in land subject to an existing lien to a third party prior to a deed in
lieu of foreclosure, the effect upon the third-party's interest depends upon whether the lien is a
vendor's lien. In a sale that retains a vendor's lien, title remains in the vendor until the purchase
price is paid. Among other remedies, the vendor may rescind the sale upon default in the payment
of the purchase price. Accordingly, before satisfaction of the vendor's lien, if the vendee transfers
an interest in the land to a third party and subsequently reconveys to the vendor, the third party is
left only with the vendee's right to redeem. The result is different where the security instrument
secures an obligation other than a vendor's lien. In that case, the debtor can convey the land or an
interest in the land to a third party, and the interest conveyed to the third party will not be affected
by a deed in lieu of foreclosure; however, the land or interest will remain subject to the original
lien. See Yett v. Houston Farms Development Co., 41 S.W.2d 305 (Tex. Civ. App.-Galveston
1931 , writ ref'd) (mineral deed); Flag-Redfern Oil Co. v. Humble Exploration Co., 744 S.W.2d 6
(Tex. 1987) (mineral deed).
The problems that might arise from accepting a deed in lieu of foreclosure were remedied
somewhat by Tex. Prop. Code Ann. § 51.006, which became effective on August 28, 1995. This
provision permits the holder of a debt under a deed of trust to void the deed within four years of
its date if the debtor did not disclose a lien or other encumbrance before executing the deed to the
holder of the debt and the holder had no personal knowledge of the undisclosed lien or
encumbrance. A third party may rely conclusively upon an affidavit of the holder stating that the
holder has voided the deed as provided in the section. Voiding a deed in lieu of foreclosure does
not affect the priority of the deed of trust. The holder may also foreclose the deed of trust without
voiding the deed in lieu of foreclosure.
Source:
Citations in the Comment.
SA Aloysius A. Leopold, Land Titles and Title Examination §38.7 (Texas Practice 3d ed.
2005).
Sara E. Dysart, The Continued Existence of Deeds in Lieu ofForeclosure in State Bar of Tex.
Prof. Dev. Prog., Advanced Real Estate Law Course (1989).
History:
Adopted, June 25,2004.

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PROPOSED TEXAS TITLE STANDARDS
EXECUTIVE EDITOR: EDWARD H. H ILL
EDITOR: OWEN L. ANDERSON
ASSISTANT EDITORS:
DOUGLAS W . BECKER, WILLIAM B. BURFORD,
A. W. CLEM, H. MARTIN GIBSON, JAMES L.
GOSDIN, MARl C. HALEY, CHARLES B.

Comment:
A legal description affords the mea ns of
identifying the land . Morrow v . Shotwell , 477
S .W .2d 538, 539 (Tex . 1972); W ilson v.
Fisher, 188 S .W.2d 150, 152 (Tex . 1945);
Chandler v . Kountze, 130 S.W.2d 327, 331
(Tex. Civ. App.-Ga lveston 1939, writ ref'd);
4 Aloysius A . Leopold , Land Titles and Title
Examination § 15.2 (3d ed. 2005). . A
conveyance in the chain of title that does
not identify the land under examination is
ineffective to pass title . Greer v . Greer, 191
S.W.2d 848 (Tex. 1946).

HARRIS, PETER E . HOSEY, JAN E . R E HLER,

GEORGE A. SNELL, Ill, RODERICK E. WETSEL

-

The current Texas Title Standards appear
as the Appendix to Title 2 of the Texas
Property Code. In addition . they are also
accessible on the Section web page via the
internet.

The intention of the parties concerning the
identification of the land conveyed and its
boundaries is determined from the face of
the instrument in light of surrounding
circumstances. Stafford v. King, 30 Tex.
257 (1867). The intention of the parties to a
deed conta ining a metes and bounds
description is presumed to be the same as
that of the surveyor who surveyed the tract
Strong v. Sunray DX Oil Co., 448 S .W .2d
728 (Tex. Civ. App.-Corpus Christi 1969,
writ ref'd n.r.e:). The instrument need not
contain such a full description as will enable
the property to be ascertained without the
aid of extrinsic evidence. Chandler v .
Kountze, 130 S.W.2d 327 (Tex. Civ. App.Galveston 1939, writ ref'd) . However, the
description contained in an instrument must
furnish, within itself or by reference to other
existing writing , the means by which the
property can be identified with reasonable
certainty. Broaddus v . Grout, 258 S.W .2d
308 (Tex. 1953).
A legally sufficient
description depicts the tract's boundaries as
located on the ground by the surveyor.

The Title Examination Standards Joint
Editorial Board proposes the following: a
revision of Standard 5.10, new Standards
5.20 and 5 .30, and a revision of Standard
9 .10.

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Standard
Generally

5.10.

Land

The boundaries of a tract as originally
surveyed are descri bed by the field notes of
the surveyor and are commonly found in the
patent or other grant from the sovereign.
The footsteps of the original surveyor, if
they can be ascertained , should be
followed . Silver Oil & Gas, Inc. v. EOG
Resources, Inc., 246 S .W .3d 197 (Tex.
App.-San Antonio 2007, no pet. ). In the
case of a conflict between two or more

Descriptions

An examiner must determine whether each
land description in the chain of title is
sufficient to identify th.e land under
examination.

4

patented surveys, the senior (oldest) survey
controls over any junior (younger) survey.
/d. at 204 ("The description in a senior
survey controls when lo cating a line of that
survey over any junior survey of that line.
unless the evidence proves that the senior
survey is in error.").
When the senior
survey can be easily identified, a junior
survey cannot be made to control the senior
survey. Hill v. Whites ide, 749 S .W .2d 144,
151 (Tex. App.-Fort Worth 1988, writ
denied). If the actual boundary lines and
corners run by the original surveyor can be
found they are controlling, even if they are
inconsistent with the calls and references
found in the field notes. If the footsteps of
the original surveyor cannot be ascertained
with reasonable certainty, the surrounding
facts
and
circumstances
should
be
considered in order to arrive at the intent
and purpose of the surveyor. Silver Oil &
Gas. Inc. v. EOG Resources, Inc., 246 S.W.
3d 197 (Tex. App.-san Antonio 2007, no
pet.).

While any title is only as good as the
weakest link in the chain of descriptions,
practical considerations justify reliance upon
corrections or improved land descriptions
appearing in later conveyances and upon
the passage of time if no apparent
difficulties have arisen from a less than
perfect land description. Further, all matters
of record (e.g ., adjoining descriptions. other
land owned by the grantor. and the like)
may become sources of explanation for
what might be a dubious description by
itself. Pickett v. Bishop, 223 S .W .2d 222,
223 (Tex. 1949); Abercrombie v. Bright, 271
S .W.2d 734 (Tex. Civ. App.-Eastland
1954,
writ .ref'd
n.r.e.).
Likewise,
typographical mistakes and similar apparent
errors and omissions in land descriptions do
not detract from the obvious intent of
instruments.
Reserve Petroleum Co. v .
Harp, 226 S .W .2d 839, 841 (Tex. 1950);
Barnard v. Good, 44 Tex. 638 (1876);
Rhoden v. Bergman, 75 S.W.2d 993 (Tex.
Civ. App. -Beaumont 1934, writ refd);
Holman v. Houston Oil Co., 152 S.W. 885
(Tex. Civ. App.-Galveston 1912, writ
dism'd).

An examiner is not responsible for
identifying a boundary defect, such as an
encroachment or a survey conflict or error,
that is not apparent from the instruments
examined unless the examiner has other
notice of the defect.
Moreover, not all
boundary defects are apparent from the
record.

Where elements of the description conflict
or where the calls do not close, the
examiner may utilize rules of construction to
construe descriptive calls that are conflicting
or ambiguous. The order of dignity of calls
is summarized in the following provision
from the Texas Administrative Code , which
is consistent with Texas case law:

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 fa ils 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.

The order of dignity of calls in
a survey is as follows:
1.
Natural
objects
(rivers, etc.).
2.
Artificial
objects
(marked trees, stone
mounds,
adjoinder
calls, etc.).
Courses (bearings).
3.
4.
Distances.
5.
Acreage.
31 TEX. ADMIN. CODE § 7.5 (General Land
Office surveying rules for licensed state

5

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surveyors). See also, Frost v. Socony Mobil
O il Co., 433 S.W.2d 387 (Tex.· 1968)
(holding that calls to course and distance
control over mistaken calls for an unmarked
line which wa s not located on the ground);
Stafford v. King, 30 Tex. 257 (1867)
(recognizing that "[t]he general rules as to
controlling calls are : 1, natural objects; 2,
artificial objects; 3, cou rse and distance.") ;
Mahnke v. Greenwood , 915 S.W .2d 585
(Tex. App.-Houston [14th Dist.] 1996, no
writ) (holding that "[t}he law of legal
preferences gives dignity to calls in the
following order: (1) natural objects; (2)
artificial objects ; (3 ) course; and (4)
distance" and that where there is a
conflict, calls to natural objects will
prevail over calls to artificial objects.);
Cox v. Piwonka , 257 S.W .2d 955 (Tex. Civ.
App.-Galveston 1953, writ dism'd) (holding
that a line of a located survey is an artificial
object that controls over distance); Duff v .
Moore, 68 Tex. 270 (1887 ) (calls to an
adjoining tract shall control over d istance).
Calls for adjoinder prevail even if the
adjoinder is with an unmarked but
ascertainable line. Frost v. Socony Mobil Oil
Co ., 433 S.W . 2d 387 (Tex . 1968). An
exception exists if the call for adjoinder was
made upon mistake , apprehension , or
conjecture. Turner v. Smith. 61 S.W.2d 792
(1933). A call for course is considered more
reliable and will prevail over a call for
_ distance. Lilley v . Blum, 6 S.W .279 (1887).
Calls for quantity of acreage will be given
the least priority. Collins v. Warfield , 140
S .W . 107 (Tex. Civ. App.-Galveston 1911,
no writ). Nevertheless, if the instrument
shows that the parties intended that other
objects or calls should prevail, then their
intention should be given effect over the
usual order of priority or dignity.
Port
Aransas Properties . Inc. v. Ell is, 129 S.W.2d
699 (Tex. Civ. App.-San Antonio 1939, writ
dism 'd judgm 't co r.) ; Stuart v. Coldwell
Banke r & Co., 552 S .W .2d 904 (Tex. Civ.
App.-Houston [1st Dist.] 1977 . writ ref'd
n.r .e. ).

Global or blanket descriptions of all of the
grantor's rea l property wherever located in a
specified ci ty, county, or state are sufficient
to satisfy the Statute of Fraud s, even if other
tracts are also specifically described . Witt v.
Harlan, 2 S.W . 41 (Tex. 1886); Holloway's
Unknown He irs v. Whatley , 131 S .W.2d 89
(Te x. 1939). However, in J. Hiram M oore,
Ltd. v. Greer, 172 S.W . 3d 609 (Tex. 2005).
the deed at issue conta ined both a specific
description and a global description.
Because the specific description failed , the
court refu sed to enforce the global
description on the ground that the deed was
ambiguous. Moreover, a global or blanket
description is distinguishable from a "Mother
Hubbard'' or "cover-all" clause, which is
ordinarily construed as including in the
description only small strips of land adjacent
to the land described. Cf., J . Hiram Moore,
Ltd. v. Greer, 172 S.W .3d 609 (Tex. 2005);
Sun Oil Co . v. Burns, 84 S .W.2d 442 (Tex .
1935). Examiners should be aware that it is
not always easy to distinguish global or
blanket descriptions, which are broadly
construed , from Mother Hubbard or coverall clauses that apply only to small strips of
land. See Caution to Standard 15.10.
Boundaries may be established by means
other than through the calls recited in the
instrument, including by express agreement,
by the passage of time, or by the action or
acquiescence of the parties.
Written Agreements: Bou ndary lines may be
established by written agreement, but all
parties with an interest in the property must
join in the written agreement for it to be
effective as to all interests in the property.
The agreement must be filed for record with
the county clerk of the county where the
land is located to be binding upon
subsequent purchasers without notice .
Where the bou ndary separates two p latted
lots, a boundary agreement that includes a
conveyance of land may be valid between
the parties, but, absent replatting, th e
agreement
may
violate
subd ivision
regulations, leading to civil and criminal
penalties and possible denial of city and

6

utility services. TEX. LOC . GOV'T CODE ANN.

reasonable certainty. If extrinsic evidence is
necessary to determine the boundaries,
then the descriptive words in the deed, or
deeds, must furnish a basis or guide for its
admission .

§ 212.004.
Oral Agreements: Where the location of the
boundary described in the conveyance is
doubtful, uncertain, or disputed, the parties
may agree upon a division line through an
oral boundary agreement without violating
the Statute of Frauds. Duval County Ranch
Co. v. Foster, 318 S.W .2d 25 (Tex. Civ.
App.-San Antonio 1958, writ ref'd n.r.e.).
The oral agreement must be definite,
unconditional, and "executed" by the parties
through (1) erection of monuments on the
agreed line or by otherwise marking it and
by the actual and physical possession or
use to the line or (2) improving or
developing the property with reference to
the line.
Farmer v. Komfuehrer, 271
S.W 2d 501 (Tex. Civ. App.-San Antonio
1954, no writ).
Otherwise, an oral
agreement does not bind subsequent
purchasers.

Source:
Citations in the Comment.
4 Aloysius A. Leopold , Land Titles and
Title Examination, ch. 15 (3d ed . 2005).
History:
Adopted, June 27, 1997; amended,
_ _ , 2009 .
Prior to amendment, the original standard
provided:
An examiner may presume
that
errors,
irregularities,
deficiencies,
and
in
land
inconsistencies
descriptions in the chain of
title
do
not
impair
marketability unless, after
considering all circumstances
of record, (a) a substantial
uncertainty exists as to the
land involved or (b) the
description falls beneath the
requirements
of
minimal
sufficiency and definiteness
essential to an effective
When
conveyance.
examining
marginally
sufficient or questionable
descriptions, the examiner
should consider all relevant
factors, including the lapse of
time,
subsequent
conveyances, the manifest or
typographical nature of errors
or omissions, and accepted
rules of construction.

Acquiescence: Where there is uncertainty,
doubt, or dispute as to the true boundary,
the location may be resolved, without an
express agreement, by acquiescence.
Taylor v. Benton, 390 S .W .2d 509 (Tex. Civ.
App.-Eastland 1965, no writ).
The
acquiesced line becomes the new boundary
line by subsequent transfers that describe it.
Sullivan v. Michael, 39 Tex. Civ. App. 564,
87 S.W. 1061 (Tex. Civ. App. 1905, no writ).

Caution:
A defective description is one of the most
frequent causes of title failure. In general,
courts
construe
land
descriptions
objectively, i.e., how the land was described
in the instrument, and not subjectively, i.e.,
what the parties intended to describe in the
instrument but did not. Thus, ordinarily, if
the land description is unambiguous, the
parties' subjective intent not expressed in
the instrument is of no consequence .
Accordingly, the examiner must be certain
that the description in the instruments
involved in a chain of title sufficiently
describes the land so that it can be
identified and located on the ground with

Standard
Patents

5.20.

Land

Descriptions

in

An examiner may ord inarily rely on the land
description contained in a patent recorded
in the county records.

7

Facts . which wi ll indicate any reservation of
minera ls.

Comment:
Titles to Texas land are derived from land
grants by Spain and Mexico and from
patents issued by the Republic of Texas
and the State of Texas . In each C<lse, in the
absence of evidence indicating an error, an
examiner may rely upon the land description
in the land grant or patent in considering
whether the sovereign 's title has been
divested.

Source :
Citations
in
the
History:
Adopted , _ _ . 2009.

Standard 5.30. Water Boundaries

Although examiners do not determine water
boundaries, the following general principles
govern riparian and littoral boundaries along
tidelands, lakes, and streams.

With respect to patents issued by the
Republic or State of Texas, the laws have
always required that before a patent may be
issued for an unsevered tract, the tract must
be surveyed and the field notes returned to
the General Land Office. Those field notes
are then incorporated in the patent. See
Atlantic Refining Co. v. Noel, 443 S.W.2d 35
(Tex. 1968). Patents are not required to be
recorded in the county where the land is
situated, Mathews v. Caldwell, 258 S.W.
810 , 813-14 (Tex. Comm'n App. 1924,
judgm't adopted), although the patent-or a
certified copy obtained from the General
Land Office-usually is recorded.
It is
possible, although uncommon, for the field
notes in the patent to differ from those of the
original survey. In such a case the original
field notes control. State v. Sun Oil Co .,
114 S.W.2d 936, 944 (Tex. Civ. App.Austin 1938, writ ref'd). However, unless
the conflict is disclosed in the course of the
examination, examiners reasonably and
customarily rely on the patent as it appears
in the county records. If there is evidence of
a conflict, it may be necessary for the
examiner to consult the records of the
General Land Office to resolve the issue.

-

Comment.

Riparian
and
littoral boundaries are
governed by the applicable law in effect on
the date of severance of title from the
sovereign.
The boundary of a tract bounded by a nonnavigable stream is generally located at the
thread of the stream .
Title to the bed of tidelands, natural
navigable lakes, and, subject to the "Small
Bill," navigable streams is in the State.
Comment:
Tidelands: The owner of land adjacent to a
shore is a "littoral owner." TEx. NAT. RES.
CODE ANN . § 61.001 (6). The location of the
littoral boundaries is determined by the date
of severance from the sovereign . After the
Republic of Texas adopted the common law
on January 20 , 1840, the boundary of the
sea was established as the mean high tide
of the sea waters . Prior to that time , the
boundary of the sea was controlled by civil
law, which established the boundary as the
mean higher high tide or the highest tide in
w inter. The civil-law line is calculated over
regular tida l cycles of 18.6 years. Luttes v .
State, 324 S.W.2d 167 (Tex. 1958). See
a/so Kenedy Memorial Foundation v .
Dewhurst. 90 S.W .3d 268 (Tex. 2002).

Caution:
As to patents to lands sold by the State of
Texas between September 1, 1895 (the
effective date of the General Mineral
Release Act of 1895) and August 21 , 1931
(the effective date of the Sales Act of 1931),
the examiner should not rely on the patent
to ascertain whether the State reserved
minerals in the patented lands but should
obtain from the General Land Office a letter
or certificate of classification or Certificate of

Littoral ownership may be encumbered by a
migratory easement acquired under the
common law doctrine of custom, in favor of
the public in the beach area between the

8

fine of mean high tide or mean higher high
tide , depending upon the date of the patent,
and the line of natural vegetation. Macha v.
Mattox. 7 11 S .W .2d 95 (Tex. App.-Austin
1986, no writ). See a/so TEX. NAT. RES.
CODE ANN. § 61.001 (8) (defining the publicbeach area); TEX. NAT. RES. CODE ANN .
§ 61.013 (prohibiting littoral owners from
constructing improvements on the public
beach or from interfering with public use of
a public beach); TEX. NAT. RES. CODE ANN .
§ 61 .016 (establishing the boundary in the
absence of a line of natural vegetation).

minerals) as to the ir entire length. Motl v.
Boyd,
286
S.W.
458
(Tex.
1926)
(addressing Spring Creek, a tributary of the
South Concho River, located in Tom Green
County). See Hix v. Robertson, 211 S .W .3d
423, 425 (Tex. App .-Wa co 2006, pet.
denied) (finding that there is no single
methodology that must be followed to
measure this width to determine whether a
particula r stream fall s within the statute).
Texas adopted the common law in 1840.
Act approved Jan. 20, 1840, 4th Cong. ,
R.S .. § 1, 1840 Republic of Texas Laws 3,
3-4, reprinted in 2 H.P.N. Gammel, Laws of
Texas 1822-1897, at 177, 177-78 (1898)
(Austin, Gammel Book Co., 1898) (current
version at TEX. CIV. PRAC . & REM . CODE
ANN. § 5.001 ). Since then, the sovereign
also continues to retain. as a matter of
common law, title to the beds of rivers that
are navigable in fact regardless of the width
of the stream.

Streams: Title to the bed of streams may
depend upon whether a stream was
perennial or torrential, or is navigable or
non-navigable , and on whether the stream
has been affected by erosion, accretion, or
avulsion.
In land grants made prior to December 14,
1837, the sovereign, as required by
Mexican civil law, implicitly retained title to
the bed of a perennial stream (including all
minerals) flowing through or along the
granted land , whether navigable or not.
Manry v. Robison, 56 S.W:2d 438 , 446
(Tex. 1932) (addressing mineral title to a
portion of the Brazos River, a perennia l
stream). A perennial stream flows most of
the year. as opposed to a torrential stream,
which flows only after substantial rainfall.
Title to the bed of a torrential stream was
deemed granted to the riparian owners .
McCurdy v. Morgan, 265 S .W.2d 269 (Tex.
Civ. App.-San Antonio 1954, writ ref'd)
(addressing mineral title to a portion of the
Chiltlpin Creek in San Patricio County, a
torrential stream).

To determine the boundary line between the
bed of a navigable stream and riparian land
(between public and private ownership), the
law requires compliance with the gradientboundary methodology.
The gradientboundary methodology utilizes two factors:
(i) the location of the "key bank ," and (ii) the
gradient or rate of fall of the water. The
gradient boundary of a navigable stream is
"the water-washed and relatively permanent
elevation or acclivity at the outer line of the
riverbed that separates the bed from the
adjacent upland, whether valley or hill , and
serves to confine the water within the bed
and to preserve the course of the river."
Oklahoma v. Te xas. 260 U.S. 606 , 631-32
(1923) . The boundary is the bank at the
average or mean level atta ined by the water
when
it washes
the
bank without
overflow ing. Brainard v . State, 12 S.W .3d
6. 16 (Tex. 1999). The boundary between
the private riparian landowner and the State
of Texas is the inner bank at the mean level
midway between the line made by the
flowing water as it reaches the cut bank and
the top of the cut bank. Diversio n Lake
Club v. Heath, 86 S .W .2d 441 (Tex. 1935).

The Republic of Texas modified Mexican
civil law, effective December 14, 1837, by
the so-called "thirty-foot statute." Under this
statute. a stream that has an ··average width
of 30 feet from the mouth up" is defined as a
navigable stream. TEX. NAT. RES. CODE
ANN . § 21 .001(3). Thus, regarding land
grants made on or afte r December 14,
1837, the sovereign implicitly retains title to
the bed of such streams (including all

9

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-

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The stream w idth includes the entire bed
whether the full bed has water over the
entire width or not. Motl v. Boyd, 286 S .W.
458 (Tex . 1926).

former riparian owners of land abutting on
the abandoned bed are entitled to claim the
abandoned bed. Manry v. Robison. 56
S .W .2d 438 (Tex. 1932).
However, the
owner of the land lying between the o ld and
the new bed does not lose title to it, even if
the land is an island washed by the stream
on both sides.
Maufrais v. State . 180
S.W.2d 144 (Tex. 1944).

The boundary rules related to erosion and
accretion are applicable to navigable and
non-navigable streams . Maufrais v. State .
180 S.W .2d 144 (Tex . 1944); Tyler v.
Gonzales, 189 S.W.2d 519 (Tex. Civ.
App.-San Antonio 1945, writ ref'd w .o.m .).
Where a stream gradually or imperceptibly
changes or shifts by accretion or erosion.
the body of water that makes up the
boundary also shifts or changes for both
surface and mineral rights. Brainard v .
State, 12 S .W.3d 6 (Tex. 1999).

-

-

-

Although patent survey lines are not
supposed to cross navigable streams, T EX.
NAT. RES. CODE ANN.§ 21 .012(b}, the Small
Bill (Tex . Rev. Civ. Stat. Ann . art. 5414a .
effective March 3, 1929) validated patents
to lands crossing navigable streams where
the patent had been issued at least ten
years prior to the enactment of the statute
(March 3, 191 9) and passed title to the bed
to the patentee to the extent necessary to
convey the number of acres contained in
the patent. Strayhorn v. Jones, 300 S.W.2d
623 (Tex. 1957) (addressing the Salt Fork of
the Brazos in Kent County).

Accretion is the gradual and imperceptible
process of adding land by the action of
water thereby creating dry land that was
previously covered by the water. Land may
be added or accreted by alluvian or reliction .
Accretion by alluvian is the gradual addition
made to the land by the action of the water
depositing solid material or mud. Accretion
by reliction is the gradual and imperceptible
addition of land by the recession of the
water, whereby ·water recedes below its
previously normal watermark, thereby
uncovering previously submerged land.
Brainard v. State, supra. A change in the
boundary is gradual or imperceptible when
a person witnessing the boundary from time
to time can see that progress is being made
but cannot perceive it while the process is
occurring. Denny v. Cotton, 22 S.W. 122
(Tex. Civ. App. 1893, writ ref'd).

Beginning in 1837, grants by the Republic of
Texas and the State of Texas have included
title to the beds of non-navigable streams .
Thus. if a tract granted on December 14,
1837 or thereafter is bounded by a nonnavigable stream, the non-navigable stream
bed is owned by the riparian owners to the
center or thread of the stream. City of
Victoria v . Schott, 9 Tex. Civ. App. 332, 29
S .W . 681 (Tex. Civ. App. 1895, no writ);
Muller v. Landa, 31 Tex. 265 (Tex. 1868).
The uthread" is typically defined as the
center line of the stream as measured from
opposite banks. Border Island Co. v .
Cowles Shipyard Co ., 94 Misc. 340, 348
(N.Y. Sup. Ct. Eq. 1914).

Avulsion is the sudden and perceptible loss
or addition of land by the action of the water
resulting in a sudden change in the bed or
course of the stream. Where a navigable
stream suddenly and perceptibly creates a
new bed . the owner through whose property
the stream now passes loses title to the
bed, except for a possibi lity of reverter,
which may again ripen into fee title should
the stream bed return to its previous
'location. The State obtains a determinable
fee interest in the newly washed land . The

If a non-navigable water course that serves
as a boundary changes its location by the
gradual and imperceptible processes of
accretion and erosion. the boundary will
move with movement of the stream and
continue to be the center of the stream .
Maufrais v. State, 180 S.W.2d 144 (Tex .
1944); Tyler v. Gonzales , 189 S .W .2d 519
(Tex . Civ . App.-San Anton i·o 1945, w rit

10

-

ref' d w .o.m.). If a non-navigable stream
changes
location
suddenly
through
avulsion , leaving its old banks to form new
ones, the boundary will remain in the middle
of the pre-avu lsion channel even if the
boundary is no longer washed by the
waters . Maufrais v. State, 180 S.W.2d 144
(Tex. 1944 ).

Calls in an instrument to the edge of th e
water, high or low watermark, the shore, or
the bank of a lake establish the boundary at
the edge of the water and exclude the bed
of the lake. Welder v. State. 196 S.W . 868
(Tex.Civ.App.-Austin 1917, writ ref'd). A
boundary may be established by a call for a
contour elevation line . See Ulbricht v.
Friedsam , 325 S.W . 2d 669 (Tex. 1959).

Calls in a deed contiguous to a non navigable stream are presumed to pass title
to the center of the stream. Strayhorn v.
Jones, 300 S.W.2d 623 (Tex. 1957). This
presumption applies even if the land is
described by metes and bounds without
mention of the stream , or where the
description refers to marked comers on the
bank that do not correspond to the center of
the stream. Muller v. Landa. 31 Tex. 265
(1868). If boundary descriptions along nonnavigable streams incorporate meander
lines, the meander lines do not determine
the boundary of the property conveyed, but
generally describe the curvature of the
banks of the stream, thereby qssisting in
locating the general course of the stream.
Absent avulsion. the actual course of the
stream, not surveyed meanoer lines,
determines ·the boundary. Strayhorn v .
Jones, 300 S .W .2d 623 (Tex. 1957); Stover
v. Gilbert, 247 S.W. 841 (Tex. 1923).

Source:
Citations in the Comment.
3 Aloysius A. Leopold, Land Titles and
Title Examination, ch. 6 (3d ed. 2005).
History:
Adopted, _ _ , 2009.

Standard 9.10. Powers Of Trustee
An examiner must confirm the identity and
powers of the trustee and whether the trust
was in effect at the time of a trust
transaction .
Comment
Prior to April 19, 1943 , the effective date of
the Texas Trust Act, a trustee had only
those powers granted by or reasonably
implied from the trust instrument. Under the
current Texas Trust Code, a trustee of an
express trust has the powers enume rated in
TEX. PROP. CODE ANN.§§ 113.003-.027including the power to convey , lease, and
encumber trust property and any add itional
powers that are necessary or appropriate to
carry out the purposes of the trust-unless
limited by the trust instrument, a subsequent
court order, or another provision of the
Code that conflicts with or limits the power.
TEX. PROP. CODE ANN. §§ 113.001-.002.
Although subject to certain limitations, the
terms of an express trust preva il over any
provision of the Code. TEX. PROP . CODE
ANN. § 111 .0035(b). Thus, an examiner
should examine both the trust instrument
and the Code to confirm that the trustee had
the authority to perform the act under
consideration .
However, in lieu of
examining
the
trust
instrument, the
examiner may examine some other

For general discussion of streams, see
Brainard v. State, 12 S.W .3d 6 (Tex. 1999).
Lakes: A natural lake that is navigable
belongs to the state. State v. Bradford, 50
S .W .2d 1065 (Tex. 1932). A grant from the
sovereign of a natural lake that is nonnavigable includes the bed of the lake if the
patent shows an unmistakable intention to
convey the bed . Taylor Fishing Club v.
Hammett, 88 S.W.2d 127 (Tex.Civ.App.Waco 1935, writ dism 'd).
A lake is
navigable if "its natural and ordinary
condition affords a channel for useful
commerce ." /d. at 129. The "thirty-foot
statute" discussed above has no application
in determining navigability. Taylor Fishing
C lub v. Hammett, 88
S.W.2d
127
(Tex.Civ.App.-Waco 1935, writ dism'd).

11

-

-

appropriate evidence, e.g ., a statute now
permits a person who acts in reliance on a
"certification of trust" provided by the trustee
and meeting specified requirements to
assume without further inquiry the facts
contained in the certification . TEX. PROP.
CODE ANN. § 114 .086.

1943). At least for purposes of conveying or
encumbering real property, examiners
should not assume that this general rule has
been altered by the Texas Trust Code .
See, e.g ., TEX. PROP. CODE ANN. §§
114.081,
114.086,
117 .004,
117.0 1'1 .
Accordingly, a title examiner encountering a
conveyance by a person purporting to a ct
as agent or attorney in fact for a trustee
must, in addition to examining the power of
attorney or other document granting the
power, carefully review the trust agreement
to verify that it expressly enables the trustee
to delegate the trustee's discretionary
authority.

Where the authority of a trustee is not
documented by any instrument of record,
but the deedby the trustee has been of
record for at least twenty years, the
examiner is aided by a presumption of the
grantor's recited authority under the
"ancient document" rule . See discussion in
Comment to Standard 13.40. An examiner
may also be aided by the statutory
requirement that an action to recover
property conveyed by an instrument signed
by a trustee without record of the authority
of the trustee or proof of the facts recited in
the instrument must be brought within four
years of the date that the instrument was
"recorded," if it was recorded before
September 1, 2007, or within two years of
the date that the instrument was "filed for
record," if it was filed on or after September
1, 2007. TEX. C!V. PRAC. & REM. CpDE ANN.
§ 16.033(a)(7). Act of June 15. 2007, 80th
Leg., R.S ., ch. 819, § 2, 2007 Tex. Gen.
Laws 1695 (nonretroactivity provision).

-

Source :
Citations in the Comment.
Oklahoma Title Examination Standards,
Std 15.1.
3A Aloysius A Leopold, Land Titles and
Title Examination§ 12.36 (3d ed. 2005).
History:
Adopted, June 27, 1997, amended June
27. 2008; amended
, 2009. The
amended standard of June 27, 2008 ,
provided:
"Unless a trustee's power is
restricted by the trust instrument or by law,
the trustee of an express trust has the
power to convey, lease, and encumber the
real property interest that is subject to the
trust.''

If the purpose of an examination concerns
dealing with a trustee over an extended
period of time (e.g., paying the trust
proceeds from oil or gas production), then
the examiner may need to review the trust
instrument to: (1) identify successor
trustees; (2) determine what facts may
cause the trust to terminate: and (3) identify
the beneficiaries of the trust property at the
time of trust termination .

The original standard provided :
Unless a trustee's power is
restricted
by
the
trust
instrument or by law, the
trustee of an express trust
has the power to convey,
lease, and encumber the real
property interest that is
subject to the trust. A
trustee's act binds the trust
and all beneficiaries as
against successors who are
without actual or constructive
notice of restrictions or
limitations upon the trustee's
powers.

Caution:
Unless the trust agreement expressly grants
the power of delegation to the trustee,
Transamerican Leasing Co. v. Three Bears,
Inc. , 586 S .W .2d 472 (Tex. 1979), the
general rule is that a trustee may not
delegate the trustee's authority to another.
West v. Hapgood. 174 S.W.2d 963 (Tex.

12

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Citation

Peter E. Hosey, “CLE: 2010: The Texas Land Title Examination Standards,” St. Mary's Law Digital Repository, accessed October 21, 2017, http://lawspace.stmarytx.edu/item/STMU_HomecomingCLE2010Hosey.

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