BROADWAY NATIONAL BANK, TRUSTEE OF THE MARY FRANCES EVERS TRUST, ET AL., PETITIONERS V. YATES ENERGY CORPORATION, EOG RESOURCES, INC., JALAPENO CORPORATION, ACG3 MINERAL INTERESTS, LTD., GLASSELL NON-OPERATED INTERESTS, LTD., AND CURRY GLASSELL, RESPONDENTS No. 19-0334 Argued December 2, 2020
This month’s newsletter analyzes the above identified VERY recent Texas Supreme Court case and its potential effect on every Texas title where a correction deed is found ANYWHERE in the chain of title (this newsletter will briefly look at § 5.031. Correction Instruments Recorded Before September 1, 2011). The factual situation is somewhat complex but can be boiled down to the following: A conveyed her interest to an inter vivos trust with Bank as sole trustee. Bank, without authority under the trust agreement, conveyed a full one-fourth share of A’s mineral ownership to J (and the remainder of the interest to other beneficiaries under the trust) when J was only entitled to a life estate per the terms of the trust. J thereafter conveyed his conveyed his interest to XYZ Oil Company et al. Several correction deeds were entered into after the deed by Bank to J et al by some/ all of the original parties to Bank’s deed, including Bank, to reflect that J did not own anything but a life estate in the mineral interest originally conveyed to him. However, none were signed by XYZ Oil Company et al. This case involves the Correction Deed Statutes found at § 5.027 - § 5.031, Texas Property Code. Specifically, the court reviewed § 5.029 quoted in pertinent part: “(b) A correction instrument under this section must be: (1) executed by each party to the recorded original instrument of conveyance the correction instrument is executed to correct or, if applicable, a party’s heirs, successors, or assigns ; and (emphasis added)
the court’s reasoning in this decision was given the fact that one of the original signatory parties, at one time owning of record a full one-fourth mineral interest, executed a correction deed when he no longer owned any mineral interest whatsoever. The Texas Supreme Court, based on the following reasoning, held that J’s execution of the correction deed was good and the correction deed was valid (retroactively changing the ownership of XYZ Oil Company et al from an undivided fee simple mineral interest to a life estate in that mineral interest only). The court did potentially offer XYZ Oil Company et al the protection of § 5.030 which protects good faith purchasers. Big deal! It could have correctly interpreted the statute and never have had to reach that issue. The arguments of the parties are quite simple and distinct. XYZ Oil Company et al argued that it is not the agreement of the original parties to the deed that must sign the correction instrument but rather the then owner of the property/interest who must sign to have an effective correction deed. Bank argued that subsequent owners of an interest in the property/interest are not required to execute the correction deed if the original parties thereto are available. Without reviewing the extremely long and inconsistent analysis the court makes on the intent of the legislature as found in the words of the statute above quoted, the court holds that § 5.029 is satisfied (and the correction deed at issue is therefore deemed valid) when all of the original parties agree to sign the correction instrument. Wait for it!
This is a fact driven case. It cannot be emphasized enough how simple the issue was and how totally incorrect
“…Because this section provides for unanimous
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G r o w t h T h r o u g h E d u c a t i o n - J u l y / A u g u s t / S e p t e m b e r 2 0 2 1
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