“heirs” elected not to probate same. No will was attached to the heirship affidavit. Question: Does T/E: (i) merely note the heirship affidavit and make no requirement OR (ii) note the heirship affidavit and require that a copy of the decedent’s will be provided? Assuming all other title requirements have been properly satisfied, what kind of title does the client company have based on: (i) – unknown since without knowing who the devisees were, one or more unknown devisees who were (a) not heirs at law or (b) were heirs at law but obtained a larger share of the estate than their intestate share, may be unleased and/or underpaid if production is established; (ii) even if the devisees in the will are the same as the heirs at law in the heirship affidavit, without probating the will reliance is premised on facts outside of the record (heirship affidavit) – defensible at best. A title is not marketable if: (i) there is a reasonable chance that a third party could raise an issue concerning the validity of the title to the estate against the apparent owner (for instance, a claim of adverse possession) or (ii) parol evidence is necessary to remove any doubt as to the validity and/or sufficiency of the owner’s title (for instance, an affidavit of heirship to reflect a deceased owner’s heirs-at-law) or (iii) title rests upon a presumption of fact which, in the event of a suit contesting title, would probably become an issue of fact to be decided by a jury (for instance, whether additions to a tract of land occurred by accretion or avulsion) or (iv) the record discloses outstanding interests in other parties that could reasonably subject the owner to litigation or compel such owner to resort to parol evidence to defend the title against the outstanding claims (for instance, a fee simple title with an outstanding, unreleased oil and gas lease is not a marketable title). ( 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); 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)).
As stated above, in the author’s opinion, most Texas onshore titles that are approved for drilling by the client company are approved on the basis of less than marketable title ie defensible title. A defensible title is one where the client, with advice and consultation from the title attorney: (i) has decided to waive the satisfaction of one or more title requirement(s) or (ii) accepts less than absolute proof that an outstanding title requirement has been satisfied or (iii) understands that, even though a title requirement may have been satisfied by the submission of the called for curative materials, marketable title cannot be achieved based on those materials where reliance on facts outside the record title is required (adverse possession, heirship affidavit etc.) The client usually decides that, if sued on the title issue either waived or satisfied with facts contained in documents that are outside of the record title, it can successfully defend its title and win any subsequent court case - Defensible Title . A marketable title standard requires the examining attorney to point out those title defects which, in the opinion of the title attorney, are such that a prudent man, with knowledge of all of the salient facts and circumstances surrounding the title and their legal significance, would NOT be willing to accept. Does a marketable title mean that: (i) even if there is only one break in the chain of title, no matter where in the chain of title that break occurs OR (ii) even if the proper curative document is provided in satisfaction of a title requirement, but that document itself relies on matters outside of the record title, that the client will have to rely on defensible title rather than marketable title? Yes .
Recent cases addressing Marketable Title
A recent case addressed what a Marketable Title was not - Hanson Business Park, L.P. v. First National Title Insurance Company , 209 S.W.3d 867 (Tex.App. — 2006) Factually, a tract of land was sold. It was later determined, after the closing, that the tract of land that was sold was located within a flood plain. The claim was made by the buyer, under its title insurance policy, for damages to its title. The buyer
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N at i onal A ssociation of D i v i s i on O rder A nalys t s
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