CHAPTER 16 WHY TEXAS TITLES ARE DIFFERENT

• Jurisdiction: United States

Mineral Title Examination
(Sep 2007)
CHAPTER 16
WHY TEXAS TITLES ARE DIFFERENT
Terry I. Cross
Attorney
Haynes and Boone LLP
Dallas, Texas

Mr. Cross is board certified in Oil, Gas and Mineral Law by the Board of Specialization of the State Bar of Texas, and specializes in oil and gas law and energy finance.

Mr. Cross has completed transactions including:

█ Represented buyers and sellers in acquisitions and dispositions of producing oil and gas properties, pipelines, processing and refining facilities.

█ Represented operators and non-operators in structuring and documenting domestic and international joint exploration and production operations.

█ Represented lenders and institutional investors, as well as producers, in energy finance transactions.

Recent Publications

Purposeful Accommodation--Planning for Co-Existent Surface and Mineral Development. Texas Oil and Gas Law Journal, Vol. 20, No. 6 (December, 2006); The Ties That Bind -- Preemptive Rights and Restraints on Alienation That Commonly Burden Oil and Gas Properties, Texas Wesleyan Law Review, Vol. 5, No. 2 (Spring, 1999); Oil and Gas Liens & Foreclosures--A Multi-state Perspective, Oklahoma Law Review, Vol. 51, No. 2 (Summer, 1998); Oil and Gas Products Lien Acts-Statutory Purchase Money Security Interests for Producers and Royalty Owners, the Quarterly Report of the Consumer Finance Law (Fall, 1996); Joinder Issues in Voluntary Pooling--Who Signs? Who is Bound?, State Bar Oil, Gas and Mineral Law Section Report (1996)

Education

J.D., magna cum laude, University of Houston Law Center, 1977

B.A., University of Houston, Honors Program, 1974

Memberships

State Bar of Texas; Dallas Bar Association

TABLE OF CONTENTS

I. Introduction

II. Six Flags -- Grants From Sovereigns

A. Spain

B. Mexico

C. Republic of Texas/State of Texas

III. Texas Recording Act

A. Overview

B. Who is Protected

C. How Much Protection

D. Notice

IV. Miscellaneous

A. Community Property - Texas Style

B. Grants of "Other Minerals"

C. Mineral Deeds

D. Rule in Shelley's Case and Doctrine of Worthier Title

E. Rule Against Perpetuities

F. Limitation Titles

G. Trespass to Try Title

H. "Forced Pooling."

I. Producer's Lien -- Texas Business and Commerce Code § 9.343

I. Introduction

The title of this paper begs the question: "Different from What?" The most obvious answer is "different from other jurisdictions," and that is the primary screen criterion for the various issues referenced below. Some aspects of Texas titles are necessarily unique because of the unique history of Texas. However, there are some aspects of Texas title law that, even if not unique, are "different" than what you might have expected. And in a few instances, abrupt changes in the law leave us with results that are different than they used to be.

II. Six Flags -- Grants From Sovereigns

Texas has existed as a political unit under four different sovereigns that made grants of lands within the present borders of the State of Texas: Spain, Mexico, Republic of Texas and the State of Texas. While France disputed Spain's ownership claims, it made no grants. From 1691 to 1822, Texas was a Spanish province. From 1823 to 1835, Texas and Coahuila were a Mexican state. From 1836 to 1845, Texas was a republic. Since 1845, Texas has been a state of the United States. Texas' secession from the Union in 1861 resulted in a sixth flag but did not affect prior land grants or the ownership by Texas of unappropriated land. However, Confederate veterans were given scrip for land grants from the State of Texas in recognition of their service to the Confederate States of America.¹

While each of the successive sovereigns had its own procedures for making grants, each new regime respected the valid grants of prior sovereigns. The grants from Spain and Mexico were, of course, in Spanish and contain Spanish measures for distance and area. The land descriptions used in the original grants and early deeds were perpetuated long after English became the official language for legal documents, so that one encounters terms like varas, labors and leagues in deeds of fairly recent vintage.

Some of the Spanish measures encountered are:

1 Vara = 33'/3 inches = 25/27 yards

1 Caballeria = 780,833 sq. varas = 108 acres

1 labor = 1,000 sq. varas = 177.136 acres

1 league = 5,000 sq. varas = 4,428.403 acres

Because the early grants from these four sovereigns covered large tracts without benefit of actual surveys and because the original grantees either never occupied the land or were slow to do so, there were numerous disputes regarding the location of land. Even later, when land grants were supported by surveys, the surveys were often done from hilltops or horseback as

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opposed to reflecting actual on the ground measurement of distances. Because of poor surveys, inadequate land descriptions and unrecorded conveyances, limitation titles are a critical component of most Texas titles. Since one cannot perfect a limitation title against the state, a grant from one of these sovereigns is the inception of every Texas land title, and verifying a valid grant from a sovereign is the start of every title examination. Therefore, title lawyers must understand the procedures for valid land grants from four sovereigns and confirm a valid grant for each tract of land.²

Spain.A.

The first grant of Texas lands was made by Spain in 1731. Under Spanish law, there were three steps involved in acquiring land:

1. A petition was addressed to the Spanish officer in the province who had been delegated authority by the Spanish king to entertain such petition;

2. This officer endorsed the petition and directed it to a solicitor or magistrate ordering him to inquire into the circumstances of the petitioner and the truth of the statements contained in the petition, and to make a survey of the land; and

3. The actual grant of the land was made by a superior officer of the province.

Mexico.B.

Under Mexican rule, land in Texas could be acquired by (a) purchase directly from Mexico, (b) special grant or gift, and (c) through an impresario who was granted large tracts of land by Mexico under contract to introduce a specified number of families into Texas as colonists. The national colonization law of Mexico of 1824 made provisions for the granting of lands to impresarios, heads of families and individuals. In order to obtain grants under this law, colonists were required to pursue three steps:

1. Petition to the governor of the territory in which the land lay;

2. The governor then caused the petition to be investigated; and

3. The governor then issued a document granting the land and ordering the applicant to be placed in possession.

The colonization law of Coahuila and Texas of 1825 made provisions for the granting of land directly to colonists, including colonists introduced by impresarios and directly to individuals by the government of Mexico upon purchase.

For an individual to obtain free grants of land under the colonization laws of the state of Coahuila and the Texas of 1825:

1. A petition was addressed to the government and referred to the impresario for his certificate;

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2. The petition was then referred to a commissioner for a survey; and

3. The commissioner issued the grant based upon the field notes of his survey.

Spain and Mexico in the aggregate granted 26,280,000 acres of land in Texas.³

C. Republic of Texas/State of Texas.

1. Overview. The Republic of Texas recognized the grants made by Spain as having the same legal status and characteristics as a grant made by the Republic. While grants made by Mexico were also recognized as valid, their validity depended on where the land was located. Grants relating to land located within what had been the Mexican States of Coahuila and Texas were valid only if made prior to March 2, 1836, the day Texas declared its independence. Grants relating to land between the Nueces River and Rio Grande (which had been part of the State of Tamaulipas) were valid only if made prior to December 19, 1836, the date the Republic extended its boundary to the Rio Grande. This was true even though this land did not in fact become a part of Texas until 1848, when, by the Treaty of Guadalupe - Hidalgo between Mexico and the United States, the land was officially ceded to the United States. However, if all the required steps to acquiring a grant had been completed prior to March 2, 1836 or December 19, 1836 (depending upon the location of the land), except the ministerial act of signing and delivering the grant, Texas will now recognize the original grantee's equitable right to the land, if the rights of innocent third parties have not intervened. In determining the validity of a grant made by Spain or Mexico, Texas will apply the law of Spain or Mexico, as applicable, as it existed at the time the grant was made.

Under both Spanish and Mexican law, a land grant did not convey minerals, and the minerals belonged to the crown as res nullius (things not subject to private ownership).⁴ So, when the Republic of Texas adopted its Constitution of 1836, it succeeded to ownership of all minerals under previously granted land by adopting the mineral laws in place as of the grants:

All laws now in force in Texas and not inconsistent with this Constitution shall remain in full force until declared void, repealed, altered, or expired by their own limitations.⁵

In 1840, Texas adopted the common law of England, but in doing so, excepted "such laws as relate to the reservation of islands and lands, and also of salt lakes, licks and salt springs, mines and minerals of every description . . . ." In rejecting this aspect of English common law and retaining Spanish law, Texas retained ownership of all minerals under the land granted by Spain and Mexico, and of course, the minerals under all unappropriated land.

Subsequently, as discussed below, Texas would relinquish mineral...