CHAPTER 2 SCOPE, CONTENT AND FORM OF TITLE OPINIONS
| Jurisdiction | United States |
(Nov 1977)
SCOPE, CONTENT AND FORM OF TITLE OPINIONS
Hinkle, Cox, Eaton, Cotfield & Hensley
Roswell, New Mexico
TABLE OF CONTENTS
I. INTRODUCTION
II. PRELIMINARY MATTERS
1. Opinion Numbers
2. Log Book
3. Title Opinion Index
III. OPINION REQUEST
IV. ABSTRACT ORDER
V. ABSTRACT EXAMINATION
1. Worksheet
2. Ownership Chart—Chain of Title
3. Review Sheet—Outline of Opinion
VI. TITLE OPINION
1. Form
2. Scope and Content
A. Lease Purchase
B. Supplemental Opinion
C. Drilling
D. Division Order
VII. CONCLUSION
APPENDICES
1. Title Opinion Index
2. Worksheets
3. Ownership Chart
4. Review Sheet
5. Lease Purchase Opinion
6. Supplemental Opinion
7. Drilling Opinion
8. Division Order Ownership Schedule
9. Communitized Ownership Schedule
———————
I. INTRODUCTION.
The latitude of the subject of this paper is such that a few short rules of thumb could be enunciated as applicable to all of the various types of oil and gas title opinions with a few specific variations depending upon whether the opinion is for lease acquisition, drilling or division order purposes. On the other hand, if all the ramifications were fully discussed, this paper would take more time than is allotted and would, conceivably, constitute a volume within itself. In an effort to reach a happy medium between the two extremes and, with appropriate apologies to the experienced title examiner, I will attempt to present elementary procedures which hopefully can be used as a guideline for the preparation and rendering of a useful and understandable title opinion.
I am indebted to Ramon Colvert, Bob Pruitt and Bob Poulson, who so kindly furnished representative copies of their forms of title opinion for my use in preparation of this paper. My work would have been much easier in the past 25 years if all of the opinions I have seen during that period of time were as thorough and well done as those opinions. Unfortunately, such is not the case and far too many of the opinions which I have been called upon to utilize in performing services for my clients have left unanswered as many questions as were answered by the opinion. That unpleasant experience is one reason I accepted the invitation to present this paper this morning.
Many lawyers view abstract examination and preparation of title opinions as an onerous, tedious chore which should be avoided if at all possible. Admittedly, such a practice lacks the glamour of the courtroom and is not as exotic as many other areas in the practice of law. I concur with the observations of Mr. Patton in his preface to his work on titles where he says:
An attorney whose practice is largely concerned with titles must have a more thorough knowledge of the details of the pertinent statutes of the state in which the land involved is located and with the decisions in reference thereto than is necessary for successful practice in almost any other branch of the law. Moreover, he must be familiar with and have facilities for making quick reference to the state's title law, not
[Page 2-2]
only as it now is but also as it has existed during the entire period embraced in his examination. Only a part of it is of enough common interest to find a place in the numerous textbooks on real property or in the few on abstracts.1
I might add to that comment, that the title examiner also has the challenging responsibility to examine the facts revealed by the abstract and, at least in my state, to make judgmental decisions as to what the title law will be and what the court will do in applying the law to those facts when, at the time the attorney is making the decision, there is no case law in the state upon which to rely. In many cases, the expenditure of large sums of money hinge on the decision made by the examining attorney. Competent title examination requires an attorney to develop a broad legal expertise, not only in real property and conveyancing, but also in trusts, wills, judgments, mortgages, liens, probate, jurisdictional questions, and varied other problems that arise in the course of an examination. Unfortunately, the instrument that goes on record does not red flag the fact that it is ambiguous, contrary to law, or contains some other defect that needs to be pointed out in the title opinion. Consequently, when I hear derogatory remarks about title examiners, I simply grin and bear it, recognizing that the author of the derogatory remarks either has never done any significant amount of title work or is not competent to conduct an appropriate examination and write a title opinion.
II. PRELIMINARY MATTERS.
I have a few preliminary suggestions concerning in-office procedures where a volume of title work is done.
1. Opinion Numbers.
A numbering system for title opinions similar to the system utilized by court clerks in numbering cases filed provides a simple method for processing, indexing and retrieving title opinions rendered by the attorneys in the office. We arbitrarily assign numbers to opinion requests in chronological order as the requests are received and the utilization of this numbering system will be mentioned from time to time in this paper. It is an efficient management tool which merits consideration.
2. Log Book.
A log book or some other method of record keeping should be established to maintain a record of all abstracts received in the office. As a minimum, the abstracts should be
[Page 2-3]
identified by land, abstract number, and the client to whom the abstracts belong or are to be returned. I recommend that the date of receipt also be noted either on the abstracts themselves or on the log book, or both. The date can be important if the contract involved requires furnishing of a title opinion within a certain number of days after receipt of the abstracts by the examining attorney. It also is useful in managing the work load and preventing abstracts from getting lost in the office.
Either the reception record or a separate record should be kept indicating the lawyer to whom the abstract has been assigned within the office. We have found it helpful to use this system as a way to adequately distribute the workload, assign title opinion numbers to the opinions and to note a due date for the opinion, irrespective of whether the client has requested a due date, in order to achieve the type of service to which the client is entitled. If this system is utilized, it is worthwhile to make a notation on the record-keeping system indicating the date on which the opinion is delivered and the abstracts returned to the client.
3. Title Opinion Index
One of the most valuable assets in any law practice and one that seems to give lawyers the most problem is a retrieval system facilitating the utilization of work previously done in the office. In the title examination area, a simple system for retrieval involves the numbering of title opinions and a tract book-type index of title opinions written, so that at any given time quick reference will indicate whether or not the firm has written a title opinion on any particular tract of land. I have attached as Appendix 1 a copy of an excerpt from the tract book system used in our office to indicate whether such opinions exist. The township and range have been omitted from the appendix, but you will note that the left-hand column is the section number and the next column is a series of opinion numbers. The columns on the right-hand side of the page indicate the subdivision (same as government survey) in the section which are covered by the opinion. The title opinion number covering that subdivision is then inserted under the opinion number column so that, for instance, if we were looking for an opinion on E 1/2 SW 1/4 of Section 19, we see that the fourth opinion listed under Section 19 is title opinion 16,739, and this opinion covers that particular land. You will note that the opinion also covers Lots 3 and 4 and NW 1/4 SE 1/4 of said Section 19. This indexing system is set up on a regular legal size file jacket for 36 sections with blanks left on the index tab to insert the township and range. The system has proved helpful to us, as well as a time saver and money saver to our clients. We maintain records under our client index as to title opinions written, but we have found the tract index system to be a beneficial and efficient retrieval tool in our practice.
[Page 2-4]
I realize that these matters are not necessarily within the scope of the topic assigned to me, but they are ancillary to the overall subject matter and may benefit those of you who are relatively new to the practice.
III. OPINION REQUEST
The initial opinion request may be received in writing specifying in detail the purpose for which the client needs the opinion, the lands which are to be examined, and the depth limitations, if any, which concern the client. It may be accompanied by any instruments not of record which are of concern to the client, and abstract coverage to a current date on the pertinent lands. Rental receipts, affidavits or other curative material may be submitted.
Conversely, the opinion request may be submitted by a telephone call from a client who says, "Hey, Lew, I need an opinion on the NW 1/4 of 35 Township 17 South, Range 49 East, and we've got a rig that we want to move in next Monday."
If the request is as complete as that set forth in the first instance, the in-office procedure for logging in the request and assigning the work can be immediately implemented. However, if the request comes in the form of the telephone call or by personal contact, or by letter request which contains something less than the information set forth in the first instance, inquiry will have to be made as to the exact need and desire of the client. I have had situations arise where abstracts were mailed covering several different tracts of land...
To continue reading
Request your trial