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					By James L. Gosdin, Copyright reserved    RECORDING STATUTES AND BONA FIDE PURCHASERS


1.0       BACKGROUND OF TITLE RECORDING
         1.1     Colonies and Early States: The public registry system was designed to
evidence ownership and to inform purchaser of the status of title. Our recording system
descends from the colonial practice in Plymouth Colony from 1636 and Massachusetts in
1640. In 1639 Virginia enacted the requirement of recordation if the grantee did not take
possession of the land. In 1639 Connecticut adopted a law stating that all mortgages and
sales were not valid until recorded.1 The Act of October 7, 1640 adopted by Massachusetts
Bay Colony was a recording statute that did not except subsequent purchasers with notice
from the protection of those who recorded first. English equity courts construing similar
laws impressed a constructive trust on such purchasers with notice. Massachusetts rendered
a similar decision; subsequently the law was expressly engrafted with this significant limit.
Many American recording laws similarly exclude from their protection those who are not
"innocent," "bona fide," acting in "good faith," or who are not "without notice."2 A number
of earlier laws also contained "grace" provisions, which required only a prompt recording
within the context of the time. Such delay sanctioned by law sometimes exceeded six
months. Those acquiring in the interim were not protected if recording of the first
transaction ensued. This feature was the product of a rustic environment where community
knowledge was real. Grace provisions are now largely historic in the real property context.
        1.2     General Features of United States Recording Systems: The public
records generally consist of a number of books and indices for deeds, mortgages, judgments,
mineral leases, judgments, tax liens, and similar matters. Other records that must be
reviewed include probate, court, and tax records. Typically the records are indexed by
names (grantor/grantee; grantee/grantor). However, a few states authorize or require tract
indexing that posts or indexes instruments by the land parcels that they affect. In theory, this
type of index is superior, but experience has varied on the quality of indexing.3
                 The Torrens system was adopted in approximately 20 states as an optional
system for registration of land titles; however, its use was not that widespread and is now
available in only a few jurisdictions. The system was most frequently used in Cook County,
Cape Cod, Boston, Minneapolis and St. Paul. Criticism of this form of title transfer usually
has centered on the cost of registration, lack of conclusiveness of effect in some
jurisdictions, and the exceptions to the effect of registration.4
                There are three basic types of recording systems in the United States: race,
race-notice, and notice. The race system provides that the first person to record (or file)
prevails, regardless of whether that person has knowledge of other unrecorded interests.
The notice system protects a subsequent purchaser or lender who acquires an interest
without notice of a prior unrecorded conveyance or lien. Under the notice system the
subsequent purchaser is not required to record in order to protect an interest against a prior
grantee or lienholder, but is required to record in order to protect against a subsequent
grantee or lienholder. In the race-notice system, the subsequent grantee or lienholder must

1
 Patton, Land Titles Section 6
2
 Patton, Land Titles, Section 8
3
 Michigan Compiled Laws Sections 53.142, 53.151; Minnesota Statutes Sections 386.05-386.06; Revised
Statutes of Nebraska Section 23-1517.02; North Dakota Century Code Section 11-18-07; Ohio Revised
Code Annotated Section 5309.33; 19 Okla. St. Section 291; Wisconsin Statutes Section 706.08
4
 Basye, Clearing Land Titles Section 1

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By James L. Gosdin, Copyright reserved       RECORDING STATUTES AND BONA FIDE PURCHASERS


acquire an interest without notice of the prior unrecorded interest and must record before
recordation of that prior unrecorded interest. This is the most common system. In a few
states, the initial grantee or lienholder has a grace period to record in order to protect its
interest against intervening purchasers or lienholders who acquire without notice of its
rights. Texas has a notice system of recording. Below is a table of the recording laws of the
different states.


          State Recording Acts:
          N = Notice
          R = Race
          R-N = Race-Notice
          G = Grace


          State                          Type            Statute


          ALABAMA                        N               ALA. CODE §35-4-90 (UNLESS)
                                                         (RECORDED)
          ALASKA                         R-N             ALASKA STAT. §40.17.080 (RECORDED)
          ARIZONA                        N               ARIZ. REV. STAT. ANN. §§33-411, -412
                                                         (NOTE §33-411.01 PROVIDES 60 DAY
                                                         REQUIREMENT FOR RECORDING
                                                         TRANSFER) (RECORDED).
          ARKANSAS                       R               ARK. CODE. ANN §18-40-102
                                                         MORTGAGES (FILING)
                                         N               ARK. CODE. ANN §14-15-404 OTHER
                                                         THAN MORTGAGE (FILED)
          CALIFORNIA                     R-N             CAL. CIV. CODE §1214 (RECORDED)
          COLORADO                       R-N             COLO. REV. STAT. ANN. §38-35-109
                                                         (FILING)
          CONNECTICUT                    N(G)            CONN. GEN. STAT. ANN. §47-10
                                                         (RECORDED) GRACE OF REASONABLE
                                                         TIME TO RECORD: Farmers and
                                                         Mechanics, Savings Bank, v. Garofalo, 219
                                                         Conn. 810, 595 A. 2d 341 (1991).
          DELAWARE                       R               DEL. CODE ANN. TIT. 25, §153
                                                         (RECORDED) Cravero v. Holleger, 566 A.
                                                         2d 8 (Ct. Chancery De. 1989)
          DIST. OF                       N               D.C. CODE ANN. §§42-401, 42-801
          COLUMBIA                                       (DELIVERY)


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          FLORIDA                        N               FLA. STAT. ANN. §695.01 (RECORDED)
                                                         (BFP by quit claim)
          GEORGIA                        R-N             GA. CODE ANN. §44-2-1 (RECORDED)
          HAWAII                         R-N             HAW. REV. STAT. §502-83 (RECORDED)
          IDAHO                          R-N             IDAHO CODE §55-812 (RECORDED)
          ILLINOIS                       N               765 ILCS 5/30 (FILING)
          INDIANA                        R-N             IND. CODE ANN. §§32-1-2-11, -16
                                                         (RECORDED)
          IOWA                           N               IOWA CODE ANN. §558.41 (FILE AND
                                                         RECORDED)
          KANSAS                         N               KAN. STAT. ANN. §§58-2222, - 2223
                                                         (DEPOSITED) (Note: case law suggests R-
                                                         N – FARMERS & MERCHANTS STATE              Formatted
                                                         BANK OF CAWKER CITY V. HIGGINS,
                                                         89 P. 2d 96 (Kan. 1939)
          KENTUCKY                       N               KY. REV. STAT. ANN. §382.270
                                                         (LODGED FOR RECORD)
          LOUISIANA                      R               LA. REV. STAT. ANN. §9:2721 (FILED)
          MAINE                          R-N             ME. REV. STAT. ANN. TIT 33, §201
                                                         (RECORDED) (QUIT CLAIM
                                                         SUFFICIENT)
          MARYLAND                       R-N             MD. CODE ANN., REAL PROP. §§3-101, -
                                                         203 (RECORDED)
          MASSACHUSETTS N                                MA. GEN. LAWS ANN. CH. 183, §4
                                                         (RECORDED)
          MICHIGAN                       R-N             MICH. COMP. LAWS ANN. §565. 29
                                                         (RECORDED) (BFP by quit claim)
          MINNESOTA                      R-N             MINN. STAT. ANN. §507.34
                                                         (RECORDED) (BFP by quit claim)
          MISSISSIPPI                    R-N             MISS. CODE ANN. §89-5-5 (FILED)
          MISSOURI                       N               MO. ANN. STAT. §§442.390, 442.400
                                                         (FILING)
          MONTANA                        R-N             MONT. CODE ANN. §70-21-304
                                                         (RECORDED)
          NEBRASKA                       R-N             NEB. REV. STAT. §76-238 (DELIVERED
                                                         FOR RECORDING)



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          NEVADA                         R-N             NEV. REV. STAT. ANN. §§111.320,
                                                         111.325 (FILING)
          NEW HAMPSHIRE N                                N.H. REV. STAT. ANN. §477:3-a
                                                         (RECORDED) (N.H. is race-notice per case
                                                         law: Amoskeog Bank v. Chagnon, 133 N.H.
                                                         11, 572 A. 2d 1153 (1990))
          NEW JERSEY                     R-N             N.J. STAT. ANN. §46:22-1 (LODGED)
          NEW MEXICO                     N               N.M. STAT. ANN. §14-9-3 (RECORDED)
                                                         (BFP by quit claim per case law: Mabie-
                                                         Lowrey Hardware Co. v. Ross, 26 N.M. 51,
                                                         189 P.42 (1920))
          NEW YORK                       R-N             N.Y CLS REAL PROP. LAW §291
                                                         (RECORDED)
          NORTH CAROLINA R                               N.C. GEN. STAT. §47-18, 47-20
                                                         (REGISTRATION)
          NORTH DAKOTA                   R-N             N.D. CENT. CODE §47-19-41
                                                         (DEPOSITED) (BFP by quit claim)
          OHIO                           N               OHIO REV. CODE ANN. §§5301.25
                                                         (FILED) (OTHER THAN MORTGAGES)
                                         R               OHIO REV. CODE ANN. §§5301.23
                                                         (PRESENTATION) (MORTGAGES)
          OKLAHOMA                       N               OKLA STAT. ANN. TIT. 16 §§15,16
                                                         (FILED)
          OREGON                         R-N             OR. REV. STAT. §93.640 (RECORDED)
          PENNSYLVANIA                   R-N             PA. STAT. ANN. TIT. 21 §351 EXCEPT
                                                         MORTGAGES (RECORDED)
                                         R/G             PA. STAT. ANN. TIT. 21 §622
                                                         MORTGAGES (left for record but purchase
                                                         money lien has 30-day grace period)
          RHODE ISLAND                   N               R.I. GEN. LAWS §34-11-1 (RECORDED)
          SOUTH CAROLINA R-N                             S.C. CODE ANN. §30-7-10 (FILING)
          SOUTH DAKOTA                   R-N             S.D. CODIFIED LAWS ANN. §43-28-17
                                                         (RECORDED)
          TENNESSEE                      N               TENN. CODE. ANN. §66-5-106
                                                         (REGISTERED)
          TEXAS                          N               TEX. PROP. CODE. ANN. §13.001
                                                         (FILED)
          UTAH                           R-N             UTAH CODE ANN. §57-3-103
                                                         (RECORDED)

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          VERMONT                        N               VT STAT. ANN. TIT. 27, §341,342
                                                         (RECORDED)
          VIRGINIA                       N               VA. CODE ANN. §55-96 (admitted to
                                                         record) (BFP by quit claim)
          WASHINGTON                     R-N             WASH. REV. CODE ANN. §65.08.070
                                                         (FILED)
          WEST VIRGINIA                  N               W.VA. CODE ANN. §40-1-9 (admitted to
                                                         record)
          WISCONSIN                      R-N             WIS. STAT. ANN. §706.08 (accepted for
                                                         record) (conveyance of mineral interest void
                                                         if not recorded within 30 days.)
          WYOMING                        R-N             WYO. STAT. §§34-1-120, 34-1-121
                                                         (DELIVERY)


          1.3    The Texas Grant System: From 1727 to 1821, the Texas territory was
subject to the Spanish monarchy. In 1821, Mexico declared independence and on January
31, 1824, Coahuila, New Leon, and Texas were united as the Internal Eastern State. On
November 13, 1835, the provisional government of Texas adopted its plans and powers.
This date is significant: subsequent transfers of title to land by former authorities are void,
although prior grants are recognized. The Republic of Texas declared its independence on
March 2, 1836 and became part of the United States on December 29, 1845 (but retained
title to vacant and unappropriated lands).5 The current special funds lands are the
Permanent School Fund, Asylum Fund, and University Fund.6
         1.4     Vacancies and Excess Acreage: Vacant lands are governed by Sections
51.171, et seq. of the Natural Resource Code. The state, its permittee, lessee, or assignee
may acquire a right of access to vacant land by eminent domain.7 Patents and sovereign
grants are recorded the General Land Office, although a copy may be recorded in the county
clerk's office.8 In some cases it is appropriate to review the files in the General Land Office,
even though a patent is recorded locally.9
                 Vacant land is land that does not lie within a prior patent or grant from the
sovereign. It is distinguished from excess acreage which exists if a grant of a tract purports
to include a stated acreage, but it is later discovered that the grant encompasses a greater
quantity of acreage. A vacancy is an area of unsurveyed public school land that is not in
conflict with previously granted land, has not been listed on the records of the land office as


5
 Tex. Nat. Res. Code Section 11.011
6
 Tex. Nat. Res. Code Sections 11.041 through 11.043
7
 Tex. Nat. Res. Code Section 11.079
8
 See Tex. Prop. Code Section 12.003; Tex. Nat. Res. Code Section 31.052
9
 Lange & Leopold, Land Titles and Title Examinations Section 151 (of particular significance are patents
after September 1, 1895 that may have been mineral classified, particularly prior to 1911 and caution
should be considered with regard to purposed reservations from 1919 to 1928 which did not in fact
relinquish title to minerals)

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public school land, and was not subject to an earlier application or litigation.10 To buy or
lease a vacancy a person must file an application with the county surveyor, if any, in the
county or with the county clerk if there is no county surveyor. The applicant must file an
application fee set by the commissioner. The county clerk or county surveyor must mark
the time of filing of the original and copy and the original must be recorded in a separate
book.11 The applicant must file with the commissioner a copy of the application with the
clerk or surveyor's mark no later than 310 days after the filing with the county clerk or
county surveyor. The applicant must pay a filing fee set by the commissioner.12 A person
may apply for good-faith claimant status at the time the application is filed or no later than
60 days after notice of acceptance is published. The commissioner shall, after expiration of
the 60 days after the period prescribed for publication declare whether a person is a good-
faith claimant.13 The commissioner shall require a deposit to cover estimated costs of the
survey and investigation.14 The commissioner may appoint the county surveyor or a
licensed state land surveyor to make a survey or may rely on an existing survey of such
surveyor and documents evidencing a vacancy.15 No later than 30 days before the surveyor
begins work, the commissioner shall give notice by certified mail, return receipt requested to
all interested parties concerning the appointment. The surveyor shall file the report of the
survey no later than 120 days after the date the surveyor was appointed. The time may be
extended as reasonably necessary.16. A copy of the report must be served by the
commissioner on necessary parties.17 An interested person may file exceptions to the survey
report, field notes, and plat no later than 30 days after the notice of completion was received
in the land office.18 The commissioner may; in the commissioner’s discretion, conduct a
hearing.19
                 If the commissioner concludes that the land is not a conflict with land
previously titled, awarded, or sold by the state, the commissioner may determine that a
vacancy exists. The vacancy determination is a final order and may be appealed. The
commissioner is not restricted to a description provided by the surveyor or applicant, and
shall adopt the description that best describes the vacancy. If the commissioner determines
that the land is not a vacancy, the commissioner shall endorse the file with the finding “not
vacant land.” Such finding is a final order and may be appealed.20 A person must file an
appeal to the district court in which a majority of the vacant land is located within 90 days
after the date the commissioner’s order is issued. The district court, in its discretion, may
allow an interested person who did not receive notice of a proceeding to file an appeal after
the expiration of the 90 day period. If the commissioner does not issue a final order on or
before the first anniversary of the date the application was accepted, the applicant may file


10
   Tex. Nat. Res. Code Section 51.172 (65)
11
   Tex. Nat. Res. Code Section 51.173176
12
   Tex. Nat. Res. Code Section 51.174176
13
   Tex. Nat. Res. Code Section 51, 178
14
   Tex. Nat. Res. Code Section 51.180
15
   Tex. Nat. Res. Code Section 51.178182
16
   Tex. Nat. Res. Code Section 51.183
17
   Tex. Nat. Res. Code Section 51.181184
18
   Tex. Nat. Res. Code Section 51.183184
19
   Tex. Nat. Res. Code Section 51.185
20
   Tex. Nat. Res. Code Section 51.186

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an action in District Court to determine whether a vacancy exists.21 The district court shall
conduct a de novo review of the commissioners’ order to determine whether a vacancy
exists.22 A good-faith claimant who has been notified by the Commissioner that a vacancy
exists has a preferential right to purchase or lease the vacancy. The right may be exercised
within 120 days of the commissioner’s final order and period for an appeal expired. The
good-faith claimant may purchase or lease the vacancy at the price set by the board subject
to the royalty reservations provided by the board, and in accordance with the law at the date
the application is filed.23 A good-faith claimant is a person who occupies or uses or has
occupied or used, or whose predecessors occupied or used the land for other than mineral,
sulfur and geothermal purposes, and who or whose predecessors enclosed the land or had
definite boundaries and possessed it at least 10 years in good faith belief the land was titled,
awarded or sold.24 If no good-faith claimant exercise a preferential right within the
applicable period, the applicant has a preferential period for the purchase or lease for 30
days after a determination that no good-faith claimant exists, or the expiration of the time for
exercising a preferential right. The board shall award an applicant, other than a good-faith
claimant, a perpetual non-participating royalty of not less than 1/32 or more than 1/16 of the
value of oil, gas, and sulfur, and 1% of the value of all geothermal other minerals
produced.25 The commissioner shall adopt rules necessary and convenient to administer
these provisions.26 The board shall set the terms and conditions for each sale and lease of a
vacancy, and shall adopt rules governing the time and conditions for sales and leases of a
vacancy.27
                 “When sovereign land is sold or disposed of to private persons and a
patent is not issued from the state or the republic passing the legal title, the legal title
remains with the sovereign entity. The private owner of the land is often unaware that a
title without a patent is ineffective and is without legal recourse to acquire the patent
because the lands of public domain are now constitutionally dedicated to the Permanent
School Fund (PSF). Under the Texas Constitution, the General Land Office and the
School Land Board manage and administer PSF, but prior to the 77th Legislature did not
have the authority to issue the patent because state law requires them to receive the land's
fair market value in full before the patent is issued. House Joint Resolution 52 (amended
Section 2A, of Article VII, of the Texas Constitution and surrenders) any claim of the
State of Texas to interest in certain lands in the A.P. Nance Survey in Bastrop
County….House Joint Resolution 52 amends the Texas Constitution to provide that the
State of Texas relinquishes and releases any claim of sovereign ownership or title to an
interest in and to the lands, excluding the minerals, in certain tracts in the A.P. Nance
Survey, Bastrop County. The bill provides that title to the interest in lands, excluding the       Formatted
minerals, is confirmed to the owners of the remaining interests in the lands.” Any funds
previously paid related to an outstanding land award or land payment obligation may not
be refunded. The General Land Office shall issue a patent to the holder of the record

21
   Tex. Nat. Res. Code Section 51.187
22
   Tex. Nat. Res. Code Section 51.188
23
   Tex. Nat. Res. Code Section 51.191
24
   Tex. Nat. Res. Code Section 51.172
25
   Tex. Nat. Res. Code Section 51.192
26
   Tex. Nat. Res. Code Section 51.174
27
   Tex. Nat. Res. Code Section 51.175

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title, but no filing or patent fee may be required, and the patent shall reserve all mineral
interest in the state.
                 “When sovereign land is sold or disposed of to private persons and a
patent is not issued from the state or the republic passing the legal title, the legal title
remains with the sovereign entity. The private owner of the land is often unaware that a
title without a patent is ineffective and is without legal recourse to acquire the patent
because the lands of public domain are now constitutionally dedicated to the Permanent
School Fund (PSF). Under the Texas Constitution, the General Land Office and the
School Land Board manage and administer PSF, but do not have the authority to issue the
patent because current law requires them to receive the land's fair market value in full
before the patent is issued. H.J.R. 53 (Vote 11/6/01); effective 1/1/02, (adds new Section       Formatted
2B, Article VII, Texas Constitution and authorizes) the legislature, under specified             Formatted
conditions, to provide for the surrender of interest in land belonging to the State of           Formatted
Texas.”
             Those conditions under which a patent may be issued, excluding mineral              Formatted
rights, are:
             (1) the land is surveyed, unsold, permanent school fund land according              Formatted
         to the records of the General Land Office;
             (2) the land is not patentable under the law in effect before January 1,            Formatted
         2002; and
             (3) the person claiming title to the land:                                          Formatted
                 (A) holds the land under color of title;                                        Formatted
                 (B) holds the land under a chain of title that originated on or                 Formatted
         before January 1, 1952;
                 (C) acquired the land without actual knowledge that title to the                Formatted
         land was vested in the State of Texas;
                 (D) has a deed to the land recorded in the appropriate county; and              Formatted
                 (E) has paid all taxes assessed on the land and any interest and                Formatted
         penalties associated with any period of tax delinquency.
             This section does not apply to:                                                     Formatted
             (1) beach land, submerged or filled land, or islands; or                            Formatted
             (2) land that has been determined to be state-owned by judicial                     Formatted
         decree.
             This section may not be used to:
             (1) resolve boundary disputes; or                                                   Formatted
             (2) change the mineral reservation in an existing patent”                           Formatted

                HB 1402 provides a new procedure for issuance of patents on
vacant land. New Section 11.084, Natural Resources Code, authorizes the School
Land Board, by unanimous vote, to approve a patent or release of the state’s
interest in land, excluding mineral rights, if the board finds that the land is
unpatented, the land is not patentable under law in effect before January 1, 2002,
and the person claiming title to the land (1) holds the land under color of title, (2)
holds the land under a chain of title that originated on or before January 1, 1952,
(3) acquired the land without actual knowledge that the title was vested in the
State of Texas, (4) had a deed to the land recorded in the appropriate county, (5)
has paid all taxes assessed on the land, and any interest and penalties. This statute

Curing Title Defects - Revised 19982001      Recording Statutes                          REC-8
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does not apply to beach land, submerged land, filled land, islands, land
determined to be state-owned by judicial decree. The statute may not be used to
resolve boundary disputes or change mineral reservations in existing patents.
Section 11.085 provides that the person claiming title may apply for the patent by
filing with the commissioner an application, and by attaching a copy of
supporting documentation. The commission may adopt rules to administer these
sections.
                 If the area patented exceeds the amount provided in the patent, the owner of
the land or a portion of the land may pay for the excess acreage in the patent or in the given
tract (one half of fair market value, exclusive of increased value due to improvements). The
person shall file with the commissioner a request for an appraisement of the land with
corrected field notes and a sworn statement of facts concerning the right to purchase. The
field notes shall describe the patented land and, if buying the excess in a portion, shall
describe the portion. If there is an excess, the commissioner shall execute a deed of
acquittance covering the land in the name of the original patentee or assigns, subject to
mineral reservations applicable to the patent. The transfer inures to the owners in proportion
to their holdings. The commissioner has no legal procedure to require that the deed be
acquired or that excess acreage be paid for.28
2.0    THE TEXAS PUBLIC RECORD SYSTEM
       2.1    County Clerk's Records: The county clerk must record instruments in a
well bound book, microfilm records or other medium (such as optical imaging).29
                     The instrument is considered recorded from the time filed.30
                     If made as provided by law, a certified copy has the same effect as the
original.31
                 The records in the clerk's office are open to the public at reasonable times. A
member of the public may make a copy of the records.32 Pursuant to Texas Government
Code Section 552.262, the General Services Commission shall adopt rules for use by
governmental bodies in determining charges for copies of public information in paper,
electronic or other forms not specifically set by law. The governmental body, other than the
state, may set the charge at no more than 25 per cent variance from the rules established
unless the governmental body requests an exemption.
                Legal papers must be no wider than 8-1/2 inches and no longer than 14
inches. The instrument must have a clearly identifying heading at the top of first page.
Names must be legibly typed or printed immediately below each signature. Printing, typing,
and handwriting must be clearly legible. Photostats and copies must have black print, type
or handwriting on a white background. Riders and attachments must comply with size
requirements. The filing fee is doubled for each page that fails to meet these requirements.
Failure to meet the print size requirement of eight-point type does not result in a higher fee.
If a page has larger riders or more riders than one, the fee is doubled for each rider. This
28
   Tex. Nat. Res. Code sec. 51.246
29
   Tex. Local Gov't Code Section 191.002
30
   Tex. Local Gov't Code Section 191.003
31
   Tex. Local Gov't Code Section 191.005
32
   Tex. Local Gov't Code Section 191.006

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section does not authorize a refusal to record a paper. Failure to comply does not alter or
invalidate any document and upon recordation, the instrument is deemed as full complying
with the provisions of the law dealing with recordation of documents of every type and
character.33
                The commissioners court may provide for a computerized electronic
information system by which it provides on a contractual basis, subject to a fee, direct
access to information relating to county records that is public information and is stored. The
commissioners may make the records available online only if the custodian agrees to allow
public access to the records.34
                 The clerk must note at the foot of the record the date and time that the
instrument was filed for recording. The clerk must make a record of the names of the parties
to the instrument in alphabetical order, the date of the instrument, the nature of the
instrument, and the time the instrument was filed. After recording the instrument, the clerk
shall deliver the instrument to the person entitled to it.35
                A clerk who does not maintain microfilm may divide the instruments into
seven classes including "Official Public Records of Real Property" and may consolidate the
records into a single class known as "Official Public Records." The clerk must so divide the
records if maintaining records on microfilm.36
                The clerk must maintain a well-bound alphabetical index to all recorded
deeds, powers of attorney, mortgages, and other instruments relating to real property and a
separate index to suits. The index must be a cross index that contains the names of the
grantors and grantees in alphabetical order. If the instrument is executed by a
representative, both that person and the principal’s name must be indexed. These provisions
do not apply to records maintained and indexed as required for microfilming.37
                 Records maintained on microfilm must be indexed and cross indexed in the
indexes under the names of the parties in the instrument. The index must give the names of
the parties, a brief description of the instrument, the date of filing, a brief description of the
property, if any, and the location of the microfilm image by roll or group number and by
image number or other suitable method.38
              The indexes must be periodically revised during the year to obtain a
complete alphabetical index for each calendar year.39
                Local records may be stored electronically such as on computer disks,
optical disks, or other machine-readable medium.40 Optical imagining was first adopted by
Nueces County and is being used or considered by a number of other counties.
              An index for an official public record may be stored or maintained by
computer, provided that a backup copy is stored separately.41

33
   Tex. Local Gov't Code Section 191.007
34
   Tex. Local Gov't Code Section 191.008
35
   Tex. Local Gov't Code Section 193.001
36
   Tex. Local Gov't Code Sections 193.002, 193.008
37
   Tex. Local Gov't Code Sections 193.003, 193.004
38
   Tex. Local Gov't Code Section 193.009
39
   Tex. Local Gov't Code Section 193.010
40
   Tex. Local Gov't Code sec. 194.0025s. 205.001, et seq.

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                Hardcopy records from which a microfilm, optical image record, or other
electronically stored record is made may be discarded if the microfilm, optical image, or
other electronically stored record meets required standards.42
               A reference to a volume and page, code number or file number of the "real
property records" (or similar words) is effective as reference to the instrument.43
                The statutory recording fee for an instrument is $3 for the first page and $2
for succeeding pages pursuant to Section 118.011, Local Government Code. The Records
Management and Preservation Fee may not exceed $5 for each instrument pursuant to
Section 118.0216, Local Government Code. The security fee of $1 per instrument may be
charged pursuant to Section 291.008, Local Government Code. The clerk charges double
the statutory recording fee if the names are not printed or typed below the signatures
pursuant to Section 291.008, Local Government Code. If more than 5 names must be
indexed the clerk charges 25 cents for each additional name pursuant to section 118.011,
Local Government Code. If the grantee's address is not shown the clerk charges the greater
of $25 or twice the statutory recording fee pursuant to Section 11.003, Property Code.
                Section 118.011, Local Government Code, allows the commissioners
court of a county adjacent to an international border to adopt a Record Archives Fee of
not more than $5. That provision expires September 1, 2008. New Section 118.025
provides that the Record Archives Fee is “for the preservation and restoration services
performed by the county clerk in connection with maintaining a county clerk’s records
archive.” The fee must be paid at the time a person, excluding a state agency, presents a
public document to the county clerk for recording or filing. A public document is any
instrument, document, paper, or other record that the county clerk is authorized to accept
for filing or maintaining. Records archive means public documents filed with the county
clerk before January 1, 1999. Preservation of such documents includes providing public
access to the public documents in a manner that reduces the risk of deterioration,
“excluding providing public access to public documents indexed geographically.”
Subsection 118.025 (f) states that “The funds may not be used to purchase, lease, or
develop computer software to geographically index public records, excluding indexing
public records by lot and block description as provided by Section 193.009(b) (4).”
Existing Section 193.009(b) (4) (which has not been amended) provides that, in indexing
of records on microfilm, the index entry must give “a brief description of the property, if
any.” The fee may not be collected after the county records archive preservation and
restoration is complete. Section 118.025 provides that if a county charges the Record
Archives Fee, a notice must be posted in a conspicuous place in the county clerk’s office
and the notice must state the amount of the fee. Section 118.025 expires September 1,
2008.
               Under prior law, a county or district clerk could charge a fee of $1 per
page for copies of public records maintained in a paper format or reproduced in a paper
format. The law did not establish a clear fee for non-paper copies of records maintained
in non-paper format, such as microfilm or an electronic format, since these documents

41
   Tex. Local Gov't Code Section 194.0065193.013
42
   Tex. Local Gov't Code Section 194.017205.008
43
   Tex. Prop. Code Section 11.007

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may or may not consist of a number of pages. Many county and district clerks store or
record public records in non-paper formats and are asked to produce copies of these
records in various forms. For these reasons fees for copies of public records varied
throughout the state. The law now standardizes the fees charged for copies of public
records produced in paper or other format. Amended Section 552.265, Government Code
“requires the charge for providing a paper copy made by a district or county clerk's office
(regardless of the source of the record, whether microfilm, CD, or otherwise, if the copy
is paper to be the charge provided by Chapter 51 (Clerks) of this code, Chapter 118 (Fees
Charged by County Officers), Local Government Code, or other applicable law.
Amended Section 118.011, Local Government Code, requires a county clerk who
provides a copy in a format other than paper of a record maintained by the clerk to
provide the copy and charge a fee in accordance with Sections 552.231 (Responding to
Requests for Information That Require Programming or Manipulation of Data) and
552.262 (Rules of the General Services Commission), Government Code so that the copy
will not be the charge made for paper copies, but generally will be the cost of producing a
CD or other copy format.” The $1 fee per page for hard copies applies whether the
request for 50 or fewer copies of public information is in one non-remote building or in
remote, physically connected buildings, and no additional charges may be made. 44 Under
both amended Section 118.011, Local Government Code, and prior Attorney General
Opinion OR-2371 (June 21,2000), copies of records provided on CD must be provided
for the costs of production under Chapter 552, Government Code, and not the $1 for each
document page.
                Section 2054.111 (e), Government Code, provides that a state agency or
local government (including a county), which uses the TexasOnline Project (a common
electronic infrastructure through which state agencies and local governments, including
licensing entities may operate), may charge a fee if “(1) the fee is necessary to recover
the actual costs directly and reasonably incurred by the agency or local government
because of the project; and (2) the (TexasOnline) authority approves the amount of the
fee.” Section 2054.111 also provides that “A local government (such as a county) may
not charge a fee under Subsection (e) that is otherwise prohibited under Section 195.006
(which provides that the fee for electronic filing of documents such as real property
records is the same as hardcopy filing) or 195.007 (which provides that the cost of
electronic copies of electronically filed documents is subject to the limits of Section
552.262, Government Code – substantially the cost of reproduction), Local Government
Code.”
        2.2    Electronic Transactions. The Uniform Electronic Transactions Act
(UETA) has been adopted effective January 1, 2002, with minor changes and
supplemental provisions relating to public records in conformity with the federal E-SIGN
legislation enacted in 2000. New Chapter 43, Business and Commerce Code, is the
Uniform Electronic Transactions Act.
               Section 43.002 contains definitions. Electronic record means “a record
created, generated, sent, communicated, received, or stored by electronic means.”
Record means “information that is inscribed on a tangible medium or that is stored in an

44
     A.G. Opinion No. JC-0292 (Oct. 11, 2000)

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electronic or other medium and is retrievable in perceivable form.” Electronic signature
means “an electronic sound, symbol, or process attached to or logically associated with a
record and executed or adopted by a person with the intent to sign the record.”
Transaction means “an action or set of actions occurring between two or more persons
relating to the conduct of business, commercial or governmental affairs.”
               Section 43.003 provides that UETA applies to electronic records and
electronic signatures relating to a transaction. It does not apply to wills, codicils or
testamentary trusts, or the UCC (except sections relating to statute of frauds). “A
transaction subject to this chapter is also subject to other applicable substantive law
(meaning that UETA does not generally deal with or affect substantive law or rights).”
               Section 43.004 provides that UETA applies only to electronic records and
electronic signatures created, generated, or stored on or after January 1, 2002.
               Section 43.005 provides that UETA does not require that the parties use
electronic signatures or electronic forms. The Chapter applies only to transactions if the
parties have agreed to conduct the transaction by electronic means. “Whether the parties
agree to conduct a transaction by electronic means is determined by the context and
surrounding circumstances, including the parties’ conduct.”
                Section 43.006 provides that UETA must be construed to facilitate
electronic transactions.
                 Section 43.007, which contains the essential terms of this bill, provides
that “a record or signature may not be denied legal effect or enforceability solely because
it is in electronic form…. A contract may not be denied legal effect or enforceability
solely because an electronic record was used in its formation…. If a law requires a record
to be in writing, an electronic record satisfies the law… If a law requires a signature, an
electronic signature satisfies the law.”
                Section 43.008 provides that if a law requires a person to provide, send, or
deliver information in writing to another person, the requirement is satisfied if the
information is provided, sent, or delivered in an electronic record “capable of retention by
the recipient at the time of receipt.” If another law requires a record to (1) be posted or
displayed in a certain manner, or (2) be sent, communicated or transmitted in a specified
manner, or (3) contain information formatted in a certain manner, then the record must be
posted or displayed in the manner required by other law, and the record must be sent,
communicated or transmitted as required by other law, and the record must contain the
formatting required by other law. A requirement that a record be sent by first class mail
may be varied by agreement, to the extent permitted by the other law.
                Section 43.009 provides that an electronic record or electronic signature is
attributable to a person if it was the act of the person. The act of the person may be
shown in any manner, including the efficacy of any security procedure.
                Section 43.010 provides that if a change or error in an electronic record
occurs in a transmission between the parties to the transaction and the parties have agreed
to use a security procedure, then the nonconforming party may avoid the effect of the
error if the other party did not conform, and conformity would have disclosed the error.
                     Section 43.011 provides that an acknowledgment or notarization may be

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satisfied if the electronic signature of the notary, together with the other information
required to be included for the notary acknowledgment is “attached to or logically
associated with the signature or record.” A seal is not required, but any required
information on the seal should be shown.
                Section 43.012 provides that “If a law requires that a record be retained,
the requirement is satisfied by retaining an electronic record of the information in the
record which… accurately reflects the information set forth in the record after it was first
generated…and … remains accessible for later reference…. This section does not
preclude a governmental agency of this state from specifying additional requirements for
the retention of a record subject to the agency’s jurisdiction (note that this provision
should authorize a governmental agency to make additional requirements for records
filed with the governmental agency, not private records of a business regulated by the
agency; the business should be able to avail itself of the cost savings of record retention
in electronic means if it complies with this section).”
               Section 43.013 provides that evidence of a record or signature may not be
excluded solely because it is in electronic form.
                Section 43.014 provides that a contract may be formed by the interaction
of electronic agents.
                  Section 43.015 provides that, unless otherwise agreed, an electronic record
is sent if it enters an information processing system outside the control of the sender and
is in a form capable of being processed by the recipient’s system; the electronic record is
received when it enters an information processing system that the recipient has
designated and is in a form capable of being processed by that system.
                Section 43.016 relates to transferable records, which include records that
would be promissory note, if the issuer of the electronic record has expressly agreed that
the electronic record is a transferable record. A person must have control of a
transferable record so that there is a single authoritative copy that is unique, identifiable,
and unalterable (except as permitted by this section). Any copy must be readily
identifiable as a copy that is not an authoritative copy. The person having control of the
transferable record is the holder.
               Section 43.017 provides that each state agency (which does not include
local governments) shall determine whether it will send and accept electronic records. If
a state agency does use electronic records and electronic signatures, the Department of
Information Resources (DIR) and Texas State Library and Archives Commission may,
pursuant to rulemaking the requirements and attributes for electronic records.
                Section 43.018 provides that DIR may encourage and promote consistency
and interoperability with similar requirements of governmental agencies of Texas and
other states and the federal government and nongovernmental persons.
            Section 43.019 provides that Chapter 43 modifies, limits or supersedes E-
SIGN (15 USC Section 7001, et seq) as authorized by 15 USC 7002.
               Section 43.020 provides that this chapter does not authorize any activity
prohibited by the Penal Code.


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                Amended Section 191.009, Local Government Code (which previously
has recognized that a county clerk may accept instruments by electronic filing if such
filing and recording comply with the rules adopted by the Texas State Library and
Archives Commission), provides that an instrument filed and recorded electronically is an
electronic record as defined by Section 43.002.
                 Amended Section 195.002, Local Government Code, provides that a
county clerk may accept any filed electronic record and may electronically record that
record if the filing and recording comply with the rules adopted by the Texas State
Library and Archives Commission. This amendment authorizes electronic records, such
as electronically created deeds and mortgages, to be filed and recorded.
                New Section 195.009, Local Government Code, provides that an
instrument is filed with the county clerk when it is received by the county clerk, unless
the county clerk rejects the filing within the time and manner provided by rules adopted
for electronic filings (which provide for rejection within one business day).
                 Section 6 of SB 393 (consistent with the exceptions in E-SIGN) provides
that UETA does not supersede the provisions of 15 USC 7001(c ) [relating to affirmative
consumer consent to consumer disclosures in electronic means] or 15 USC 7003(b)
[which includes exemptions for wills, court orders and notices], and does not authorize
electronic delivery of (1) any notice of cancellation or termination of utility services, (2)
any notice of default, acceleration, repossession, foreclosure or eviction, or right to cure
under a credit or rental agreement for a primary residence of an individual, (3) any notice
of cancellation of health insurance or life insurance (excluding annuities), (4) any notice
of recall of a product, or material failure of a product, that risks endangering health or
safety, or (5) any document required to accompany transportation or handling of
hazardous, toxic or dangerous materials. Section 6 of the bill states that if a federal
regulatory agency exempts a specified category or type of record from the requirements
relating to consent under 15 USC 7001(c ), or removes an exception from the type of
document from the application of 15 USC 7001, then the applicable regulatory agency of
this state may exempt the specified category or type of record.
              Section 7 of this bill states that it does not modify Chapter 15, Civil
Practice and Remedies Code [which relates to venue], or Section 35.531, Business and
Commerce Code [relating to applicable law for contract made over the internet].
                Section 121.004, Civil Practice and Remedies Code, relating to the
requirements of an acknowledgment, provides that “The application of an embossed seal
(for a notary acknowledgment) is not required on an electronically transmitted certificate
of an acknowledgment. Section 406.013, Government Code, requires that a notary
public’s seal be affixed by a seal press or stamp that embosses or prints a seal that
reproduces the elements of the seal under photographic methods. This requirement does
not apply to an electronically transmitted authenticated document, except that an
electronically transmitted authenticated document must legibly reproduce the required
elements of the seal.
                Pre-existing Texas law, enacted effective September 1, 1999, allows
electronic filing of instruments with the county clerk.


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                        A county clerk may accept instruments by electronic filing and record
                     the instruments electronically if the filing and recording comply with rules
                     adopted by the Texas State Library and Archives Commission.45
                        The Texas State Library and Archives Commission shall adopt rules
                     by which a county clerk may accept electronic filing and record
                     instruments electronically.46
                        Persons authorized to file documents electronically if the county clerk
                     chooses to accept electronic filings are: (1) Texas attorneys, (2) a bank,
                     savings and loan association, savings bank or credit union, (3) a federally
                     chartered lending institution, federal government-sponsored entity, an
                     instrumentality of the United States, or a person approved as a mortgagee
                     by the United States to make federally insured loans; (4) a person licensed
                     to make regulated loans in Texas, (5) a title insurance company or title
                     insurance agent licensed in Texas, or (6) an agency of Texas.47
                        A county clerk shall confirm or reject an electronic filing no later than
                     the first business day after the date the instrument is filed. If the county
                     clerk fails to provide such notice of rejection, the instrument is considered
                     accepted for filing.48
                        An instrument recorded electronically is considered in compliance
                     with the law as of the day filed. An instrument filed electronically must be
                     recorded as timely as instruments filed by other means.49
                        The fee for filing or recording an electronic instrument is the same as
                     the fee for filing a recording by other means.50
                        An instrument recorded electronically must be available for public
                     inspection in the same manner and same time as an instrument filed or
                     recorded by other means.51
                       The Electronic Recording Advisory Committee recommends rules for
                     adoption by the Texas State Library and Archives Commission. 52
                The Texas State Library and Archives Commission adopted regulations
relating to electronic filing of real property instruments effective December 6, 2000, at
Texas Administrative Code, Chapter 13, Sections 7,141, et seq. Those regulations
provide:
                        A participating county clerk is a county clerk who chooses to accept
                     real property instruments by electronic filing.53

45
   Tex. Local Gov’t Code Section 191.009(a).
46
   Tex. Local Gov’t Code Section 195.002.
47
   Tex. Local Gov’t Code Section 195.003.
48
   Tex. Local Gov’t Code Section 195.004
49
   Tex. Local Gov’t Code Section 195.005.
50
   Tex. Local Gov’t Code Section 195.006.
51
   Tex. Local Gov’t Code Section 195.007.
52
   Tex. Local Gov’t Code Section 195.008.
53
   Tex. Adm. Code Ch. 13, Section 7.141.

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                        An authorized filer and a participating county clerk must enter an
                     agreement of understanding relating to the terms of participation in the
                     county clerk’s electronic filing and recording program.54
                        Instruments filed electronically must provide fidelity to the original
                     appearance and retain the original content. Delivery mechanisms may
                     include network connections, direct electronic connection with the county
                     clerk, and physical delivery of media.55
                          The agreement of understanding shall address acknowledgement of
                     receipt, notice of confirmation (which shall include the recording
                     information), and notice of rejection. The authorized filer must return the
                     original instrument and the recording information to the party entitled to
                     it.56
                        Security procedures shall be implemented to ensure authenticity and
                     integrity of the electronically filed instrument, including the ability to
                     verify the identity of the filer and the ability to verify the instrument was
                     not altered since it was transmitted or filed.57
       2.3      Privacy. Previously governmental agencies were authorized to release the
personal information of peace officers, a county jailers, employees of the Texas
Department of Criminal Justice, and commissioned security officers for which an agency
received an "open records" request under certain conditions. Amended Section 552.117,
Government Code “prohibits state and local governmental agencies, such as a tax
appraisal district, from releasing such personal information. New Section 552.1175,
Government Code, provides that a governmental body that receives a confidentiality
request in writing from certain individuals (those who are peace officers, county jailers,
Texas Department of Criminal Justice employees, and commissioned security officers)
may not release … record information to the public that contains the individual's name,
home address, home telephone number, social security number, or whether that officer
has family members.” The provisions of Section 552.1175 appear to apply to real
property records. The law authorizes a confidentiality request for tax appraisal records
under new Section 25.025, Tax Code, but provides that it does not prevent public
disclosure of the information identifying the property by address if the information does
not identify an individual who has made the election of confidentiality.


        2.4     Title Company Records: A title insurance agent must own or lease and
control an abstract plant or be a participant in a bona fide joint abstract plant operation.58
An abstract plant must be geographically arranged, and currently kept to date showing all
instruments affecting lands within the county for at least 25 years prior to date of search.
The index must be arranged in geographic order. Alphabetical indices must be maintained.
The geographically indexed items will include easements, leases, deeds, mortgages, lis
54
   Tex. Adm. Code Ch. 13, Section 7.142.
55
   Tex. Adm. Code Ch. 13, Section 7.143.
56
   Tex. Adm. Code Ch. 13, Section 7.144.
57
   Tex. Adm. Code Ch. 13, Section 7.145.
58
   Tex. Ins. Code art. 9.02 (i)

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pendens, and restrictions affecting particular tracts of land. The alphabetical index will
include some suits, probates, divorces, abstracts of judgment, and tax liens. The records in
the plant must include map records, deeds, deeds of trust, mortgages, lis pendens, abstracts
of judgment, federal tax liens, mechanic's liens, attachment liens, divorces, probate records,
and fixture filings.59 The plant will be maintained and updated on a daily basis. Acreage
tracts broken out of patents or surveys are assigned arb (arbitrary) numbers for separate
identification of parcels in the survey.
                 Approximately 5645 licensed title insurance agencies, 4 domestic title
insurers and 22 foreign title insurers conduct business in the state. According to one survey,
a majority of the plants (including back plants) were sovereignty plants. A substantial
number of agents have a portion of their plants on computer (often a PC) and many of the
major metropolitan counties (such as Harris, Travis, Bexar, Dallas, Amarillo [Randall,
Potter] and El Paso) have joint computerized plants (for varying periods of time). A joint
plant will commonly entail back plant ownership by the participant (for the period prior to
the joint operation; the back plant may or may not be shared), microfilm or other copies of
the documents, maps, base files (files of subdivision or other larger tracts including an
examination, copies of relevant instruments, and a chain or run sheet of the title), and
guaranty files (separately or jointly used by the participants). A back plant (and some
current plants) may consist of geographic posting of cards, geographic posting of
instruments, and/or ledger or book posting. As can be imagined, the quality of plants varies.
With the advent of new technology, title companies will be able to receive daily tapes of
county clerk indexes and images. In some locations (in Florida) third parties (i.e. other than
title companies) can fully access the title plant and secure search information from a remote
location. Some recorders in the United States now provide real estate filings on the internet.
Regardless of the length of time covered by plants, such time is not necessarily indicative of
the length of search undertaken by the title company or of the scope of coverage of the title
policy. The policy does not contain a time limit or time of coverage. For example, the
policy is not limited to coverage of matters arising within the last 25 years simply because of
the plant requirements or because of the actual time of a possible examination. The periods
covered by examination of title vary: it is not uncommon for a title company to rely upon a
starter (such as a prior owner policy issued to the seller by another company).
                “A county commissioners court may provide space in the county courthouse
to a title company to examine, inspect, and copy public records, but the commissioners court
may not charge the title company for the space. Whether a commissioners court may lease
vacant space in the courthouse to a title company to perform functions other than examining,
inspecting, and copying public records and whether a commissioners court may permit the
private attorney who owns the title company to conduct his or her private practice in the
leased space depend upon two determination. First, the commissioners court must
determine whether the use of the rental space will interfere with proper use of the
courthouse. Second, the commissioners court must determine whether locating these
businesses within the courthouse is necessary to the convenience of those transacting
business in the courthouse.”60


59
     Procedural Rule P-12
60
     A. G. Letter Opinion No. 98-091 (Oct. 6, 1998)

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                 In some states Bar Standards address the period of search. In other
jurisdictions the decision is affected by Marketable Record Title Acts. Although Texas does
not have either of these guidelines, the Texas Title Examination Standards should be helpful
in other respects (such as guidelines for certain minimum practices).
                In addition to furnishing title insurance and escrow services, title companies
often perform various search services in the nature of abstract information, if perhaps more
limited in scope, particularly in urban areas. These may consist of nothing further searches,
deed searches (for CERCLA due diligence), last deed searches, or subdivision searches.


3.0       CONVEYANCING LAWS: Recording Statutes, Estoppel, Bona Fide
          Purchasers
          3.1        The Texas System
                 3.1.1 Pure Notice System: The pure-notice system generally provides that
a subsequent purchaser, lender or lien creditor who acquires his or her interest when the
prior rights are not reflected of record, will attain priority over the prior rights. It does not
matter that the instrument reflecting the prior rights is recorded before that instrument of the
subsequent purchaser or lienholder; therefore, under this system, one cannot assume that an
interest has priority simply because it was recorded first. Texas generally reflects that pure-
notice system61. The types of notice preventing a subsequent purchaser, lender or creditor
from attaining priority are possession, actual notice and constructive (record) notice.
                 3.1.2 Effectiveness of Unrecorded Instruments: Instruments such as
Deeds which are not filed of record, or which, though filed, are not properly acknowledged,
are still binding on the parties to the transaction and their heirs. Such unrecorded
instruments are also binding upon lien creditors with notice, and upon subsequent
purchasers or lenders who have notice, who do not furnish current consideration, or who do
not acquire their interest in good faith62.
          3.2        Requirements of Recordation to Protect Interests
                3.2.1 Recording Statutes: There are numerous recording statutes which
expressly or impliedly require that instruments be recorded in order to be effective against
innocent purchasers and, under certain circumstances, lien creditors. Examples of such
statutes include:
                     • Tex. Prop. Code Ann. Section 12.001 (the "may" record statute). This
                     statute provides that any instrument concerning real property may be

61
   (a)A conveyance of real property or an interest in real property or a mortgage or deed of trust is void as to
a creditor or to a subsequent purchaser for a valuable consideration without notice unless the instrument has
been acknowledged, sworn to, or proved and filed for record as required by law.
(b)The unrecorded instrument is binding on a party to the instrument, on the party's heirs, and on a
subsequent purchaser who does not pay a valuable consideration or who has notice of the instrument.
(c)This section does not apply to a financing statement, a security agreement filed as a financing statement,
or a continuation statement filed for record under the Business & Commerce Code. Tex. Prop. Code
Section 13.001
62
   Tex. Prop. Code Section 13.001; Watkins v. Edwards, 23 Tex. 443 (1859); Drake v. McGalin, 626 S.W.
2d 786 (Tex. App. 1981, no writ)

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                     recorded if it has been acknowledged, sworn to with a proper jurat, or proved
                     according to law.
                     • Tex. Prop. Code Ann. Section 13.001 (the "must" record statute). This
                     statute provides that conveyances of real estate and mortgages will be void
                     as to creditors and as to subsequent purchasers for valuable consideration
                     without notice unless acknowledged, sworn to, or proved according to law
                     and filed for record.
                     • Tex. Prop. Code Ann. Section 12.005 . This statute provides that the
                     court order partitioning or allowing recovery of title must be recorded in the
                     clerk's office where that land is located in order to be admissible in evidence.
                     The clerk may provide a summary form abstracting the pertinent aspects of
                     the order.
                     • Tex. Prop. Code Ann. Section 13.004. This statute provides that a
                     transfer or encumbrance made to a third party who has paid valuable
                     consideration and who does not have actual or constructive notice of the suit
                     is effective unless a lis pendens has been recorded in the county clerk's
                     office.
                     • Tex. Prop. Code Ann. Section 14.001, et seq.. The Uniform Federal
                     Lien Registration Act provides that notice of a lien or claim in favor of the
                     United States or a release of same may be recorded in the county clerks'
                     office.
                     • 11 U.S.C.A. 549. Under the Bankruptcy Code, the Trustee (or Debtor in
                     Possession) may file a copy or a notice of petition in the real property
                     records of any county in order to prevent post-petition transfers to good faith
                     purchasers.
                     • Tex. Prop. Code Ann. Section 12.014. This statute provides that a
                     transfer of a judgment may be filed in the papers of the suit if acknowledged
                     or sworn to as required by law for deeds.
                     • Tex. Civ. Prop. Code Ann. Section 12.007. Under Section 12.007, the
                     party seeking affirmative relief may file a notice of a pending action in an
                     eminent domain proceeding or during pendency of a suit affecting real
                     estate.
                     • 26 U.S.C.A. Section 6323. The Internal Revenue Code provides that
                     perfected federal tax liens will have priority over certain previously recorded
                     mortgages if the advances are made under those mortgages after the earlier
                     of (1) actual notice by the mortgagee of the federal tax lien, or (2) more than
                     45 days after the federal tax lien notice is filed. This provision would apply,
                     for example, to revolving credit advances; it would not apply to mortgages
                     securing advances under construction loans, letter of credit reimbursement
                     agreements, or surety reimbursement agreements.
                     • Tex. Bus. & Com. Code Ann. Section 35.01-35.09. These statutes
                     require that a notice of a utility security instrument may be filed in the
                     county records. The "utility" (such as a person engaged in generating

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                     electric power, transportation of gas, etc.) may then file mortgages (with
                     appropriate provisions) in the Secretary of State's office.
                         Tex. Nat. Res. Code Section 151.002. A bill of sale for timber or trees        Formatted: Bullets and Numbering
                     may be filed of record in the real property records, and it shall contain the
                     name of the owner of the land, description of the land, description of the
                     trees or timber, and representations and a warranty of the seller that the seller
                     is the owner..
                Amended Article 5221f, Article 14, Texas Revised Statutes, provides that
before the issuance of a certificate of attachment for a manufactured housing unit a
person who surrenders the manufacturer's certificate or the original document of title to
TDHCA may file a notice of attachment in the real property records of the county in
which the home is located. Amended Article 5221f, Section 17 sets forth provisions
regarding the notice of attachment and provides that, if a notice of attachment is to be
filed, a copy of the notice must be submitted with the manufacturer's certificate or the
original document of title surrendered for cancellation. Before issuance of a certificate of
attachment, a person who surrenders the manufacturer’s certificate or the original
document of title may file a notice of attachment in the real property records. That
notice must include information sufficient to identify the home and must contain the legal
description or the appropriate tract or parcel number of the real property on which the
home is located. The notice is valid for all purposes until the certificate of attachment is
issued and filed in the real property records.
                 Amended Article 5221f, Section 19, provides that, before issuance of a
certificate of attachment relating to a manufactured housing unit, a title insurance
company which surrenders the manufacturer’s certificate or the original document of title
shall file a notice of improvement attachment in the real property records. The notice
must state that the manufacturer’s certificate or the original document of title has been
surrendered for cancellation and a request has been made for issuance of a certificate of
attachment. The notice must sufficiently identify the home and a legal description or the
appropriate tract or parcel number of the real property on which the home is located. The
notice is valid until the certificate of attachment is recorded in the real property records.
New Article 5221f, Section 19A, provides that a manufactured home that is permanently
attached to the real property is classified and taxed as real property if the real property to
which the home is attached is titled in the name of the consumer under a deed or contract
for sale. A manufactured home is considered permanently attached if the home is
secured to a foundation and connected to a utility, including a utility providing water,
electric, natural gas, propane or butane gas, or wastewater services. The closing of the
transaction for acquisition of the manufactured home considered to be real property must
occur at the office of (1) a federally insured financial institution, (2) a title company, or
(3) an attorney at law. If the real property is purchased under a contract of sale, the
contract must be filed in the real property records. A manufactured home permanently
attached to real property before January 1, 2002, or placed in a manufactured home rental
community is not subject to this section 19A. Amended Section 2.001, Property Code,
provides that, except as otherwise provided in that section, a manufactured home is real
property. A manufactured home is personal property if the home is placed (1) on a lot,
temporarily or permanently, that is not titled in the consumer under a deed or contract of


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sale, or (2) in a manufactured home rental community. The Texas Department of
Housing and Community Affairs may not issue a document of title for a new and untitled
manufactured home at the first retail sale if the home is to be permanently installed by the
retailer on real property titled in the consumer under a deed or contract for sale. Before
installation the consumer must provide the retailer with a copy of the deed containing a
legal description. A title company or attorney at law conducting the closing under
Section 19A, Article 5221f, or conducting the resale by a financial institution or retailer
of a manufactured home that is to be permanently installed, or the retailer or retailer’s
agent shall file in the real property records a notice of installation not later than 30
working days after the date installation is complete and shall forward the certificate of
origin and a copy of the notice of installation to the Texas Department of Housing and
Community Affairs. The notice of installation serves as a completed cancellation
application. The notice of installation must be notarized, on a form prescribed by the
Texas Department of Housing and Community Affairs, contain a description of the
manufactured home (including make, model, dimensions, federal label number, state seal
number, and identification or serial number), include a verification of installation of the
manufactured home, include a wind zone designation for the county if known, be signed
by the retailer or installer.
                3.2.2 Examples of Instruments Covered by the Recording Requirements:
There are numerous instruments, including deeds and mortgages, that must be filed for
record in order to be effective against subsequent purchases, lenders or lien creditors. Other
instruments that must be filed for record, in order to be effective against such subsequent
parties, include:
                     Easement Appurtenant;63
                     Contract of Sale;64
                     Sheriff's Deed;65
                     Timber Deed or an Extension of a Timber Deed;66
                     Decree of Condemnation;67
                     Judgment Awarding Title (in either a federal or state court);68
                     Divorce Decree Awarding Title to a Spouse;69
                     Assignment of a Mortgage;70
                     Collateral Assignment of a Mortgage;71
                     Release of a Mortgage;72

63
   Pokorny v. Yudin, 188 S.W. 2d 185 (Tex. Civ. App.–El Paso 1945, no writ)
64
   Linn v. LeCompte, 47 Tex. 440 (1877)
65
   Griggs v. Montgomery, 22 S.W. 24 688 (Tex. Civ. App.–Beaumont 1929, no writ)
66
   Grogan-Cochran Lumber Co. v. McComb, 192 S.W. 2d 313 (Tex. Civ. App.–Beaumont 1945, writ ref'd)
67
   Parker v. Fort Worth & D.C. Ry. Co., 84 Tex. 333, 19 S.W. 518 (1892)
68
   Ball v. Norton, 238 S.W. 889 (Tex. Comm'n App. 1922, judgm't adopted)
69
   Prewitt v. United States, 792 F. 2d 1353 (5th Cir. 1986); Benn v Security Realty & Dev. Co., 54 S.W. 2d
146 (Tex. Civ. App.–Beaumont 1932, writ ref'd); Myers v. Crenshaw, 116 S.W. 2d 1125 (Tex. Civ. App.–
Texarkana 1938), aff'd, 134 Tex. 500, 137 S.W. 2d 7 (Tex. Comm'n App. 1940, opinion adopted)
70
   Woods v. Sparks, 59 S.W. 2d 361 (Tex. Comm'n App. 1933, judgm't adopted); Fannin Inv. & Dev. Co. v.
Neuhaus, 427 S.W. 2d 82 (Tex. Civ. App.–Houston [14th Dist.] 1968, no writ)
71
   Southern Bldg. & Loan Ass'n v. Brackett, 91 Tex. 44, 40 S.W. 719 (1897) (note, however, that the UCC
provides for perfection of the security interest in a promissory note by possession or by filing in the central
office of state of location of the debtor)

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                     Federal Tax Lien Notice;73
                     Notice of Federal Claim for Hazardous Waste Remedial or Removal
                             Action;74
                     Fixture Filings;75
                     State Tax Liens;76
                     State Lien for Hazardous Waste Clean-up;77
                     Notice of Bankruptcy;78
                     Written Extension of a Mortgage;79
                     Plat and a Dedicated Easement shown thereon;80
                     Ordinance Relocating an Alley.81
                3.2.3 Instruments Not Required to be Filed For Record in the Real
Property Records of the County Clerk's Office: There are various instruments, rights, or
proceedings which are not required to be filed for record in the county clerk's office in order
to be constructive notice to the world. Among those instruments, rights, or proceedings are:
                     •    Patents (the record of a patent in the General Land Office is notice to the
                          world);82
                     •    A parol partition of land;83
                     •    The probate of a will in Texas (such is considered an in rem proceeding
                          and notice to the world);84
                     •    Orders concerning the property in the probate proceeding in Texas, such
                          as an order setting aside property as homestead (therefore, a buyer from
                          an administrator by later court order could not be a bona fide
                          purchaser;85 however, the purchaser is not deemed on constructive notice
                          of an inventory or matters in the inventory in a probate proceeding);86
                     •    The appointment of a receiver (the property deemed to be in custodia
                          legis);87


72
   Biswell v. Gladney, 213 S.W. 256 (Tex. Comm'n App. 1919, judgm't adopted); Steele v. Orts, 390 S.W.
2d 343 (Tex. Civ. App.–Texarkana 1965, writ ref'd n.r.e)
73
   26 U.S.C.A. Section 6323; Tex. Prop. Code Section 14.001, et seq.
74
   42 U.S.C.A. Section 9607 ; Tex. Prop. Code Section 11.001, 14.001, et seq.
75
   Tex. Bus. & Com. Code Section 9.501313
76
   Tex. Tax Code Section 113.101; Tex. Lab. Code Section 213.058
77
   Tex. Health & Safety Code Section 361.194
78
   11 U.S.C.A. Section 549
79
   Tex. Civ. Prac. & Rem. Code Section 16.036
80
   City of Richland Hills v. Bertelsen, 724 S.W. 2d 428 (Tex. App.–Fort Worth 1987, no writ); Popplewell
v. City of Mission, 342 S.W. 2d 52 (Tex. Civ. App.–San Antonio 1960, writ ref'd n.r.e.)
81
   Lesley v. City of Rule, 255 S.W. 2d 312 (Tex. Civ. App.–Eastland 1953, writ ref'd n.r.e.)
82
   Arrowood v. Blount, 121 Tex. 52, 41 S.W. 2d 412 (Tex. 1931)
83
   Aycouk v. Kimbrough, 71 Tex. 330, 12 S.W. 71 (1887)
84
   Howth v. Farrar, 94 F. 2d 654 (5th Cir. 1938), cert. denied, 59 S. Ct. 75 (1938); Blocker v. Davis, 241
S.W. 2d 698 (Tex. Civ. App.–Fort Worth 1951, writ ref'd n.r.e.)
85
   Fosset v. McMahan, 74 Tex. 546, 12 S.W. 324 (1889)
86
   Permian Oil Co. v. Smith, 129 Tex. 413, 73 S.W. 2d 490 (Tex. 1934)
87
   First Southern Properties, Inc. v. Vallone, 533 S.W. 2d 339 (Tex. 1976)

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                     •    Heirship (although a judgment determining heirship may be recorded
                          and, although the Probate Code provides for prima facie evidence of
                          recited facts by five year recordation of affidavits of heirship, the lack of
                          a requirement of recordation of an heir's claim means that there can
                          generally be no bona fide purchaser as to an unknown heir);88
                         According to the Restatement of Property and some cases in other                  Formatted: Bullets and Numbering
                          jurisdictions, a purchase money mortgage given to a vendor or real estate
                          (even though not expressly detailed in the deed), in the absence of
                          contrary intent of the parties and subject to the operation of the recording
                          laws, has priority over a purchase money mortgage on the land given to a
                          lender who is not its vendor.89
                     •    Title acquired by prescription or adverse possession.90
          3.3        Constructive Notice
                  3.3.1 Definition: Instruments affecting real estate will be notice to third
parties if filed for record in the county in which the land is located.91 Notice by filing for
recordation ("constructive notice") is as effective as actual notice although, in a sense, it is
the opposite of actual notice. Constructive notice is the result of filing for recordation in
accordance with recording statutes. Unlike actual notice, where the inference of notice of an
outstanding interest may be rebutted, constructive notice is irrefutable.92
                 3.3.2 Effect of Filing: Once filed, instruments such as Deeds and Deeds of
Trust will constitute constructive notice even though never recorded. A party claiming
under the instrument has no duty to verify compliance with the law by the clerk by
recordation.93 Like a deed, a federal tax lien is effective as constructive notice from the time
filed, even though it was never recorded or indexed.94 The instrument is constructive notice
when delivered to the clerk and received in the clerk's official capacity.95 As a result, a
Deed filed after the filing of an abstract of judgment, but before the indexing of the abstract
of judgment, will take priority. Abstracts of judgment are not effective to create judgment
liens until recorded and indexed.96 Recordation in the wrong records (such as a mortgage in



88
   Tex. Prob. Code Sections 52, 52A; New York & T. Land Co. v. Hyland, 8 Tex. Civ. App. 601, 28 S.W.
206 (1894, writ ref'd); Ross v. Morrow, 85 Tex. 173, 19 S.W. 1090 (1892)
89
   ALH Holding Comp[any v. Bank of Telluride, 18 P. 3d 742 (Colo. 2000); Restatement (Third) of
Property, Section 7.2                                                                                       Formatted
90
   Houston Oil Co. v. Olive Sternenberg & Co., 222 S.W. 534 (Tex. Comm'n App. 1920, holding approved);
Heard v. Bowen, 184 S.W. 234 (Tex. Civ. App.–San Antonio 1916, writ ref'd); MacGregor v. Thompson, 7
Tex. Civ. App. 32, 26 S.W. 649 (1894, no writ)
91
   Tex. Prop. Code Section 11.001
92
   Hexter v. Pratt, 10 S.W. 2d 692 (Tex. Comm'n App. 1928, judgm't adopted)
93
   William Carlisle & Co. v. King, 103 Tex. 620, 133 S.W. 241 (1910); Throckmorton v. Price, 28 Tex. 605
(1866); David v. Roe, 271 S.W. 196 (Tex. Civ. App.–Fort Worth 1925, writ dism'd w.o.j.)
94
   Hanafy v. United States, 991 F. Supp. 794 (W. D. Tex. 1998)                                              Formatted
95
   Hanafy v. U.S., 991 F. Supp. 794 (N.D. Tex. 1998) (Federal tax lien notice is constructive notice from
time filed, even though not yet indexed)
96
   Belbaze v. Ratto, 69 Tex. 636, 7 S.W. 501 (1888); American Exch. Nat'l Bank v. Colonial Trust Co., 186
S.W. 361 (Tex. Civ. App.–Texarkana 1916, no writ)

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the Deed records) does not affect constructive notice.97 Acceptance of the instrument by the
clerk is conclusive that the appropriate recording fees have been received if the grantee's
mailing address is not listed.98 Even if no recording fees are received by the clerk, the clerk
must immediately or reasonably exercise the right to refuse to receive the instrument upon
the tender of the instrument. If the clerk receives and retains the instrument in his or her
official capacity awaiting payment for the fees, the clerk waives the privilege to require
payment and must file and record. The return of the instrument at a later date in such
circumstances will not affect the validity of the filing.99 “While a county clerk is not
expressly required by statute to file stamp the date and time an instrument arrives in the
clerk’s office for filing upon receiving and accepting the instrument, the county clerk must
devise some method for immediately and accurately noting that date and time. Just as the
clerk must develop a method for noting the date and time a particular instrument is delivered
in person, so must the clerk develop a method for noting the date and time of delivery of an
instrument that arrives in the mail. A county clerk must obtain the approval of the judiciary
he or she serves before changing the hours the clerk’s office is open to the public.”100
                3.3.3 Chain of Title: “Chain of title refers to the documents which show
the successive ownership history of the land. The chain of title is ‘the successive
conveyances, commencing with the patent from the government, each being a perfect
conveyance of the title down to and including the conveyance to the present holder.’”101The
recordation of an instrument is only constructive notice if it is in the "chain of title." An
instrument by the grantor is in the chain of title if executed (as of the date of signature
usually, not the date of recordation) by the grantor subsequent to the date of the Deed into
the grantor and prior to the date or execution of the Deed to the grantee. It is the date of the
conveyance itself, and not the date of recordation, that is controlling as to whether an
instrument is in the chain.102 A purchaser is required to look for conveyances made prior to
the purchase by his or her immediate vendor or by any remote vendor through whom he or
she claims. Even though a prior Deed was recorded after a subsequent Deed to a second
grantee out of the same grantor, the prior Deed is constructive notice to all subsequent
purchasers from the second grantee.103
               Examples of instruments which are not in the chain of title and which are not
constructive notice are:
                     • Recitations and restrictions in a Deed of Trust if the Deed of Trust has
                     been released of record;104
                     • Instruments executed by the person who was in the chain of title if the
                     instruments were executed before that person obtained title (for example, a
97
   Kennard v. Mabry, 78 Tex. 151, 14 S.W. 272 (1890); Knowles v. Ott, 34 S.W. 295 (Tex. Civ. App. 1895,
writ ref'd)
98
   Tex. Prop. Code Section 11.003
99
   American Exch. Nat'l Bank v. Colonial Trust Co., 186 S.W. 361 (Tex. Civ. App.–Texarkana 1916, no
writ)
100
    A.G. Opinion JC-0323 (January 5, 2001)
101
    Munawar v. Cadle Company, 2 S.W. 3d 12, 18 (Tex. App. – Corpus Christi 1999, pet. denied)             Formatted
102
    Fitzgerald v. LeGrande, 187 S.W. 2d 155 (Tex. Civ. App.–El Paso 1945, no writ)
103
    Houston Oil co. v. Kimball, 103 Tex. 94, 1223 S.W. 533 (1909); Delay v. Truitt, 182 S.W. 732 (Tex.
Civ. App.–Amarillo 1916, writ ref'd)
104
    Fleming v. Adams, 392 S.W. 2d 491 (Tex. Civ. App.–Houston [1st Dist.] 1965, writ ref'd n.r.e.)

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                     Deed from a former owner if the Deed was executed before the date of
                     execution of the Deed into that former owner);105
                     • Mortgages with after-acquired property clauses which are executed
                     before date of the Deed of the property into the mortgagor.106 (The case
                     indicted that such would be in the chain if recorded after date of Deed into
                     mortgagor.);
                     • A mortgage executed under an assumed name if title is in the real
                     name;107
                     • An affidavit by grantee under an unrecorded Deed is not in the grantor's
                     chain of title (and is not constructive notice to a later buyer from that
                     grantor);108
                     • Where a lienholder executes an erroneous release covering land and then
                     executes a correction of release reciting the land which remains subject to the
                     lien, but the lienholder was not joined in the correction instrument by the
                     mortgagors, the corrective release is not in the chain of title (likewise there is
                     no duty to check for Deeds made by the grantor after the Deed to the original
                     grantee);109
                        An exclusive sales agreement acknowledging that the equipment                      Formatted: Bullets and Numbering
                     installed on the land shall remain the property of the person installing the
                     equipment is not in the chain of title; it is not an essential link or
                     conveyance.110
                     • Where a mineral lessee was given a lease with warranties and without
                     exception to prior Deed of Trust and said lease was recorded, the Deed of
                     Trust was foreclosed and the lessor later acquired title, such lease remains
                     effective by estoppel and is also in the chain of title so that a later purchaser
                     from the lessor cannot take free of such lease;111
                     • Where the common grantor has previously conveyed by unrecorded
                     Deed to the first grantee and the first grantee has conveyed by recorded Deed
                     to the adverse claimant, a second grantee from the common grantor is not on
                     constructive notice of the recorded Deed to the adverse claimant since the
                     adverse claimant's Deed is not in the chain,112 (It will make no difference if
                     the first grantee's Deed to the adverse claimant recites that the first grantee
                     had received the Deed from the common grantor);113
                     • A Sheriff's Deed executed as to the debtor after the supposed fraudulent
                     conveyance from the debtor to the mother is not in the chain of title so that a
105
    Breen v. Morehead, 104 Tex. 254, 136 S.W. 1047 (1911)
106
    First Nat'l Bank v. Southwestern Lumber Co., 75 F.2d 814 (5th Cir. 1935)
107
    Bradford v. Lembke, 118 S.W. 159 (Tex. Civ. App. 1909, no writ)
108
    Reserve Petroleum co. v. Hutcheson, 254 S.W. 2d 802 (Tex. Civ. App.–Amarillo 1952, writ ref'd n.r.e.)
109
    Swanson v. Grassedonio, 647 S.W. 2d 716 (Tex. App.–Corpus Christi 1982, no writ)
110
    Munawar v. Cadle Company, 2 S.W. 3d 12 (Tex. App. – Corpus Christi 1999, pet. denied)                   Formatted
111
    Caswell v. Llano Oil Co., 120 Tex. 139, 36 S.W. 2d 208 (Tex. Comm'n App. 1931, opinion adopted)
112
    Southwest Title Ins. Co. v. Woods, 449 S.W. 2d 773 (Tex. 1970)
113
    Lumpkin v. Adams, 74 Tex. 96, 11 S.W. 1070 (1889)

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                     later buyer from the mother is not on constructive notice of the possible
                     fraudulent nature of the Deed to the mother, regardless of whether the Deed
                     to the mother or the Sheriff's Deed is recorded first;114
                     • The effect of an instrument not being in the chain of title may be that it
                     would be cut off by a bona fide purchaser pursuant to the recording statutes,
                     even if it is filed for record. For Example, A executes Deed to B, B executes
                     Deed to C, and neither Deed is recorded. Then A executes a subsequent
                     Deed to C which is recorded. The Deed to C from A is subsequent to the
                     Deed to B and is not in the chain of title as to a purchaser from B so that B's
                     purchaser could be a bona fide purchaser and cut off the rights of C.115
                        A bona fide purchase has a duty only of reasonable inquiry to determine           Formatted: Bullets and Numbering
                     whether a recorded deed of trust has been foreclosed, if no trustee’s deed is
                     of record. That duty of reasonable inquiry includes a search of the real
                     property records in the chain of title, and if the deed of trust remains
                     unsatisfied, an inquiry of the mortgage company identified in the recorded
                     deed of trust.116
                 3.3.4 Recitations of Instruments in Chain: A purchaser will be charged
with (constructive) notice of the contents of instruments in that person's chain. Even though
the purchaser has never had any actual knowledge of such instruments, the purchaser must
review the documents referred to in the instruments in his or her chain and any other
agreement to which such incorporated documents may also refer.117 If purchaser thereafter
fails to secure the referenced documents or secure information relating to the referenced
instruments, he or she may be relieved of (constructive) notice thus imputed by a sufficient
showing of diligent search to secure such documents.118 Such recitals will be considered as
notice even though the instrument in the chain may have covered only a portion of the
property in question and the referenced document may have affected only the remaining part
of the property now constituting one parcel.119
          Examples of the binding effect of such recitals are:
          •    A vendor's lien in the Deed in the chain, although the Deed was not of record;120
          • Recordation of a Deed of Trust imposes on a purchaser the duty of reasonable
          inquiry as to whether it has been foreclosed.121


114
    White v. MacGregor, 93 Tex. 556, 50 S.W. 564 (1899)
115
    Fullenwider v. Ferguson, 30 Tex. Civ. App. 156, 70 S.W. 222 (1902, writ ref'd)
116
    Realty Portfolio, Inc. v. Hamilton, 125 F. 3d 292 (5th Cir. 1997)                                      Formatted
117
    Houston Title Co. v. Ojeda De Toca, 733 S.W. 2d 325 (Tex. App.–Houston [14 Dist.] 1987), rev'd on
                                                                                                           Formatted
other grounds, Ojeda de Toca v. Wise, 748 S.W. 2d 449 (1988); Westland Oil Dev. Corp. v. Gulf Oil Corp.,
637 S.W. 2d 903 (Tex. 1982); Abercrombie v. Bright, 271 S.W. 2d 734 (Tex. Civ. App.–Eastland 1954,
writ ref'd n.r.e.); Waggoner v. Morrow, 932 S.W. 2d 627 (Tex. App–Houston [1st Dist] 1996, no writ)
(absent being unable to obtain a copy of the instrument upon diligent search and inquiry)
118
    Loomis v. Cobb, 159 S.W. 305 (Tex. Civ. App.–El Paso 1913, writ ref'd)
119
    Tuggle v. Cooke, 277 S.W. 2d 729 (Tex. Civ. App.–Fort Worth 1955, writ ref'd n.r.e.); MBank Abilene
N.A. v. Westwood Energy Inc., 723 S.W. 2d 246 (Tex. App.–Eastland 1986, no writ)
120
    Gilbough v. Runge, 99 Tex. 539, 91 S.W. 566 (1906)
121
    In re Hamilton, 125 F. 3d 292 (5th Cir. 1997)

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          • A reference in the Deed of Trust that it was subject to a prior unrecorded Deed
          of Trust is constructive notice of the unrecorded Deed of Trust;122
          • A recitation in a Deed referring to an unrecorded Deed of Trust puts all parties in
          the chain of title on notice of the Deed of Trust;123
          • A recitation in the Deed in the chain to a prior contract covering the land
          operates as constructive notice of such contract;124
          • A recitation in a Deed in the chain to other deeds of even date, which granted
          easements over the land.125
          • A recitation in the Deed that it was to be held in escrow for ninety (90) days, and
          that, if the debt was not paid, then the Deed was to be delivered to the grantee, was
          evidence that the Deed was a mortgage and put subsequent parties on notice
          thereof.126
             A reference to an unrecorded partition and easement (which was shown on the                     Formatted: Bullets and Numbering
          partition survey) which was not described as to the land in the deeds. A buyer is
          bound by recitals and references in or disclosed by an instrument that forms an
          essential link in the chain of title.127
                 Recitals in a Deed in the chain of title of the total consideration, which
shows clearly that the sales price was far less than the fair market value, will raise fact issues
of notice of a claim that the Deed was a mortgage when coupled with other facts, such as
continued possession by the grantor and late recording of the Deed.128 The purchaser is
occasionally charged with notice of the inadequacy of consideration recited in Deeds in his
or her chain of title so as to necessitate inquiry. Apparently this duty does not exist if the
Deed has been of record for numerous years and if it is a Deed in the chain prior to that to
his or her grantor. Examples of limits on the duty of inquiry caused by a recital would
include an instrument indicating that a person was a "Mrs." This recital does not indicate
that she was married at the time of acquisition of the property which recited her name in
such a manner but simply may imply that she had been married at one time. Therefore, it
does not give notice of rights of the heirs of her husband.129
                3.3.5 Adequacy of Description of Indebtedness: A Mortgage will
constitute constructive notice by recordation, even though it fails to mention the original




122
    Gordon-Sewall & Co. v. Walker, 258 S.W. 233 (Tex. Civ. App.–Beaumont 1924, writ dism'd w.o.j.)
123
    Garrett v. Parker, 39 S.W. 147 (Tex. Civ. App. 1896, writ ref'd)
124
    Houston Ice & Brewing Co. v. Henson, 93 S.W. 713 (Tex. Civ. App. 1906, no writ); Cumming v.
Johnson, 616 F.2d 1069, 1075 (9th Cir. 1979)
125
    Jones v. Fuller, 1993 Tex. App. LEXIS 1123; substituted op., reh’g denied, cause remanded, in part, 856
S.W. 2d 597, 1993 Tex. App. LEXIS 1754 (Tex. App. Waco 1993); later proceeding Jones v. McDonald,
880 S.W. 2d 260 (Tex. App. Waco 1994, no writ)
126
    Moorhead v. Ellison, 56 Tex. Civ. App. 444, 120 S.W. 1049 (1909, writ ref'd)
127
     Waggoner v. Morrow, 932 S.W. 2d 627 (Tex. App. – Houston [14th Dist.] 1996, no writ) (unrecorded         Formatted
partition essential link in the chain)
128                                                                                                           Formatted
    Ramirez v. Bell, 298 S.W. 924 (Tex. Civ. App.–Austin 1927, writ ref'd)
129
    Griggs v. Houston Oil Co., 213 S.W. 261 (Tex. Comm'n App. 1919, judgm't adopted)

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amount of the note, if the note can otherwise be reasonably identified, such as by date,
parties, maturity date and rate of interest.130
                3.3.6 Split-Up of Counties: If an instrument is recorded in the proper
county at the time but a new county containing the land conveyed is subsequently created,
such event will not affect the validity of the prior recording.131
                     3.3.7     Location of Counties: Counties may litigate the location of their
boundaries.132
                     Counties may settle bona fide boundary disputes out of court if they act in
good faith.133
                 3.3.8 Lis Pendens: A lis pendens notice is effective from the filing thereof.
Proper indexing is not required before the lis pendens is effective. Service on the other
parties is not required by the statutory lis pendens law, unlike the common law lis
pendens.134 The effect of the statutory lis pendens notice is to put those interested in a tract
of land on a duty of inquiry as to issues involved in the suit at time of acquisition. It does
not give constructive notice of matters not appearing on the face of the pleadings as that
time, although it is effective as to papers which were lost by the clerk.135 If one purchases
during the pendency of the suit after a notice of lis pendens is filed, then one is not a
necessary party to the suit and is bound by the results of a litigation and also by judicially
approved settlement reached by the parties in the pending suit.136 The lis pendens will
continue, not only until the judgment, but until a court-ordered sale (provided same is
secured within a reasonable time), during appeal and for the period the writ of error is sued
out.137 The doctrine of lis pendens will cease when the case is dismissed.138 If a purchaser
bought by Deed dated before the lis pendens was filed, he or she is not charged by or bound
by the suit or notice of lis pendens even though his or her Deed is not recorded until after the
notice of lis penden is filed.139 The notice of lis pendens may be extinguished: (a) where
there is only a claim for monetary damages and an attempt to establish a lien pursuant to the
judgment by abstract, or (b) under statute by depositing money "in the amount of the
judgment sought to be recovered, plus interest and costs likely to accrue during the
pendency of the action, or by requiring a bond for a sum double the amount of the requested

130
    Clementz v. M.T. Jones Lumber Co., 82 Tex. 424, 18 S.W. 599 (1891)
131
    Tex. Prop. Code Section 11.001; Lumpkin v. Muncey, 66 Tex. 311, 17 S.W. 732 (1886)
132
    Tarrant Co. v. Denton Co., 44051 43rd Jud. Dist. Court, Parker Co.; Tex. Local Gov’t Code Section           Formatted
22.009. In re Tarrant County, 16 S.W. 3d 914 (Tex. App. – Ft. Worth 2000 no pet.)
133                                                                                                             Formatted
    Yoakum County v. Gaines County, 139 Tex. 44S, 163 S. W. 2d 393 (1942)
134
    Tex. Prop. Code 13.004; Pope v. Beauchamp, 110 Tex. 271, 206 S.W. 928 (Tex. Comm'n App. 1918,
judgm't adopted); Humphrey v. Beaumont Irrigating Co., 41 Tex. Civ. App. 308, 93 S.W. 180 (1906, writ
ref'd)
135
    Kropp v. Prather, 526 S.W. 2d 283 (Tex. Civ. App.–Tyler 1975, writ ref'd n.r.e.); Latta v. Wiley, 92 S.W.
433 (Tex. Civ. App. 1905, writ ref'd)
136
    Hammon v. Southwestern Gas Pipeline, Inc., 821 F.2d 299 (5th Cir.), aff'd in part and vacated in part on
rehearing, 832 F.2d 55 (5th Cir. 1987); Black v. Burd, 255 S.W. 2d 553 (Tex. Civ. App.–Fort Worth 1953,
writ ref'd n.r.e.)
137
    Hartel v. Dishman, 135 Tex. 600, 145 S.W. 2d 865 (1940); Bryson & Hartgrove v. Boyce, 41 Tex. Civ.
App. 415, 92 S.W. 820 (1906, writ ref'd)
138
    Vehle v. Wagner, 201 S.W. 2d 636 (Tex. Civ. App.–El Paso 1946, writ ref'd n.r.e.)
139
    Martin v. Marquardt, 111 S.W. 2d 285 (Tex. Civ. App.–San Antonio 1937, writ dism'd w.o.j.)

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judgment, plus interest and costs."140 A court must cancel a notice of lis pendens if the suit
simply seeks imposition of a constructive trust on land based on allegations that the
defendant converted property and used proceeds to buy the land. A claim of a constructive
trust is no more than a collateral interest in the property.141 However, a lis pendens is
appropriate if the suit also seeks a resulting trust or rescission and restitution.142 A plaintiff
may not file a lis pendens to reflect a claim of a constructive trust only to satisfy a judgment
sought.143 However, a lis pendens is appropriate if the plaintiff seeks the land itself as the
product of unjust encroachment.144
                3.3.9 Identification of Land: An instrument is constructive notice only if it
reasonably describes the land.145 If the Deed mistakenly omits property sold pursuant to a
contract, such failure to convey by mutual mistake will prevent the Deed from being
constructive notice as to the omitted property.146
                 3.3.10 Acknowledgment: If an instrument is not properly acknowledged or
sworn to, it is not entitled to be recorded, and any recording is not constructive notice.147 If
an instrument is only acknowledged by the buyer or grantee, then it is not constructive
notice.148 A grant from the state or the United States does not have to be acknowledged.149
If an instrument properly acknowledged was recorded in the wrong county, then a certified
copy may be filed in the proper county and will then constitute constructive notice.150
                 Section 12.001 of the Property Code provides that an instrument concerning
real or personal property may be recorded if it has been acknowledged, sworn to with a
proper jurat, or proved according to law.
                3.3.11 Improper Recordation: Even though an instrument is properly
acknowledged, it will not constitute constructive notice if, because of error of the clerk or
otherwise, it does not appear from the record to be properly acknowledged.151
               3.3.12 Recordation of Junior Instrument: If a Junior Deed is executed
before the Senior Deed is recorded and the Junior Purchaser pays value and has no notice of

140
    Tex. Prop. Code 12.008; Ransopher v. Deer Trails, Ltd., 647 S.W. 2d 106 (Tex. App.-Houston [1st Dist.]
1983, no writ); Hughes v. Houston Northwest Medical Center, 647 S.W. 2d 5 (Tex. App.–Houston [1st
Dist.] 1982, writ dism'd); Lane v. Fritz, 404 S.W. 2d 110 (Tex. Civ. App.–Corpus Christi 1966, no writ)
141
    Flores v. Haberman, 915 S.W. 2d 477, 1995 Tex. LEXIS 136, 38 Tex. Sup. Ct. J. 1166 (Tex. 1995);
reh’g of cause overruled March 7, 1996
142
    First National Petroleum Corp. v. Lloyd, 908 S.W. 2d 23 (Tex. App.–Houston [1st Dist.] 1995, no writ)
(mandamus is appropriate remedy on issues of lis pendens)
143
    Flores v. Haberman, 915 S.W. 2d 477 (Tex. 1995)
144
    First National Petroleum Corp. v. Lloyd, 908 S.W. 2d 23 (Tex. App.–Houston [1st Dist] 1995, no writ)
145
    Wiseman v. Watters, 107 Tex. 96, 174 S.W. 815 (1915); Texas Osage Coop. Royalty v. Clark, 314 S.W.
2d 109 (Tex. Civ. App.–Amarillo 1958), writ ref'd n.r.e., 159 Tex. 441, 322 S.W. 2d 506 (1959)
146
    United States v. Creamer Indus., Inc., 349 F.2d 625 (5th Cir.), cert. denied, 382 U.S. 957 (1965); Prewitt
v. United States, 792 F.2d 1353 (5th Cir. 1986); Northeast Independent School District v. Aldredge, 528 S.
W. 2d 341 (Tex. Civ. App.–Amarillo 1975, writ ref'd n.r.e.)
147
    Tex. Prop. Code Section 12.001; Tandy v. Dickinson, 371 S.W. 2d 81 (Tex. Civ. App.–Amarillo 1963,
no writ)
148
    Sweeney v. Vasquez, 229 S.W. 2d 96 (Tex. Civ. App.–San Antonio 1950, writ ref'd)
149
    Tex. Prop. Code Section 12.006
150
    Tex. Prop. Code Section 12.004
151
    Hart v. Patterson, 17 Tex. Civ. App. 591, 43 S.W. 545 (1897, no writ); Weber v. Moss, 3 Tex. Civ. App.
13, 21 S.W. 609 (1893, no writ)

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the prior Deed, then it is immaterial (in a controversy with the Senior Purchaser) whether the
Junior Deed is ever recorded or is recorded before the Senior Deed.152 The grantee under
the Junior Deed will have superior rights.
          3.4        Actual Notice
                3.4.1 Definition: Actual notice means that notice which fairly puts a
person on inquiry; if the means of the knowledge are at hand and if pursued by a proper
inquiry, then the full truth would be ascertained. Means of knowledge with the duty of
using them are, in equity, equivalent to actual knowledge. If there is a duty to investigate,
then negligent ignorance is the same as actual knowledge. Actual knowledge, therefore,
consists of those things which a reasonably diligent inquiry would have disclosed.153
                3.4.2 Suspicious Circumstances: In addition to clear circumstances where
a person discloses the claim of an interest in property,154 other suspicious circumstances
may arouse the need of investigation. The refusal of a spouse to sign an instrument may
give notice of the inability of the other spouse to execute same. The omission of land from
an inventory may indicate the decedent did not own the land.155
                 3.4.3 Notice to Agent: Notice to an agent will constitute notice to the
principal, provided that the agent is one who had the power to act with reference to the
subject matter to which the notice relates. Notice to an agent will not include a person who
has no such power, such as a traveling salesman with power to sell goods and collect small
accounts but with no power to adjust an account in question pursuant to which a mortgage
was created.156 Notice given to a party's attorney by an abstract disclosing a lis pendens in a
case later dismissed will be considered notice to the principal.157 The purchaser is generally
legally charged with such facts as come to his or her attorney's knowledge in the course of
employment as an attorney to examine title.158 Therefore, even though a case may have
been dismissed for want of prosecution, the attorney and principal have a further obligation
to investigate the suit to determine if there is any claim which may remain outstanding
although the lis pendens does not continue as constructive notice to the world.159
               3.4.4 Notice to a Title Company in Examination: In doing an examination,
the title company acts exclusively for itself and is not acting as agent for the proposed



152
    Penny v. Adams, 420 S.W. 2d 820 (Tex. Civ. App.–Tyler 1967, writ ref'd); Matthews v. Houston Oil
Co., 299 S.W. 450 (Tex. Civ. App.–Beaumont 1927, no writ); Houston Oil Co. v. Kimball, 103 Tex. 94,
122 S.W. 533 (1910); Watkins v. Edwards, 23 Tex. 443 (1859); White v. McGregor, 92 Tex. 556, 50 S.W.
564 (1899)
153
    Hexter v. Pratt, 10 S.W. 2d 820 (Tex. Comm'n App. 1928, judgm't aff'd); Mann v. Old Republic National
Title Insurance Co., 975 S.W. 2d 347 (Tex. Civ. App.Houston [14th Dist.] 1998, no writ)
154
    Zamora v. Vela, 202 S.W. 215 (Tex. Civ. App.–San Antonio 1918, no writ); Price v. Cole, 35 Tex. 461
(1871), rev'd on other grounds, 45 Tex. 531 (1876)
155
    Permian Oil Co. v. Smith, 129 Tex. 413, 73 S.W. 2d 490 (1934); Fannin Bank v. Blystone, 417 S.W. 2d
502 (Tex. Civ. App.–Waco 1967), writ ref'd n.r.e., 424 S.W. 2d 626 (Tex. 1968)
156
    J.M. Radford Grocery Co. v. Citizens Nat'l Bank, 37 S.W. 2d 1080 (Tex. Civ. App.–El Paso 1931, writ
dism'd)
157
    Hexter v. Pratt, 10 S.W. 2d 692 (Tex. Comm'n App. 1928)
158
    Ramirez v. Bell, 298 S.W. 924 (Tex. Civ. App.–Austin 1927, writ ref'd)
159
    Hexter v. Pratt, 10 S.W. 2d at 692

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insured. In acting as escrow agent, the title company has a limited scope of authority to
close the transaction and not to investigate the title.160
                3.4.5 Continued Monitoring: If notice is given to a party, that party only
has a reasonable obligation of investigation at that time and does not have a continued
obligation of monitoring to see if an event transpires at a later day. For example, if tax
agents of the Internal Revenue Service are notified that a divorce is pending, this fact does
not obligate the IRS to continue to monitor to see if the divorce later occurs, and if the land
is awarded to the non-taxpayer.161
          3.5        Possession - Duty of Inquiry
                3.5.1 Limit of Inquiry: The purchaser is charged with notice of whatever
information he or she may secure from the party occupying the property as to that party's
claim and those under whom that party claims. However, if this inquiry would not reveal
any third party ownership, then the possession imputes no notice to the purchaser. For
example, if within one or two days of the sale, the purchaser talked to a party in possession
who simply said he was "just living there and did not know who claimed property, if
anyone", there was no imputed knowledge due to the party in possession.162
                3.5.2 Tenants: Possession by a tenant of the owner, whose interest is not
reflected of record, will be sufficient to put third party on notice of the owner's rights.163 If
the tenant was originally a tenant of a grantor who has conveyed by an unrecorded Deed, a
subsequent creditor or purchaser will be put on notice of the unrecorded Deed if the tenant
in possession has attorned to the grantee.164 However, if the tenant is not aware of the claim
of the grantee under the Deed and has not attorned165 to the grantee, then a subsequent
creditor or purchaser from the grantor is not put on notice of the unrecorded Deed. Such
creditor or subsequent grantee can only be presumed to have learned what would have been
disclosed by reasonable inquiry.166
                3.5.3 Possession by a Party Who Has a Recorded Interest: At times a party
in possession will have an interest of record, such as an undivided fee simple ownership or a
recorded lease. If that person also has another right or interest in the property, such as by an
unrecorded deed from other co-tenants or unrecorded extension of lease or option to
purchase, that person's possession puts a purchaser or creditor on duty of inquiry as to the
nature and extent of ownership by the person who has the interest of record, and as to
whether he or she has any other remaining interests not reflected of record.167 However,

160
    Tamburine v. Center Sav. Ass'n, 583 S.W. 2d 942 (Tex. Civ. App.–Tyler 1979, writ ref'd n.r.e.)
161
    Prewitt v. United States, 792 F.2d 1353 (5th Cir. 1986)
162
    Stanford v. Dumas, 137 S.W. 2d 1071 (Tex. Civ. App.–Amarillo 1940, writ dism'd judgmt cor.)
163
    Watkins v. Edwards, 23 Tex. 443 (1859)
164
    Garth v. Stuart, 59 Tex. Civ. App. 391, 125 S.W. 611 (1910, writ ref'd); Duncan v. Matula, 26 S.W. 638
(Tex. Civ. App. 1894, no writ)
165
    Attorn - To agree to become tenant to one as owner or landlord of an estate previously held of another, or
to agree to recognize a new owner of a property or estate and promise payment of rent to him. Black's Law
Dictionary 128 (West 1990).
166
    Bowles v. Belt, 159 S.W. 885 (Tex. Civ. App.–Amarillo 1913, writ ref'd)
167
    Alkas v. United Sav. Ass'n of Texas, Inc., 672 S.W. 2d 852 (Tex. App.–Corpus Christi 1984, writ ref'd
n.r.e.); Collum v. Sanger Bros., 98 Tex. 162, 82 S.W. 459 (1904); Aldridge v. North East Indep. School
Dist., 428 S.W. 2d 447 (Tex. Civ. App.–San Antonio 1968, writ ref'd); Long Falls Realty Co. v. Anchor

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there are certain older cases to the contrary on this issue, stating that if there is possession by
a party who has an interest reflected of record, then a subsequent creditor or purchaser has
no obligation to further inquire as to his or her rights.168 Possession of an entire tract gives
notice of the claim of the party in possession, even if that party holds record title to only a
portion of it.169
                3.5.4 Continued Possession by a Grantor under Recorded Deed: Normally,
continued possession by a grantor under a recorded deed does not put a subsequent
purchaser or lender under the obligation of inquiry as to whether the grantor has any claim
to the property. For example, there is no obligation to inquire as to whether the deed was,
instead, a mortgage, whether the deed was fraudulently secured, or whether the deed was
executed by mutual mistake.170 However, if the deed from the grantor was not promptly
recorded, then that fact, together with other circumstances, may cause the subsequent
purchaser or lender to have an obligation to inquire as to the reason for possession.171
Furthermore, long continued possession (such as six years) by the grantor after the execution
of the deed and inconsistent acts by the grantor, such as later conveyances, should put a later
purchaser on inquiry notice as to whether the grantor claims any rights in the property.172
                 3.5.5 Prior Possession: If possession by a third party has terminated before
the buyer acquires an interest in the land, the buyer has no obligation of inquiry as to the
rights of the third party in the property, even if the buyer knew of the former possession.173
                  3.5.6 Extent of Possession: Possession reflected simply by improvements,
but not by on-site occupancy of the property by the party responsible for the improvements
(for example, improvements such as a small chicken house), will not be sufficient
possession to put a buyer on inquiry as to the claim of right to the improvements. Such
improvements do not constitute notice that a third party claims the land.174 A purchaser is
charged with constructive notice, or “implied notice” of an occupant’s claims the purchaser
might have reasonably discovered on proper inquiry. The duty arises only if the possession
is (1) visible, (2) open, (3) exclusive, and (4) unequivocal. Possession as a tenant in a multi-
unit structure does not satisfy the criteria necessary to give constructive notice of a claim of
ownership, since one would expect occupants on such property. Such possession is not
exclusive or unequivocal.175

Elec. Co., 405 S.W. 2d 170 (Tex. Civ. App.–Dallas 1966, no writ); Kelly-Springfield Tire Co. v. Walker,
149 S.W. 2d 195 (Tex. Civ. App.–Beaumont 1940, writ dism'd judgmt. cor.)
168
    Linthicum v. Greer, 75 S.W. 2d 315 (Tex. Civ. App.–El Paso 1934, writ dism'd w.o.j.); David v. State
Bank, 238 S.W. 979 (Tex. Civ. App.–Amarillo 1922, no writ); Dallas Land & Loan Co. V. Sugg, 237 S.W.
955 (Tex. Civ. App.–Austin 1922, writ ref'd); Jackson v. Berliner, 127 S.W. 1160 (Tex. Civ. App. 1910,
writ ref'd); Hamilton v. Ingram, 13 Tex. Civ. App. 604, 35 S.W. 748 (1896, no writ)
169
    Alkas v. United Savings Ass'n, 672 S.W. 2d 852 (Tex. App.–Corpus Christi 1984, writ ref'd n.r.e.)
170
    Eylar v. Eylar, 60 Tex. 315 (1883); Dallas Trust & Sav. Bank v. Pickett, 59 S.W. 2d 1090 (Tex. Civ.
App.–Waco, 1933, writ dism'd w.o.j.); Jiles v. Citizens Nat'l Bank, 257 S.W. 945 (Tex. Civ. App.–
Texarkana 1923, writ dism'd w.o.j.); Gray v. Allen, 243 S.W. 684 (Tex. Civ. App.–San Antonio 1922, writ
dism'd w.o.j.), aff'd, 269 S.W. 510 (Tex. Civ. App.–San Antonio 1925, writ dism'd w.o.j.)
171
    Ramirez v. Bell, 298 S.W. 924 (Tex. Civ. App.–Austin 1927, writ ref'd)
172
    Anderson v. Barnwell, 52 S.W. 2d 96 (Tex. Civ. App.–Texarkana 1932), aff'd, Anderson v. Browley,
126 Tex. 182, 86 S.W. 2d 41 (Tex. Comm'n App. 1935, opinion adopted)
173
    Maxfield v. Pure Oil Co., 91 S.W. 2d 892 (Tex. Civ. App.–Dallas 1936, writ dism'd w.o.j.)
174
    Howard v. Leonard, 185 S.W. 2d 490 (Tex. Civ. App.–San Antonio 1945, writ ref'd w.o.m.)
175
    Madison v. Gordon, 39 S.W. 3d 604 (Tex. 2001)                                                          Formatted


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          3.6        Bona Fide Purchaser for Value in Good Faith Without Notice
                3.6.1 Definition: A bona fide purchaser is one who pays valuable
consideration without notice and in good faith.176 In order to be a purchaser for value
without notice, the party must show that, before the party had actual or constructive notice
of the recording of the prior instrument, there was a delivery of the deed (or deed of trust)
and payment of the purchase price or advance of the funds.177 A party can be a bona fide
purchaser or the equivalent even thought the party only acquires equitable title (such as a
contract purchaser who has paid the contract price). A party can also be a bona fide
mortgagee.178
               3.6.2 Bona Fide Purchaser as to Recordable Interest: A bona fide
purchaser for valuable consideration without notice may take free of the following:
                     •    Extensions of liens if the debt is more thant four years overdue;179
                     •    Unrecorded prior assignments of the lien (in relying on a release or
                          transfer from record owner);180
                     •    Decree awarding title in eminent domain action;181
                     •    A claim that the executor legally qualified did not have the authority to
                          convey the property;182
                     •    Claims of devisee to the property where the will was not probated within
                          four years of death and the purchaser relied upon the deed from heirs of
                          the decedent executed more than four years after death of the
                          decedent;183
                     •    Any later revocation of the will on which the purchaser relies;184
                     •    Claims of the beneficiaries or those claiming by, through or under the
                          person designated as Trustee in that person's individual capacity where
                          the instrument naming the person as Trustee does not identify the trust or
                          name the beneficiaries (to identify the trust there must be a disclosure of
                          the essential terms of the trust, not simply a reference to the date of an
                          instrument);185


176
    Sparks v. Taylor, 99 Tex. 411, 90 S.W. 485 (1906)
177
    LaFon v. Grimes, 86 F.2d 809 (5th Cir. 1936)
178
    Batts & Dean v. Scott, 37 Tex. 59 (1872); Graves v. Guaranty Bond State Bank, 161 S.W. 2d 118 (Tex.
Civ. App.–Texarkana 1942, no writ)
179
    Tex. Civ. Prac. & Rem. Code Section 16.037; Mercer v. Daoran Corp., 676 S.W. 2d 580 (Tex. 1984);
Cadle Co. v. Butler, 951 S.W. 2d 901 (Tex. App.Corpus Christi 1997, no writ)
180
    Fannin Inv. & Dev. Co. v. Neuhaus, 427 S.W. 2d 82 (Tex. Civ. App.–Houston [14th Dist.] 1968, no
writ); Steele v. Orts, 390 S.W. 2d 343 (Tex. Civ. App.–Texarkana 1965, writ ref'd n.r.e.)
181
    Parker v. Fort Worth & D.C. Ry. Co., 84 Tex. 333, 19 S.W. 518 (1892)
182
    Tex. Prob. Code Section 188; Dallas Services for Visually Impaired Children, Inc. & Broadmoor II, 635
S.W. 2d 572 (Tex. Civ. App.–Dallas 1982, writ ref'd n.r.e.)
183
    Tex. Prob. Code Section 73
184
    Glover v. Coit, 36 Tex. Civ. App. 104, 81 S.W. 136 (Tex. Civ. App. 1904, no writ)
185
    Tex. Prop. Code Section 101.001; Kagan v. Moody, 309 S.W. 2d 515 (Tex. Civ. App.–Houston 1957,
writ ref'd n.r.e.), cert. denied, 358 U.S. 873 (1958)

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                     •    An unrecorded Sheriff's Deed on a foreclosure for ad valorem taxes;186
                     •    A person purchasing from a partner acting on behalf of the general
                          partnership, and apparently carrying on in the usual way of the business
                          of the partnership, although the partner so acting has in fact no authority
                          to act for the partnership in the particular matter, and the purchaser has
                          no knowledge of the fact that the partner has no such authority or a
                          conveyance by a partner to a predecessor in title is binding if the
                          subsequent purchaser was a holder for value without knowledge of the
                          purchaser’s lack of authority.187
                     •    Unrecorded plats dedicating easements188 and unrecorded instruments
                          creating easements appurtenant.189
                     •    Unrecorded releases where the purchaser was acquiring the note and
                          lien;190
                     •    Pending suits concerning title where no lis pendens has been filed;191
                     •    Unrecorded judgments awarding title;192
                     •    Pending bankruptcy where no notice or copy of petition was filed in
                          connection with the pending case.193
                3.6.3 Bona Fide Purchaser v. Equitable Interest: A bona fide purchaser or
lender will take free of equitable interests including:
                     •    A claim of a right to reform due to a mutual mistake;194
                     •    A claim that the deed was procured by fraud;195
                     •    Rights of a spouse or heirs of such spouse whose name was not shown
                          on the deed vesting title to community title;196
                     •    Any claims of parties by adoption by estoppel;197
                     •    Any claim that the deed was, in actuality, given as a mortgage.198
186
    Griggs v. Montgomery, 22 S.W. 2d 688 (Tex. Civ. App.–Beaumont 1929, no writ)
187
    Tex. Rev. Civ. Stat. art. 6132b-3.02
188
    Popplewell v. City of Mission, 342 S.W. 2d 52 (Tex. Civ. App.–San Antonio 1960, writ ref'd, n.r.e.);
City of Richland Hills v. Bertelsen, 724 S.W. 2d 428 (Tex. App.–Fort Worth 1987, no writ)
189
    Pokorny v. Yudin, 188 S.W. 2d 185 (Tex. Civ. App.–El Paso 1945, no writ)
190
    Biswell v. Gladney, 213 S.W. 256 (Tex. Comm'n App. 1919, judgm't adopted)
191
    Tex. Prop. Code Section 13.004; Hartel v. Dishman, 135 Tex. 600, 145 S.W. 2d 865 (1940)
192
    Ball v. Norton, 238 S.W. 889 (Tex. Comm'n App. 1922, judgm't adopted)
193
    11 U.S.C.A. Section 549; but see In re McConville, 110 F. 3d 47, cert. denied, 139 L. Ed. 2d 315, 118 S.
Ct. 412, 66 U.S. L.W. 3336 (1997) (lender not protected, but constructive trust imposed for purchase
money advance); In re Rice, 83 B.R.8 (Bankr. v. 9th Cir. 1987) (assignee of mortgage not protected)
194
    Farley v. Deslande, 69 Tex. 458, 6 S.W. 786 (1888)
195
    Pure Oil Co. v. Swindall, 58 S.W. 2d 7 (Tex. Comm'n App. 1933, holding approved); Ramirez v. Bell,
298 S.W. 924 (Tex. Civ. App.–Austin 1927, writ ref'd); Hickman v. Hoffman, 11 Tex. Civ. App. 605, 33
S.W. 257 (1895, writ ref'd)
196
    Tex. Fam. Code 3.104; Harvey v. Humphreys, 178 S.W. 2d 733 (Tex. Civ. App.–Galveston 1944, writ
ref'd w.o.m.); Patty v. Middleton, 82 Tex. 586, 17 S.W. 909 (1891); Edwards v. Brown, 68 Tex. 329, 4
S.W. 380 (1887)
197
    Moran v. Adler, 570 S.W. 2d 883 (Tex. 1978)

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               3.6.4 Interests as to Which There Can be No Bona Fide Purchaser: There
can be no bona fide purchaser taking free and clear of the following interests, regardless of
whether these interests are reflected by a recorded instrument:
                     •         Title by adverse possession;199
                     •         A claim that a deed was given while the person was a minor or
                               insane;200
                     •         Any claim that the deed was forged;201
                     •         Any claim of heirs, whether known by the bona fide purchaser;202
                     •         A conveyance by a person who had the identical name of the record
                               owner but who was not the same person;203
                     •         A forced sale of the homestead in a probate court to pay unsecured
                               creditors;204
                     •         A mechanic's lien claim timely perfected for prior labor or
                               materials.205
                3.6.5 Valuable Consideration: In order to be a bona fide purchaser, the
bona fide purchaser must pay valuable consideration. The purchaser must show more than
cancellation of antecedent debt; execution of a deed or mortgage for antecedent debt is not
considered valuable consideration.206 Likewise, the crediting of a bid on a judgment is not
valuable consideration.207 However, the following will be considered valuable
consideration:
                     •         Payment of the purchase price;
                     •         A release of a valid lien on land;
                     •         A release of a chattel mortgage;
                     •         An unconditional obligation to assume a loan to a third party (where
                               approved by the lender at least);
198
    Brown v. Wilson, 29 S.W. 530 (Tex. Civ. App. 1895, no writ)
199
    Houston Oil Co. v. Olive Sternenberg, 222 S.W. 534 (Tex. Comm'n App. 1920, judgm't approved);
Heard v. Bowen, 184 S.W. 234 (Tex. Civ. App.–San Antonio 1916, writ ref'd); MacGregor v. Thompson, 7
Tex. Civ. App. 32, 26 S.W. 649 (1894, no writ)
200
    Gaston v. Bruton, 358 S.W. 2d 207 (Tex. Civ. App.–El Paso 1962, writ dism'd w.o.j.); Pure Oil Co. v.
Swindall, 58 S.W. 2d 7 (Tex. Comm'n App. 1933, opinion approved); McLean v. Stith, 50 Tex. Civ. App.
323, 112 S.W. 355 (1908, writ ref'd)
201
    Pure Oil Co. v. Swindall, 58 S.W. 2d 7 (Tex. Comm’n App. 1933, opinion approved)
202
    New York & T. Land v. Hyland, 8 Tex. Civ. App. 601, 28 S.W. 206 (1894, writ ref'd)
203
    Blocker v. Davis, 241 S.W. 2d 698 (Tex. Civ. App.–Fort Worth 1951, writ ref'd n.r.e.); Pure Oil Co. v.
Swindall, 58 S.W. 2d 7 (Tex. Comm'n app. 1933, opinion approved)
204
    Cline v. Niblo, 117 Tex. 474, 8 S.W. 2d 633 (1928); Mallou v. Payne & Vendig, 750 S.W. 2d 251, 256
(Tex. App.–Dallas 1988, no writ)
205
    Keating Implement & Mach. Co. v. Marshall Elec. Light & Power Co., 74 Tex. 605, 12 S.W. 489 (1889)
206
    Turner v. Cochran, 94 Tex. 480, 61 S.W. 923 (1901); Bowen v. Lansing Wagon Works, 91 Tex. 385, 43
S.W. 872 (1898); McKamey v. Thorp, 61 Tex. 648 (1884); Walter Connally & Co. v. Gaston, 295 S.W.
953 (Tex. Civ. App.–Texarkana 1927, writ dism'd w.o.j.), Jackson v. Waldstein, 10 Tex. Civ. App. 156, 30
S.W. 47 (1895, writ ref'd)
207
    Aycock v. Thompson, 146 S.W. 641 (Tex. Civ. App.–Galveston 1912, no writ)

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                     •         Extension of time for payment of a previously-outstanding loan;
                     •         The giving of a negotiable instrument to the seller;
                     •         The completed furnishing of a home and board to the seller.208
                 If the consideration given is grossly inadequate in comparison to the value of
the land (for example, a payment of 1/15th of the value of the land), then it will not be
considered valuable consideration or, in the alternative, it will raise the question of the lack
of good faith by the purchaser.209 Stock given by a purchaser can constitute valuable
consideration; in one transaction the stock was consideration because the corporation had
actual assets, the cooperation paid dividends, and the stock was later sold for value.210In
order to prove that a purchaser is a bona fide purchaser, there must be a showing of
consideration. A mere recital to that effect in the deed is not sufficient evidence.211 Where
the purchaser becomes aware of the adverse interest by reason of its recordation or actual
notice before payment in full of the consideration, then the purchaser is a bona fide
purchaser only on a pro tanto basis. The relief awarded is dependent upon the equities of the
case: there may be a lien in favor of the buyer for the amount paid, there may be a grant to
the buyer of a portion of the land paid for, or there may be a granting of the land to the buyer
with a right by the true owner to payments of amounts still owed.212 A mortgagee making
advances under its future indebtedness clause after notice of the prior adverse claim (e.g., a
previously unrecorded instrument) will not have priority as to such advances.213
Consideration will be deemed to be paid when effectively delivered, even though not
actually received by the seller prior to notice to the bona fide purchase, such as where
money is held in a bank account for the seller after all conditions for delivery were met.214
                3.6.6 Burden of Proof As to Bona Fide Purchaser Status: The burden of
proof lies with the buyer or mortgagee to prove that it is a bona fide purchaser or lender for


208
    Lafon v. Grimes, 86 F.2d 809 (5th Cir. 1936); Tillman v. Heller, 78 Tex. 598, 14 S.W. 700 (1890);
Morris v. Meek, 57 Tex. 385 (1882); Batts & Dean v. Scott, 37 Tex. 59 (1872); Reserve Petroleum Co. v.
Hutcheson, 254 S.W. 2d 802 (Tex. Civ. App.–Amarillo 1952, writ ref. n.r.e.); Red River Nat'l Bank v.
Latimer, 110 S.W. 2d 232 (Tex. Civ. App.–Texarkana 1937, no writ); J.M. Radford Grocery v. Citizens
Nat'l Bank, 37 S.W. 2d 1080 (Tex. Civ. App.–El Paso 1931, writ dism'd); Jiles v. Citizens Nat'l Bank, 257
S.W. 945 (Tex. Civ. App.–Texarkana 1923, writ dism'd); City of Houston v. Ritchie, 191 S.W. 362 (Tex.
Civ. App.–Galveston 1916, writ ref'd); Keenon v. Burkhardt, 162 S.W. 483 (Tex. Civ. App.–Amarillo
1913, writ ref'd); Beavers v. Baker, 58 Tex. Civ. App. 35, 124 S.W. 450 (1909, no writ ref'd); Davis v.
Carter, 55 Tex. Civ. App. 423, 119 S.W. 724 (1909, no writ)
209
    Nichols-Stewart v. Crosley, 87 Tex. 443, 29 S.W. 380 (1895); Neeley v. Intercity Management Corp.,
623 S.W. 2d 942 (Tex. App.–Houston [ist Dist.] 1981, no writ); Hicks v. Sias, 102 S.W. 2d 460 (Tex. Civ.
App.–Beaumont 1937, writ ref'd); McAnnally v. Panther, 26 S.W. 2d 478 (Tex. Civ. App.–Eastland 1930,
no writ); Beckham v. Medlock, 19 Tex. Civ. App. 61, 46 S.W. 402 (1898, writ ref'd)
210
     McRae Exploration & Production, Inc. v. Reserve Petroleum Company, 962 S.W. 2d 626 (Tex. App. –
Waco 1998, no pet.)                                                                                         Formatted
211
    Watkins v. Edwards, 23 Tex. 443 (1859); Summerlin v. Smith, 279 S.W. 284 (Tex. Civ. App.–Texarkana
1925, writ dism'd w.o.j.)
212
    Kenedy Pasture Co. v. State, 111 Tex. 200, 231 S.W. 683 (1921), cert. denied, 258 U.S. 617 (1922);
Durst v. Daugherty, 81 Tex. 650, 17 S.W. 388 (1891)
213
    J.M. Radford Grocery v. Citizens Nat'l Bank, 37 S.W. 2d 1080 (Tex. Civ. App.–El Paso 1931, writ
dism'd)
214
    Sparks v. Taylor, 99 Tex. 411, 90 S.W. 485 (1906)

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value against prior unrecorded interest such as unrecorded deeds or pending suits.215
However, the burden of proof lies on the owner of an equitable interest (such as a right to
reform a deed or a resulting trust) to show that the subsequent purchaser was not a bona fide
purchaser for value without notice.216
                3.6.7 Application of Bona Fide Purchaser Status to Different Kinds of
Transfers: A purchaser at an execution sale may be a bona fide purchaser.217 A purchaser
from an heir of the record owner can be a bona fide purchaser as to unrecorded prior deeds
from the deceased record owner.218 Likewise, a person may be an innocent purchaser at an
administrator's or executor's sale as to prior unrecorded deeds by the decedent.219 A trustee
or debtor in possession in a bankruptcy is treated as a bona fide purchaser and may take free
and clear of prior unrecorded transfers by the debtor.220 An oil and gas lessee can be a bona
fide purchaser; it is not treated as simply having acquired an option.221
                3.6.8 Statutes: Some statutes other than the "must" recording law also
provide protection to bona fide purchasers. A third party may rely upon the presumed
authority of a spouse who is the record owner to convey or deal with nonexempt property.222
                  A beneficiary may not question a conveyance, transfer or encumbrance by
the trustee if trust is not identified and the names of the beneficiaries are not disclosed in the
conveyance or transfer to the trustee.223
                 Sections 2252.091-2252.094, Government Code, prohibit a government
entity from buying or selling land to or from a trustee until the trustee submits a copy of the
trust “identifying the true owners.” Otherwise, the conveyance will be void.
               Under Section 6 of the Texas Uniform Unincorporated Nonprofit
Association Act, set forth in Art. 1396-70.01, a person who gives value without notice that a
person acting on behalf of the Association lacks authority may conclusively rely upon a
statement of authority recorded in the county clerk's office.224
               A bona fide purchaser for value may rely upon an affidavit stating that an
executory contract was properly forfeited pursuant to Sections 5.061, et seq. of the Property
Code, if the buyer under the forfeited contract is not in possession of the land.225 Under the

215
    Raposa v. Johnson, 693 S.W. 2d 43 (Tex. App.–Fort Worth 1985, writ ref'd n.r.e.); Westland Oil Dev.
Corp. v. Gulf Oil, 637 S.W. 2d 903 (Tex. 1982); Hartel v. Dishman, 135 Tex. 600, 145 S.W. 2d 865
(1940); Turner v. Cochran, 94 Tex. 480, 61 S.W. 923 (1901); Jackson v. Waldstein, 10 Tex. Civ. App. 156,
30 S.W. 47 (1895, writ ref'd)
216
    Neeley v. Intercity Management Corp., 623 S.W. 2d 942 (Tex. App.–Houston [1st Dist.] 1981, no writ);
Miles v. Martin, 159 Tex. 336, 321 S.W. 2d 62 (1959); Delay v. Truitt, 182 S.W. 732 (Tex. Civ. App.–
Amarillo 1916, writ ref'd); Mangum v. White, 16 Tex. Civ. App. 254, 41 S.W. 80 (1897, no writ)
217
    Plumb v. Kleimann, 234 S.W. 2d 444 (Tex. Civ. App.–Galveston 1950, writ ref'd n.r.e.); Smith v. Olson,
23 Tex. Civ. App. 458, 56 S.W. 568 (1900, writ ref'd)
218
    Keenon v. Burkhardt, 162 S.W. 483 (Tex. Civ. App.–Amarillo 1913, writ ref'd)
219
    Lumpkin v. Adams, 11 S.W. 1070 (Tex. 1889); Jackson v. Berliner, 127 S.W. 1160 (Tex. Civ. App.
1910, writ ref'd)
220
    11 U.S.C.A. Section 544
221
    Deaton v. Rush, 113 Tex. 176, 252 S.W. 1025 (Tex. Comm'n App. 1923, opinion adopted)
222
    Tex. Fam. Code Section 3.104
223
    Tex. Prop. Code Sections 101.001, 114.082
224
     Tex. Rev. Civ. State. art. 1396-70.01
225
     Tex. Prop. Code Section 5.063 (c)

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Texas Property Code Section 5.066, the seller must conduct a nonjudicial sale of the land if
the buyer defaults on a executory contract to buy land used or to be used as a residence.
This section provides that a purchaser for value who relies on a affidavit regarding the sale
acquires title free of the contract if the buyer under the contract is not in possession.226
               Section 17 (Section 141.017, Property Code) of the Texas Uniform Transfers
to Minors Act (Chapter 141, Property Code) provides that a third person in good faith may
deal with any person purporting to make a transfer or act in the capacity or the custodian.227
                A Durable Power or Attorney remains effective as to a person who, without
actual knowledge of the termination of a Durable Power of Attorney by revocation, by the
principal's death, by annulment of marriage or divorce from the agent, or by the qualification
of a guardian of the estate of the principal, acts in good faith under or in reliance on the
power. As to acts taken in good-faith reliance on an affidavit of lack of knowledge of
termination of the Power of Attorney, the affidavit is conclusive.228
                 A good faith purchaser for valuable consideration without knowledge who
relies on an affidavit of heirship takes title free of the interest of a child if the child is not
mentioned in the affidavit and if the child has not under a court decree been found to be
entitled to treatment as a child (and was not otherwise recognized as a child).229
               A bona fide purchaser for value without actual notice of the claim of an
omitted heir who acquires title after a judgment determining heirship takes title free of that
interest.230
               A purchaser for value in good faith without knowledge of a will who
acquires property from the heirs of a decedent more than four years from the date of death of
the decedent takes title which the heirs would have had in the absence of a will.231
               A bona fide purchaser without actual notice of the claim of an omitted
person may conclusively rely upon a judgment determining those persons entitled to receive
property and the persons' shares under a probated will (as a muniment of title). 232
               A bona fide purchaser for value without actual or constructive notice of an
undisclosed heir may rely upon the Small Estates affidavit concerning the homestead.233
                 An innocent purchaser for valuable consideration in good faith and without
notice of any illegality in the title may rely upon acts of a legally qualified executor,
administrator, or guardian.234
               If a purchaser for value buys property from a person receiving property
based on a presumption of death, the right of restoration does not extend to that property.235

226
    Tex. Prop. Code Section 5.066
227
    Tex. Prop. Code Section 114.017
228
    Tex. Prob. Code Sections 486, 487
229
    Tex. Prob. Code Section 42(b) (2)
230
    Tex. Prob. Code Section 55
231
    Tex. Prob. Code Section 73(b)
232
    Tex. Prob. Code Section 89C
233
    Tex. Prob. Code Section 137(c)
234
    Tex. Prob. Code Sections 188, 662
235
    Tex. Civ. Prac. & Rem. Code Section 133.003; Tex. Prob. Code Section 72

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                 Unless the partner does not have authority and the person with whom the
partner is dealing knows of the lack of authority, the act of the partner for apparently
carrying on in the usual way the business of the partnership binds the partnership. A transfer
by the partner binds the partnership if the real property has been conveyed to a subsequent
purchaser for value without knowledge of the lack of authority.236
                An act of the officer, agent, manager, or member of the Limited Liability
Company for apparently carrying on in the usual way the business of the company binds the
company if the person with whom the agent of the company dealt did not have knowledge
of the lack of authority. 237
                  3.6.9 Types of Deeds On Which a Bona Fide Purchaser Can Rely: A party
acquiring by a pure "right, title and interest" quitclaim deed cannot be a bona fide purchaser
for value as to prior unrecorded instruments or equitable interests. The test is not whether
the word "quitclaim" is used but whether the grantor's "right, title and interest" as
distinguished from the land itself, was conveyed; a deed which has a warranty clause but
purports only to convey the "right and title" of the grantor will, nevertheless, be a quitclaim
deed. If a deed is a quitclaim deed, then the grantee and all of those claiming under the
grantee will be deemed to be on notice of unrecorded instruments by the grantor.238 A
purchaser of a quitclaim deed, such as a constable’s deed cannot take the protection afforded
a bona fide purchaser, because the grantee in a quitclaim deed is not an innocent purchaser
without notice.239A person may be a bona fide purchaser even though there is no warranty in
the deed, such as when the deed says "all my interest...being an undivided one-half interest",
or such as when the deed from the administrator's sale (or other representative's sale)
appears to be in the nature of a quitclaim, if it appears that the purpose was to sell and buy
the land itself, not a mere chance at title, although the deed may have conveyed "all the
right, title and interest of the estate".240 The omission of a covenant of warranty, while not
preventing bona fide purchaser status, may be a circumstance to be considered the issue of
whether the grantees purchased in good faith or with knowledge.241
                3.6.10 Date That One is a Bona Fide Purchaser: The date to determine when
a person is a bona fide purchaser is the delivery date of the deed, which is presumed to be
the date of execution of the deed and not the date of acknowledgement of the deed.242
                3.6.11 Recording by Bona Fide Purchaser: It is immaterial whether the
junior deed of the bona fide purchaser is ever recorded or whether it is recorded before the
senior deed. Failure to record does not affect the status of the purchaser as a bona fide
purchaser.243 Likewise, failure of a prior purchaser to record a deed before a notice of lis

236
    Tex. Rev. Civ. Stat. art. 6132b-3.02
237
    Tex. Rev. Civ. Stat. art. 1528n Section 2.21
238
    Threadgill v. Bickerstaff, 87 Tex. 520, 29 S.W. 757 (1895); Rodgers v. Burchard, 34 Tex. 442 (1870);
Houston Oil Co. v. Niles, 255 S.W. 604 (Tex. Comm'n App. 1923, holding approved); Miller v. Pullman,
72 S.W. 2d 379 (Tex. Civ. App.–Galveston 1934, writ ref'd)
239
    Diversified, Inc. v. Hall, 23 S.W. 3d 403 (Tex. App. – Houston [1st Dist] 2000, pet. denied)           Formatted
240
    White v. Dupree, 91 Tex. 66, 40 S.W. 962 (1897); Bryan v. Thomas, 365 S.W. 2d 628 (Tex 1963)
241                                                                                                        Formatted
    Davidson v. Ryle, 103 Tex. 209, 124 S.W. 616 (1910); Keenon v. Burkhardt, 162 S.W. 483 (Tex. Civ.
App.–Amarillo 1913, writ ref'd)
242
    Popplewell v. City of Mission, 342 S.W. 2d 52 (Tex. Civ. App.–San Antonio 1960, writ ref'd n.r.e.)
243
    Cavanaugh v. Peterson, 47 Tex. 197 (1877); Matthews v. Houston Oil Co., 299 S.W. 450 (Tex. Civ.
App.–Beaumont 1927, no writ)

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pendens has been filed will not affect that person's ownership of the property. However, if
the plaintiff in the law suit recovers title against the named defendant, then a buyer from the
plaintiff in the suit may be a bona fide purchaser who cuts off the rights of the grantee
whose deed was not of record and who was not named as a defendant in the suit.244
                3.6.12 Subsequent Purchasers from Bona Fide Purchasers: A purchaser
from a bona fide purchaser will take good title even though he or she is not an innocent
purchaser.245 Once a mortgagee takes without notice, subsequent purchasers in that
creditor’s chain of title are protected regardless of whether the subsequent purchaser knew
of the claimant’s adverse claim.246
          3.7        Creditors
                 3.7.1 Definition: Under the recording statutes, a prior unrecorded deed or
mortgage will be invalid as to a subsequent creditor. Such creditor means a claimant whose
claim is fixed by some legal process as a lien on the land, such as by attachment, execution,
judgment, landlord or mechanic's lien, or a tax lien (such as IRS or state tax lien).247 A
mortgagee will be a "creditor" upon securing a judicial order of foreclosure and order of sale
or execution sale.248 A junior lender secured by a mortgage to secure antecedent debt is not
a lien creditor and cannot postpone a prior unrecorded deed.249 A trustee or debtor-in-
possession in a bankruptcy will be treated as a judgment creditor in order to set aside
unrecorded interests.250
                 3.7.2 Effect On Recordable Interest: A lien creditor will take free and
clear of prior recordable, but unrecorded, interests unless the creditor has notice of same.
                     Examples of such recordable interests are:
                     • an equitable right to have a deed corrected to convey a lot originally
                     intended to be included in the conveyance (but not included due to mutual
                     mistake);251
                     •    an unrecorded contract for sale;252
                     •    a prior unrecorded deed;253
                     •    a divorce decree not filed of record in the real property records;254

244
    Herbert v. Smith, 183 S.W. 2d 191 (Tex. Civ. App.–Austin 1944, writ ref'd w.o.m.)
245
    Popplewell v. City of Mission, 342 S.W. 2d 52 (Tex. Civ. App.–San Antonio 1960, writ ref'd n.r.e.);
Benn v. Security Realty v. Dev. Co., 54 S.W. 2d 146 (Tex. Civ. App.–Beaumont 1932, writ ref'd)
246
     Omohundro v. Jackson, 36 S.W. 3d 677 (Tex. App – El Paso 2001, no pet.)                                   Formatted
247
    Prewitt v. United States, 792 F.2d 1353 (5th Cir. 1986); United States v. Creamer Indus., Inc., 349 F.2d
625 (5th Cir. 1965); Underwood v. United States, 118 F.2d 760 (5th Cir. 1941); Bowen v. Lansing Wagon
Works, 91 Tex. 385, 33 S.W. 872 (1898)
248
    McDonald v. Powell Lumber Co., 243 S.W. 2d 192 (Tex. Civ. App.–Beaumont 1951, writ ref'd)
249
    Turner v. Cochran, 94 Tex. 480, 61 S.W. 923 91901)
250
    11 U.S.C.A. Section 544; Segrest v. Hale, 164 S.W. 2d 793 (Tex. Civ. App.–Galveston, 1941, writ ref'd
w.o.m.)
251
    United States v. Creamer Indus., Inc., 349 F.2d at 625; Henderson v. Odessa Bldg. & Fin. Co., 24 S.W.
2d 393 (Tex. Comm'n App. 1930); North East Indep. School Dist. v. Aldridge, 528 S.W. 2d 341 (Tex. Civ.
App.–Amarillo 1975, writ ref'd n.r.e.)
252
    Linn v. LeCompte, 47 Tex. 440 (1877)
253
    Whitaker v. Farris, 45 Tex. Civ. App. 378, 101 S.W. 456 (1907, writ ref'd)

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                     •    an unrecorded sheriff's deed;255 or
                     •    an unrecorded extension of deed of trust.256
               3.7.3 Unrecordable Equities: The lien creditor will not cut off
"unrecordable equities" such as:
                     •    resulting trusts;257
                     •    an implied vendor's lien;258
                        An oral contract to purchase land, pursuant to which partial payment had            Formatted: Bullets and Numbering
                     been made, and which is an equitable right in the land not subject to the
                     recording statute.259
                        A purchaser under an executory contract to convey real property who
                     goes into possession of the land, obtaining all rights and obligations of
                     ownership in the land, is vested with equitable title from the date of contract
                     or possession, which is superior to a judgment lien against a seller.260
                        • a completed contract for sale where no deed had been
                     executed to the purchaser as of yet;261
                          •    a deed intended as a mortgage;262
                          •    a deed of trust released by mutual mistake;263
                        • a right to reform a deed where by mutual mistake the grantor
                     conveyed a greater interest than intended;264
                         • a case where the record owner holds in trust for the benefit of
                     the cestui que trust;265
                         • a situation where title was held in the individual name for the benefit
                     of a partnership and a prior mortgage pursuant to which a lender is claiming
                     priority had been signed for the partnership by all of its partners.266
               3.7.4 Burden of Proof: The burden of proof lies on the holder of the
unrecorded instrument, such as a deed or mortgage, to show that the creditor had notice of

254
    Prewitt v. United States, 792 F.2d 1353 (5th Cir. 1986)
255
    Wiggins v. Sprague, 15 Tex. Civ. App. 590, 40 S.W. 1019 (1897, no writ)
256
    The Cadle Co. v. Butler, 951 S.W. 2d 901 (Tex. App.–Corpus Christi 1997, no writ)
257
    Blankenship v. Douglas, 26 Tex. 225 (1862); Hammett v. McIntire, 365 S.W. 2d 844 (Tex. Civ. App.–
Houston [1st Dist.] 1962, writ ref'd n.r.e.)
258
    Senter & Co. v. Lambeth, 59 Tex. 259 (1883); Davis v. Wheeler, 23 S.W. 435 (Tex. Civ. App. 1893, no
writ)
259
    Gaona v. Gonzales, 997 S.W. 2d 784 (Tex. App. – Austin 1999, no pet.)                                    Formatted
260
    Cadle Company v. Harvey, 46 S.W. 3d 282 (Tex. App. – Ft. Worth 2001, pet. denied)
261                                                                                                          Formatted
    Texas American Bank/Levelland v. Resendez, 706 S.W. 2d 343 (Tex. App.–Amarillo 1986, no writ)
262
    Michael v. Knapp, 4 Tex. Civ. App. 464, 23 S.W. 280 (1893, no writ)
263
    First State Bank v. Jones, 107 Tex. 623, 183 S.W. 874 (1916)
264
    Cetti v. Wilson, 168 S.W. 996 (Tex. Civ. App.–Fort Worth 1914, writ ref'd)
265
    Calvert v. Roche, 59 Tex. 463 (1883)
266
    Lone Star Indus., Inc. v. Lomas & Nettleton Fin. Corp., 586 S.W. 2d 192 (Tex. Civ. App.–Eastland 1979,
writ ref'd n.r.e.)

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the instrument at the time the lien attached or prior thereto.267 A creditor who has a lien by
levy of attachment must show that it is owed money.268 A creditor, such as the IRS, has
actual notice of an unrecorded interest if its agent knows of the interest before recordation of
the creditor’s lien.269
                3.7.5 Subsequent Purchasers: If the creditor does not have notice of the
outstanding unrecorded interest at the time its lien is created, then a buyer at the execution
sale (on the debt owed the creditor) will take free and clear of the outstanding unrecorded
interest (where the interest was not recorded at the time of the lien was created). The
purchaser will be protected through the rights of the creditor even though the purchaser may
have notice of the facts at the time of sale. The buyer, in essence, steps into the shoes of the
creditor.270
          3.8        Estoppel
                 3.8.1 After-Acquired Title: A deed will operate to vest the after-acquired
title of the grantor in the grantee where such deed is not a quitclaim deed and does not
purport simply to be the interest acquired by the grantor through a source named in the
deed.271 "It is not...essential that a deed should contain covenants of warranty in order for
the doctrine of estoppel to apply, for this, whenever a deed is executed under circumstances
that will estop the grantor to dispute the title of the grantee, any title or right with reference
to the property subsequently acquired by the grantor will immediately pass to the
grantee."272 Express or statutory warranties in the deed are not necessary.273 Estoppel will
apply even though the deed is a gift deed.274 If the grantor in a Deed obtains title (at the
foreclosure sale or later) through a lien to which the grantor did not except in its warranty
deed (the warranties being applicable to such lien), then the title it acquires will inure to its
prior grantee.275 Presumably the benefits of the doctrine of estoppel by deed to a grantee in
a deed are assigned, as are the covenants in such Deed, to a later grantee who receives a
quitclaim from the first grantee.276 A grantor under a warranty deed will be estopped to
claim rights pursuant to an executory limitation.277Estoppel by Deed will not apply in favor
of a grantee in a partition Deed.278 The rule of after-acquired title will also apply to
mortgages.279


267
    Barnett v. Squyres, 93 Tex. 193, 54 S.W. 241 (1899); Diltz v. Dodson, 207 S.W. 356 (Tex. Civ. App.–
Fort Worth 1918, no writ); Whitaker v. Farris, 45 Tex. Civ. App. 378, 101 S.W. 456 (1907, writ ref'd)
268
    Parks v. Worthington, 101 Tex. 505, 109 S.W. 909 (1908); Colonial Leasing Co. of New England v.
Logistics Control Group Int'l, 762 F.2d 454 (5th Cir. 1985)
269
    Prowse v. Walters, 941 S.W. 2d 223 (Tex. App.–Corpus Christi 1996, writ denied)
270
    Linn v. LeCompte, 47 Tex. 440 (1877); Grace v. Wade & Mains, 45 Tex. 522 (1876)
271
    Wilson v. Wilson, 118 S.W. 2d 404 (Tex. Civ. App.–Beaumont 1938, no writ)
272
    Wilson v. Beck, 286 S.W. 315, 320 (Tex. Civ. App.–Dallas 1926, writ ref'd)
273
    Lindsay v. Freeman, 83 Tex. 259, 18 S.W. 727 (1892); Blanton v. Bruce, 688 S.W. 2d 908 (Tex. App.–
Eastland 1985, writ ref'd n.r.e.); Texas Pacific Coal & Oil Co. v. Fox, 228 S.W. 1021 (Tex. Civ. App.–Fort
Worth 1921, no writ)
274
    Robinson v. Douthit, 64 Tex. 101 (1885)
275
    Burns v. Goodrich, 392 S.W. 2d 689 (Tex. 1965); Robinson v. Douthit, 64 Tex. 101 (1885)
276
    Flanniken v. Neal, 67 Tex. 629, 4 S.W. 212 (1887)
277
    Gutierrez v. Gutierrez, 30 S.W. 3d 558 (Tex. App. – Texarkana 2000, no pet.)                             Formatted
278
    Zapatero v. Canales, 730 S.W. 2d 111 (Tex. App.–San Antonio 1987, writ ref'd n.r.e.)
279
    Shield v. Donald, 253 S.W. 2d 710 (Tex. Civ. App.–Fort Worth 1952, writ ref'd n.r.e.)

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                 3.8.2 Estoppel at to Reservations: If a party conveys and gives any
assurances of title and reserves a mineral interest in favor of itself but does not except to
prior outstanding interests, then it is estopped to claim any additional interest to the extent
that the prior interests remain outstanding.280 This rule of estoppel set forth in the Duhig
case will not apply, however, if the Deed refers to a prior Deed (which create the separate
reservations) by language such as "reference to which is made for all purposes" or "for all
legal purposes."281
                 3.8.3 Binding Effect of Recitals on Grantee: A grantee in a Deed will be
bound by the terms and provisions of the deed, including reservations of mineral where the
grantor's interest, if any, in the land is disputed. The grantee and its successors may not
thereafter acquire superior title free of the reservation even by subsequent conveyance from
a third party who acquired title by limitations.282 However, before the grantor can secure a
mineral interest by estoppel by reservation, the grantee must have all of the interest that the
grantor purported to convey to the grantee.283
                3.8.4 Recitals in a Partition Deed: False recitals in a partition deed will
estop the grantor to dispute the title acquired in reliance on the truth of the recitals.284
                3.8.5 Trustee's Deed Recitals: If a deed of trust provides that recitals in the
trustee's deed concerning the sale shall be prima facie evidence of the truth thereof, and the
trustee's deed does have such recitals, then subsequent purchasers after the trustee deeds
execution are protected under the doctrine of innocent purchaser, and the borrower is
estopped form denying that title passed due to the improper sale.285
               3.8.6 Negligent Delivery: Even though a deed is not properly delivered
because of lack of consent of the grantor and, as a result, has no effect to pass title, those
claiming as innocent purchasers may be able to secure title by establishing that the grantor
was guilty of negligence in causing the unauthorized delivery and, therefore, should be
estopped to deny the transfer.286
                 3.8.7 Misrepresentation of Title: If a party who has title to the property
represents to a third party that another person executing a deed actually has good title to the
property, then that third party relying upon the misrepresentation will be able to establish
title because of estoppel as to the recorded owner.287
                3.8.8 Conveyance in Representative Capacity: A conveyance in a
representative capacity only by a party who does not expressly convey his or her individual

280
    Duhig v. Peavey-Moore Lumber Co, Inc., 135 Tex. 503, 144 S.W. 2d 878 (1940)
281
    Harris v. Windsor, 156 Tex. 324, 294 S.W. 2d 798 (1956)
282
    Adams v. Duncan, 147 Tex. 332, 215 S.W. 2d 599 (Tex. 1948); Greene v. White, 137 Tex. 361, 153
S.W. 2d 575 (1941)
283
    Dean v. Hidalgo County Water Improvement Diost. Number Two, 320 S.W. 2d 29 (Tex. Civ. App.–San
Antonio 1959, writ ref'd n.r.e.)
284
    Wilson v. Beck, 286 S.W. 315 (Tex. Civ. App.–Dallas 1926, writ ref'd)
285
    Randolph v. Citizens Nat'l Bank, 141 S.W. 2d 1030 (Tex. Civ. App.–Amarillo 1940, writ dism'd judgm't
cor.)
286
    Houston Land & Trust Co. v. Hubbard, 37 Tex. Civ. App. 546, 85 S.W. 474 (1905, no writ)
287
    Nichols-Stewart v. Crosby, 87 Tex. 443, 29 S.W. 380 (1895); Henry v. Thomas, 74 S.W. 599 (Tex. Civ.
App. 1903, writ ref'd); New York & T. Land v. Hyland, 8 Tex. Civ. App. 601, 28 S.W. 206 (1894, writ
ref'd)

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interest will, nevertheless, convey whatever interest that person owns individually where
that party's deed purports to convey the property (as opposed to a quitclaim deed).
Conveyances where such estoppel has been recognized include those by an estate
representative,288 agents on behalf of principals,289 trustee,290 and corporations by officers
(such issue was discussed although estoppel was not applicable in the case at hand).291
                 3.8.9 Conveyance as a Release of Lien: A deed from the fee owner results
in a release of its separate lien; the deed grants all of the grantor's interest in the land.292
                3.8.10 Estoppel by Mortgagor: A party who executes notes and mortgages
on land (or assumes such liens) cannot take title under a foreclosure of a prior lien without
discharging the notes secured by inferior mortgages; the mortgagees' liens will be reinstated
on the land.293


4.0       LIMITATIONS AND RECORDING PRIORITY
          4.1        Title Limitations
              4.1.1 Marketable Record Title Acts and Marketable Title: A Model
Marketable Record Title Act, based on the Michigan Marketable Record Title Act, was
prepared by Lewis M. Simes of The University of Michigan.
               Marketable Record Title Acts (with the required chain of title noted) have
been adopted in numerous states, including:
                               Connecticut - §47-33b, et seq. (40 years);
                               Florida - §712.01 et seq. (30 years);
                               Illinois - 735 ILCS 5/13-118 (40 years);
                               Indiana - §32-1-5-1, et seq. (50 years);
                               Iowa - §614.29, et seq. (40 years);
                               Kansas - §58-3401, et seq. (25 years);
                               Michigan - §565.101, et seq. (40 years);
                               Minnesota - §541.023 (40 years);
                               Nebraska - §76-288, et seq. (22 years);
                               North Carolina - §47B-1, et seq. (30 years);
                               North Dakota - §47-19.1-01, et seq. (20 years);
                               Ohio - §5301.47, et seq. (40 years);
                               Oklahoma - Title 16 §71, et seq. (30 years);
                               Rhode Island - §34-13.1-1, et seq. (40 years)
                               South Dakota - §43-30-1, et seq. (22 years);
                               Utah - §57-9-1, et seq. (40 years);

288
    Tomlinson v. H.P. Drought & Co., 127 S.W. 262 (Tex. Civ. App. 1910, writ ref'd)
289
    Ford v. Warner, 176 S.W. 885 (Tex. Civ. App.–Amarillo 1915, no writ)
290
    Grange v. Kayser, 80 S.W. 2d 1007 (Tex. Civ. App.–El Paso 1935, no writ)
291
    Carothers v. Alexander, 74 Tex. 309, 12 S.W. 4 (1889); see also American Savings & Loan Assoc of
Houston v. Musick, 517 S.W. 2d 627 (Tex. Civ. App.–Houston [14th Dist.] 1974), rev’d on other grounds
531 S.W. 2d 581 (Tex. 1975)
292
    Fannin Inv. & Dev. Co. v. Neuhaus, 427 S.W. 2d 82 (Tex. Civ. App.–Houston [14th Dist.] 1968, no writ)
293
    Milford v. Culpepper, 40 S.W. 2d 163 (Tex. Civ. App.–Dallas 1931, writ ref'd)

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                               Vermont - Title 27 §601, et seq. (40 years);
                               Wisconsin - §893.33 (30 years); and
                               Wyoming - §34-10-101, et seq. (40 years).
               The purposes of the Acts have been well stated in some cases construing
various provisions of the Acts.
                                     "The Marketable Title Act is a comprehensive plan for
reform in conveyancing procedures and encompasses within its provisions the collective
sanctions of (a) a curative act, (b) a recording act, and (c) a statute of limitations. It is a
curative act in that it may operate to correct certain defects which have arisen in the
execution of instruments in the chain of title. It is a recording act in that it requires notice
to be given to the public of the existence of conditions and restrictions, which may be
vested or contingent, growing out of ancient records which fetter the marketability of
title...It is as well a statute of limitations in that the filing of a notice is a prerequisite to
preserve a right of action to enforce any right, claim, or interest in real estate founded upon
any instrument, event, or transaction which as executed or occurred more than 40 years
prior to the commencement of the action, whether such claim or interest is mature or
immature and whether it is vested or contingent.
                 "Curative statutes are a form of retrospective legislation which reach back
on past events to correct errors or irregularities and to render valid and effective attempted
acts which would be otherwise ineffective for the purpose the parties intended, particularly
irregularities in conveyancing requirements. They operate to complete a transaction which
the parties intended to accomplish but carried out imperfectly...
                 "Statutes of limitations are based on the theory that it is reasonable to
require that stale demands be asserted within a reasonable time after a cause of action has
accrued."294
                 "The marketable title concept is simple, although it has fathered many
variations in draftsmanship. This idea is to extinguish all claim of a given age (30 years in
the Florida Statute) which conflict with a record chain of title which is at least that old. The
Act performs this task by combining several features, which generally, are singly labeled as
'statutes of limitations,' 'curative acts,' and 'recording acts.'
                "The new Act is in fact all of these: It declares a marketable title on a
recorded chain of title which is more than 30 years old, and it nullifies all interests which
are older than the root of title. This nullification is subject to a group of exceptions -
including interests which have been filed for record in a prescribed manner....
                  "The chief purpose of the Act is to extinguish stale claims and ancient
defects against the title to real property...The Act is different from a statute of limitations.
In a statute of limitations, a claim of vested, present interest is cut off because of the
claimant's failure to sue. If suit is not filed, the claim is lost. By the Marketable Record
Title Act, any claim or interest, vested or contingent, present or future, is cut off unless the
claimant preserves his claim by filing a notice within a 30-year period...If a notice is not
filed, the claim is lost. The act also goes beyond a curative act. Curative legislation only
corrects certain minor or technical defects through the passage of time, whereas under the
294
      Wichelman v. Messner, 250 Minn. 88, 83 N.W. 2d 800, at 816 (1957)

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Marketable Record Title Act, most defects or clouds on title beyond the period of 30 years
are removed and the purchaser is made secure in his transaction."295


                 Texas, of course, has no Marketable Record Title Act, but marketability is
still relevant. In the absence of provisions to the contrary, the law implies that the seller will
furnish marketable title.296
                 There is no statutory definition of marketable title in Texas. The case of
Blomstrom v. Wells, 239 S.W. 227, at 230 (Tex. Civ. App. -- San Antonio 1922, writ
dism.), stated the dilemma of marketable title well: "The ordinary mind does not understand
the meaning of the term 'marketable title.'"
                  There are few reported cases on marketable title in Texas, but the definition
is typically a title about which there can be no fair and reasonable doubt.297
                     Marketable title has also been defined as meaning:
                        "One reasonably free from such doubt as would affect the market
value of the estate; one which a prudent man with knowledge of all the facts and their legal
bearing would be willing to accept...not doubts based on captious, frivolous or astute
niceties, made up for the occasion, but grave and reasonable doubts, such as would induce a
prudent man to hesitate in accepting a title...."298
                 These definitions provide little illumination, resulting in resort to case law
analyses of fact situations. There is, however, a paucity of case law on marketability of title,
particularly in the last 40 years.
                     However, one can deduce that the following matters cause title to be
unmarketable:
                         Adverse possession title (where no suit has been brought).299                 Formatted: Bullets and Numbering

                         Title resting on presumptions of fact (such as a deed executed by the
                          president of a corporation without reference to consent by the board of
                          directors).300
                         Ex parte affidavits of use (do not provide record evidence of marketable
                          [or merchantable] title).301



295
    Marshall v. Hollywood, 236 So. 2d 114 at 119 (Fla. 1970)
296
    Lambert v. Taylor Telephone Co-operative, 276 S.W. 2d 929 (Tex. Civ. App.–Eastland 1955,
no writ); Medallion Homes, Inc. v. Thermar Investments, 698 S.W. 2d 400 (Tex. App.–Houston
[14th Dist.] 1985, no writ)
297
    Corbett v. McGregor, 84 S.W. 278 (Tex. Civ. App. 1904, no writ)
257; Texas Auto Co. v. Arbetter, 1 S.W. 2d 334, at 336 (Tex. Civ. App.–San Antonio 1927, writ dism.)
299
    Adkins v. Gillespie, 189 S.W. 275 (Tex. Civ. App. 1916, no writ); Alexander v. Glasscock, 271
S.W. 2d 333 (Tex. Civ. App.–Texarkana 1954, no writ); Blomstrom v. Wells, 239 S.W. 227 (Tex.
Civ. App.–San Antonio 1922, writ dism.)
300
    Austin v. Carter, 296 S.W. 2d 649 (Tex. Civ. App.–Eastland 1927, no writ)
301
    Cline v. Booty, 175 S.W. 1081 (Tex. Civ. App.–San Antonio 1915, writ ref'd); Owens v.
Jackson, 35 S.W. 2d 186 (Tex. Civ. App.–Austin 1931, writ dism.)

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                         An heirship affidavit or recitations of heirship (are not sufficient for title
                          to be marketable[unless ancient]).302
                         Gaps in county records destroyed by fire.303
                         Boundary changes due to accretion or avulsion.304
                         Access to the land dependent on prescriptive easement (may be
                          unmarketable).305
                         Limitations on access (may render title unmarketable).306
              Consequently, many Texas titles are not marketable. Among the problems
causing unmarketability in Texas are:


                                   Gaps in County Records. The following (among other)
                                    courthouse records were destroyed:
                                              Blanco (burnt 8-14-1876)
                                              Lee (burnt 2-11-1898)
                                              Bowie (burnt 1-21-1889)
                                              Liberty (burnt 12-11-1874)
                                              Brazos (Book A missing)
                                              Limestone (burnt 10-24-1873)
                                              Brown (burnt 3-29-1880)
                                              Llano (burnt 12-13-1874 and 10-17-1880)
                                              Cameron (Books C & D burnt in 1854)
                                              Madison (burnt 6-5-1865 and 1-20-1873)
                                              Chambers (burnt 12-2-1875)
                                              Mason (Books C & E burnt)
                                              Clay (burnt 2-25-1873)
                                              Milam (burnt 4-9-1874)

                                              Denton (burnt 12-23-1875
                                              Montague (burnt 2-25-1873)

Edwards (Book A burnt)
                                              Parker (burnt 5-13-1874)
                                              Erath (burnt 8-6-1866)
                                              Rains (burnt 11-20-1879)
                                              Falls (Book K burnt)
                                              Red River (Book U and part of Book A
                                              Frio (Book B stolen missing)
                                              Gillespie (Book A burnt)

302
    Foster v. Eoff, 19 Tex. Civ. App. 405, 47 S.W. 399 (1898, writ ref'd)
303
    Temple Lumber Co. v. Brook, 165 S.W. 507 (Tex. Civ. App. 1914. writ ref'd)
304
    Gaines v. Dillard, 545 S.W. 2d 845 (Tex. Civ. App.–Ft. Worth 1976, writ ref'd, n.r.e.)
305
    Nance v. McClellan, 54 S.W. 2d 1109 (Tex. Civ. App. 1932), aff'd, 126 Tex 500, 89 S.W. 2d 774 (1936)
306
    Dusenbery v. Jones, 359 F.Supp. 712 (D.Kan. 1972)

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                                               Rockwall (burnt 3-16-1875)
                                               Goliad (burnt 6-6-1870)
                                               Rusk (part burnt 3-25-1876)
                                               Grimes (burnt 1848)
                                               Sabine (burnt 11-22-1875)
                                               Hamilton (Book A burnt)
                                               Shelby (burnt 6-1-1882)
                                               Hood (burnt 3-5-1875)
                                               Tarrant (burnt 3-22-1876)
                                               Houston (burnt 2-2-1865)
                                               Titus (burnt 9-20-1888)
                                               Jack (Book P missing)
                                               Trinity (burnt 12-1878)
                                               Jasper (burnt 10-28-1849)
                                               Van Zandt (Book A missing)
                                               Karnes (burnt 7-18-1865)
                                               Wood (burnt 12-11-1878)
                                               Kimble (burnt 4-22-1884)
                                               Zapata (burnt 1863)307
                                               Lamar (burnt 3-31-1916)
                                               Lampasas (burnt 12-25-1871)
                                   Other Ancient Gaps in the Chain of Title.
                                   Lack of Recorded Access to the Land. Although legal access
                                    generally exists in Texas, it frequently is not based on a recorded
                                    easement or recorded dedication, particularly in rural areas.
                                   Deeds From Corporations, Trustees of Disclosed Trusts and
                                    Partnerships, where the resolution or other evidence of authority
                                    is not recorded.
                                   Heirship Affidavits (which are less expensive than
                                    determinations of heirship).
                  4.1.2 Good Title: A good title is title free of litigation, palpable defects,
and grave doubts. It is both legal and equitable title fairly deducible of record.308 The Texas
title insurance policies insure against loss or damage because of lack of "good and
indefeasible" title. The ALTA policies insure against "unmarketability" of title. The
distinction between "good" title and "marketable" title theoretically exists: a marketable title
is on that is free from reasonable (as opposed to grave) doubt.309 In most cases of title issues
a distinction does not exist, unless one contrasts title good in fact with marketable title.310
Even where a distinction may be argued to exist, most matters at issue will constitute
"defects" in title, which the Texas policies also insure against. In consideration by the
former Texas Board of Insurance of possible marketable title coverage, criticism of

307
    Lange and Leopold, Texas Practice, Vol. 3, §262
308
    Collins v. Martin, 6 S.W. 2d 126 (Tex. Civ. App.–Ft. Worth 1928, no writ)
309
    Connely v. Putnam, 111 S.W. 164 (Tex. Civ. App.–1908, no writ)
310
    Hollifield v. Landrum, 71 S.W. 164 (Tex. Civ. App.–1903, no writ)

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marketable title coverage centered primarily on destroyed court house records and
presumptions (without record evidence such as corporate resolutions) of authority to
convey, which it was explained did not affect actual ownership (or any insurance of
ownership, since the policy does insure against adverse ownership) or prevent acquisition of
good title, but which might cause unmarketability of the title.
                     Current Texas law prohibits insurance against unmarketability of the title.311
               The Texas Real Estate Commission (TREC) contracts require the Seller to
furnish a General Warranty Deed conveying good and indefeasible title.
                     4.1.3     Adverse Possession Statutes:
                               4.1.3.1     3 years. A person must bring suit to recover property
                               held in peaceable and adverse possession under title or color of title
                               no later than three years after the cause of action accrues.312
                                4.1.3.2    5 years. A person must bring suit no later than five years
                               after the cause of action accrues to recover property held in
                               peaceable and adverse possession by one who pays applicable taxes,
                               and cultivates, uses, or enjoys the property, and claims that property
                               under duly registered deed.313
                               4.1.3.3     10 years. A person must bring suit no later than ten years
                               after the cause of action accrues to recover property held in
                               peaceable and adverse possession by another who cultivates, uses, or
                               enjoys the property.314
                               4.1.3.4      25 years-Legal Disability. A person, regardless of legal
                               disability, must bring suit no later than 25 years after the cause of
                               action accrues to recover property held in peaceable and adverse
                               possession by one who cultivates, uses, or enjoys the property.315
                               4.1.3.5     25 years-Possession Under Deed. A person, regardless of
                               legal disability, may not maintain an action to recover property held
                               for 25 years in peaceable and adverse possession by another who
                               holds the property in good faith and under a deed or other instrument
                               purporting to convey the property that is recorded in the deed
                               records.316
                               4.1.3.6     25 years-Prima Facie Evidence. It is prima facie
                               evidence that title passed from the apparent record title holder if for
                               one or more years during the 25 years preceding suit the person
                               holding apparent record title did not exercise dominion or pay taxes,
                               and the opposing party has openly exercised dominion over and

311
    Tex. Ins. Code art. 9.09A
312
    Tex. Civ. Prac. & Rem. Code Section 16.024
313
    Tex. Civ. Prac. & Rem. Code Section 16.025
314
    Tex. Civ. Prac. & Rem. Code Section 16.026
315
    Tex. Civ. Prac. & Rem. Code Section 16.027
316
    Tex. Civ. Prac. & Rem. Code Section 16.028

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                               asserted a claim to the land and has paid taxes annually before
                               delinquent for 25 years317
                               4.1.3.7     Title Insurance. Because the title insurance policy
                               insures "good and indefeasible" title, title companies will sometime
                               rely upon affidavits of use and occupancy, without judicial
                               determination, to resolve an outstanding gap in the chain of title.
                               Under Procedural Rule P-39 (b) the title company may offer express
                               insurance (in its discretion) if the title company relies upon such
                               affidavit. That language following the exception is:
                     "Company insures the insured against loss, if any, sustained by the insured
       under the terms of this Policy by reason of a final, non-appealable judgment of a court of
       competent jurisdiction that divests the insured of its interest as insured because of this
       right, claim, or interest. Company agrees to provide defense to the insured in accordance
       with the terms of this Policy if suit is brought against the insured to divest the insured of
       its interest as insured because of this right, claim, or interest."
                     OR
                    "Company insures the insured against loss, if any, sustained by the insured
       under the terms of this Policy by reason of the enforcement of said rights as to the land.
       Company agrees to provide defense to the insured in accordance with the terms of this
       Policy if suit is brought against the insured to enforce said rights as to the land."




317
      Tex. Civ. Prac. & Rem. Code Section 16.029

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