apparently claimed that marketable title to the tract at issue was not provided to the buyer. The only question before the court was whether the buyer’s claim was covered under the title policy. The court correctly re-stated the definition of marketable title. It also correctly re-stated when a title is not marketable. The court then concluded:
of any instrument by which Theresa Krug Matlage conveyed any interest in the 318 acre tract.
While Mrs. Matlage was not actively interfering with the title of plaintiffs, she was claiming an undivided interest therein (through her mother’s estate). The court held that this claim, valid on its face, interfered with the seller’s ability to furnish a “marketable title” to the lands at issue. That is, marketable title to the lands at issue could not be furnished by the buyer to the seller due to a claimed undivided interest in the lands made by a third party. Title examiners in Texas are greatly benefitted by the Texas Title Examination Title Standards (Texas Property Code. Sections 1.001 to 21.040 inclusive) Article 2.10 defines Marketable Title along with comments and caveats. “However, the title examination standards are not statutory law... Rather, they are a “ collective consensus” of attorney members of the Real Estate; Probate and Trust Law; and Oil, Gas, and Energy Resources sections of the State Bar of Texas.” Pineridge Associates, L.P. v. Ridgepine, LLC 337 S.W.3d 461, 468 (Tex.App. – 2011) In the preparation of this paper, the author ran the term “defensible title” in a Texas caselaw database to see if that term had been defined by a Texas court in any reported case. No court case could be found which addressed any factual situation dealing with defensible title. Apparently, to date, cases dealing with defensible title have only addressed that term in the context of how it was defined in a contract made the basis of litigation. ( Petrohawk Props, L.P. v. Jones, 455 S.W. 3d. 753 (Tex. App. – 2015) Issue 5 – How should the Ownership Schedule be set forth in the title opinion (either original or supplemental)? The initial issue each title examiner faces in the actual writing of any title opinion is how will the title examiner set forth its mineral/royalty ownership conclusions in the Ownership Schedule: (i) in the original title opinion or (ii) in the supplemental title opinion where existing or new
“The cases cited by appellant establish that the concept of “title” speaks to ownership of rights in property, not to the condition or value of the property. Thus, a defect in, or encumbrance on, title (such as would trigger coverage under a title insurance policy) must involve a flaw in the ownership rights in the property.” Hanson Business Park, L.P. v. First National Title Insurance Company , 209 S.W.3d 867, 870 (Tex.App. — 2006)
That is, a lack of marketable title may not be attributed to just any event which reduces the value of the land being purchased. There must be a failure (or flaw) in the actual ownership of the tract at issue. The inclusion of the tract into a flood plain was NOT an issue of title whereby the buyer could claim and receive damages under the title insurance policy. A Texas court has also more recently than the older cases cited above addressed what a Marketable Title is - Prendergast v. Southern Title Guaranty Company , 454 S.W.2d 803 (Tex.App. — 1970) Factually, a tract of land was acquired in 1904 by one Theodore Krug. The lands at issue in this case were a part of a larger tract acquired by Mr. Krug. At the time of the acquisition of said lands, Mr. Krug was married to Emilie Krug. They had five children, one of whom was Mrs. Theresa Krug Matlage. Emilie Krug predeceased Theodore Krug and did not leave a will. Theodore Krug died leaving a will by which all of his property was left to his other four children, not including Theresa Krug Matlage. Thereafter, the other four Krug children, not including Theresa Krug Matlage, were parties to a suit by which the 318 acre tract was partitioned between them. There is no record
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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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