THE SUPPLEMENTAL TITLE OPINION – IS IT STILL NECESSARY? Part Two
By Terry E. Hogwood, Attorney (Continued from the conclusion of Part One published in 2nd Quarter NADOA News Magazine)
Issue 4: Marketable Title
All Texas title opinions are written with one title standard in mind – Marketable Title .
2d. 639 (Tex. Civ. App. - 1947, no writ hist.); Owens v. Jackson , 35 S. W. 2d. 186 (Tex. Civ. App. - 1931, writ dism’d w.o.j.); Texas Auto Co. v. Arbetter , 1 S. W. 2d. 334 (Tex. Civ. App. - 1927, writ dism’d w.o.j.); Austin v. Carter , 296 S. W. 649 (Tex. Civ. App. - 1927, writ dism’d); Alling v. Vander Stucken , 194 S. W. 443 (Tex. Civ. App. - 1917, writ ref’d); Gaines v. Dillard, 545 S.W.2d 845 (Tex.Civ.App. — Fort Worth 1976) Example - T/E (title examiner) finds eight oil and gas leases issued in the 1940’s by previous owners in the chain of title covering and pertaining to the Examined Lands. There are no releases of record. T/E cannot determine when, if ever, production was established from the Examined Lands or lands pooled therewith. Question: Does T/E: (i) make a requirement that releases of the oil and gas leases be obtained knowing that the oil companies owning same may well be out of business OR (ii) does it make no requirement and assume the risk itself that the oil and gas leases are still in force and effect OR (iii) does it recommend that the client company assume the risk and not request any releases of the oil and gas leases? If T/E assumes the risk, does it communicate that to the client? Assuming all other title requirements have been properly satisfied, what kind of title does the client company have based on: (i) satisfaction of (i) – marketable ; (ii) at best defensible or (iii) at best defensible . T/E must communicate the decisions in (ii) and (iii) to the client company. Example - T/E finds in the chain of title that one of the two then cotenants of the Examined Lands died. The record (heirship affidavit) reflects that the cotenant died with a will but that the
Title problems cannot be analyzed, cured or waived without an understanding of the title standard utilized by the examining attorney in the rendering of the original title opinion and/or supplemental title opinion(s). In Texas, fee simple title opinions, and specifically the underlying title requirements found in such opinions, are written so that satisfaction of all title requirements will yield a “fee simple marketable title” for the tract of land under examination (assuming the curative material(s) submitted do not render the title un- marketable if premised on facts outside of the record). “Marketable title has been a defined legal term in Texas jurisprudence since the 1920’s. ( Lund v. Emerson , 204 S. W. 2d. 639 (Tex. Civ. App. - 1947, no writ hist.); Owens v. Jackson , 35 S. W. 2d. 186 (Tex. Civ. App. - 1931, writ dism’d w.o.j.); Texas Auto Co. v. Arbetter , 1 S. W. 2d. 334 (Tex. Civ. App. - 1927, writ dism’d w.o.j.); Austin v. Carter , 296 S. W. 649 (Tex. Civ. App. - 1927, writ dism’d) and Alling v. Vander Stucken , 194 S. W. 443 (Tex. Civ. App. - 1917, writ ref’d)). A “marketable title” is a title based solely on instruments of conveyance properly filed of record and is defined as that title which is reasonably free from such doubt that a prudent man, with knowledge of all of the salient facts and circumstances surrounding the title and their legal significance, would be willing to accept. An objection (read title requirement) to a marketable title is based on serious and reasonable doubts by the title examiner concerning the title that would induce a prudent man to hesitate in accepting a title affected by them. ( Lund v. Emerson , 204 S. W.
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G rowth T hrough E ducat i on - J uly / A ugus t / S ept ember 2023
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