the Broadway National Bank (“Bank ”), as trustee, coupled with subsequent attempts (via correction deeds) to correct the first incorrect conveyance. Specifically, the trust agreement/amendment provided that one of the beneficiaries (John Evers – “John”) was only to receive a life estate in twenty- five percent (25%) of the mineral estate in and under the lands at issue in the case. The Bank incorrectly conveyed to John a full twenty-five percent (25%) fee simple mineral interest in the lands at issue. Quoting the Court: “In this case, the court of appeals considered whether the original parties could validly agree to correct a mistake in the original instrument of conveyance, after a third party acquired an interest...” ( Broadway National Bank et al. v. Yates Energy Corporation et al. , 631 S.W.3d 16, 18 (Tex. 2021) (emphasis added)). The court of appeals ruled that, to have a valid correction deed, once a sale or transfer of the property was made, such sale triggered the “if applicable” clause found in Tex. Prop. Code § 5.029(b)(1) and thus required the joinder of all of the current owner(s), including any intervening third party grantees. The Texas Supreme Court did not agree ! It interpreted the “if applicable” clause to require a third party grantee (present owner) to join in the correction deed if and only if the original parties to the incorrect deed were “unavailable” (Deceased, unlocatable or refused to sign? Unknown and un-defined in the Correction Deed Statutes or this case). That is, even if there was a new owner of all/part of the lands at issue or an interest therein, pursuant to a conveyance to that third party made prior to the attempted correction of a prior “incorrect” deed, only the original party(ies) to the incorrect deed (who may own no interest in the lands at issue at the time of the issuance of the correction deed) were required to execute a correction deed under Tex. Prop. Code § 5.029(b) (1) to achieve the result of a valid correction of a material mistake.
This article will look at some of the specific problems raised by Broadway as it pertains to: (i) the examination methodology for the run sheets for use by the examining attorney; (ii) how those documents are to be interpreted (by both the landman and examining attorney) in light of this case and (iii) how the costs of preparation of the title run sheet will certainly skyrocket in light of this case (perhaps increasing up to 300% or more). Retroactive Application - Preliminarily, how does Broadway apply to the matters raised below? Specifically, does the case have only a prospective application or is it to be applied retroactively as though the rules of law announced in the case had always been the law? This point is absolutely crucial in understanding this case on a go forward basis! The general rule in Texas is that any decision of the Texas Supreme Court was to be applied retroactively as though it had always been the law. ( Sanchez v. Schindler , 651 S.W.2d 249, (Tex. - 1983); Carrollton-Farmers Branch Independent School Dist. v. Edgewood Independent School Dist., 826 S.W.2d 489 (Tex. - 1992)). However, exceptions are recognized when considerations of fairness and policy preclude full retroactivity. Resolution of the retroactivity issue turns primarily on the extent of public reliance on the former rule and the ability to foresee a coming change in the law ( City of Farmers Branch v. Matushita Electric Corp. , 537 S.W.2d 452, 454 (Tex. - 1976)). Key to this article is the author’s opinion that this case will be applied retroactively. As significant as this case is, the Court should have stated whether or not it would have prospective application only. It did not! Are additional Texas titles in danger of being overturned based on as yet undiscovered correction deeds which would NOT have been found using pre- Broadway title examination procedures? In the author’s opinion, yes.
Summary of the Case
Broadway arose out of an unrecorded trust agreement/amendment and a subsequent incorrect conveyance to certain beneficiaries of the trust by
Facts of the Case
1. Pursuant to an unrecorded trust
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G rowth T hrough E ducat i on - J uly / A ugus t / S ept ember 2021
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