of title examination is to accurately and precisely locate all title documents in a particular tract’s chain of title, including correction deeds. Since valid correction deeds are now by statute (§5.030) deemed to be constructive notice to all subsequent buyers in a particular chain of title effective as of the date of the original document which it replaces , how is that document to be located given that it is recorded out of recording date order as well as date of instrument order? For all intents and purposes, the Bank had nothing left to convey. All of the Bank’s interest (as Trustee) in twenty five percent (25%) of the mineral estate in the subject lands was, as of February 1, 2005, vested in the grantee in the deed (John). Only John and his interest would have been “run forward” (ignoring the duty of inquiry Yates and EOG et al. may have had to obtain a copy of the trust agreement/amendment referred to in the February 1, 2005 conveyance to confirm whether or not John was entitled to an undivided 25% fee simple mineral interest in the subject lands or merely a life estate – a huge BFP for value issue). A title examiner, running John’s name forward in the indexes for DeWitt and Gonzales counties, would have found that John had conveyed to Yates Energy a royalty interest in the subject lands (and other lands) effective February 1, 2012 as well as, by separate instrument, an overriding royalty interest dated effective the same date. The royalty deed conveyed all of John’s royalty interest in and to the oil, gas and mineral leases covering and pertaining to the subject lands and other lands previously granted by John. Thereafter, Yates Energy conveyed seventy percent (70%) of its royalty interest to EOG Resources (who thereafter assigned portions of its interest to third parties) by royalty deed with the same effective date. Prior to this case, John’s name would likewise not have been run forward by a Yates Energy/EOG Resources et al. title examiner after John’s royalty conveyance to Yates Energy. He had no royalty interest left to convey to any third party. In spite of owning NO interest in the royalty in and to the subject lands, this Court holds that John still has the right to execute a correction deed, reduce his interest in the subject lands from a twenty five
percent (25%) mineral interest to a twenty five percent (25%) life estate interest in the minerals in said lands. By his execution of this now adjudicated valid correction deed in 2013, John had the power and interest in the royalty under the subject lands (along with the other original parties to the February 1, 2005 distribution deed – No. 3 above) to reduce his interest (and Yates Energy/EOG Resources et al. royalty interest) to a life estate only. This correction deed would not have been found by Yates Energy/EOG Resources et al. under traditional title examination procedures. Likewise, the 2013 Correction Deed would not have been looked for by a Yates Energy/EOG Resources et al. title examiner since (i) the Bank, as trustee, no longer owned any interest in any oil, gas and other minerals after its initial distribution of the assets of the trust (vesting John in 2005 with a twenty five percent (25%) mineral interest in the subject lands) and thus would not be run forward from and after the date of the distribution deed and (ii) John’s twenty five percent (25%) royalty interest would likewise not have been run forward from February 1, 2012 since John had conveyed all of his royalty interest in and to the oil and gas covering the subject lands that he owned to Yates Energy effective that date. CONCLUSION: The 2013 Correction Deed would never have been looked for under traditional title examination procedures. Obviously, the Court knew nothing of title examination procedures and what it was changing when it rendered its decision. This case will mandate the changing of title examination procedures until, hopefully, the Texas Legislature can correct this case and the underlying legislation (Correction Deed Legislation) and provide that only the parties then owning an interest in the lands where a correction deed is sought can execute a valid correction deed. At the very least, this case changes all of the foregoing title examination procedures for running title online/in the courthouse. First, and foremost, at least since the effective date of the “Correction Deed Statutes” (9/1/2011), specifically § 5.030, some of the valid correction deed legal effects are: (i) a correction deed is effective as of the effective date (not the date of recording same) of the recorded original instrument; (ii) a correction deed is
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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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