In 2009 the Texas Supreme Court handed down Myrad Props., Inc. v. LaSalle Bank Nat’l Ass’n, 300 S.W.3d 746 (Tex. 2009), which held that correction deeds should not be used to convey any additional or separate property that was not described in the original deed. The Legislature followed in 2011 with § 5.029, Property Code, which allowed parties to enter into correction deeds to make material and nonmaterial changes in the original deed, including conveyance of new and separate properties. The statute permits the parties to the original transaction to make a material correction, as well as the parties’ heirs, successors, or assigns. This authority includes a buyer’s disclaimer of an interest in real property that is the subject of the original deed, which is relevant to the case we are about to describe. Section 5.029 applied retroactively to a correction instrument filed prior to its effective date (September 1, 2011), provided that the instrument substantially complied with the statute.

Last year SCOTX decided Broadway Nat’l Bank v. Yates Energy Corp., 631 S.W.3d 16 (Tex. 2021), construing § 5.029 to mean that the original parties may execute a correction deed even when the original grantees no longer own the property at issue. Consequently, an “heir, successor, or assign” is only required to sign when an original party to the transaction is unavailable. In the case at hand, Endeavor Energy Resources LP and Arah Evelyn Holcomb, Individually and As Executor of the Estate and Successor to E.D. Holcomb vs. Trudy Jane Anderson Testamentary Trust, By and Through Its Trustee Charles Thomas Anderson (No. 11-20-00263-CV), the Eastland Court of Appeals had to decide who the deceased grantee’s “heir, successor, or assign” was for purposes of the statute.

The court of appeals’ lengthy recitation of the facts can be boiled down to this. In 2003, the Holcombs sold the Andersons surface rights to six tracts of their ranch but reserved the mineral, royalty, and executive rights and interests. Shortly thereafter, the parties executed a general warranty deed merging the six tracts into three. Unbeknownst to the Holcombs, the deed apparently did not conform to the parties’ original agreement with respect to the reservation of mineral rights when they subsequently conveyed their executive rights to a third party, who entered into an oil and gas lease to develop the minerals. Endeavor has operated the lease since then and entered into several surface use agreements with the Andersons, who had never claimed to have an interest in any minerals on the three tracts. Later realizing the problem with the general warranty deed, the Holcombs executed a correction deed in 2007 with Tom Anderson, whose wife had died the previous year. Trudy’s established a testamentary trust with Tom as trustee and sole beneficiary with broad powers to dispose of assets for his own benefit. Upon his death, the trust would terminate and the remaining assets would pass to their children.

In 2019 Tom filed a trespass to try title suit against the Holcombs and Endeavor, alleging that the 2007 correction deed was invalid because it should have been signed by Tom and his children. The Holcombs counterclaimed on the basis of the original deed and correction deed. Both parties moved for summary judgment. The trial court granted Tom’s motion and denied the Holcombs’ motions, determining that the correction deed did not substantially comply with § 5.209.

The court of appeals reversed. The Holcombs argued that as Trudy’s “successor,” Tom had full authority to execute the 2007 correction deed. Tom argues that Trudy’s will gave him only a life estate in the trust assets and that it limited his authority to sell or convey real property in the trust without the signatures of his children, thus invalidating the correction deed. The court of appeals held that because Tom’s children had no vested interest in either Trudy’s estate or the property held in the testamentary trust, Tom was indeed Trudy’s sole successor for purposes of § 5.029 and was not merely the holder of a life estate. Even if the trust instrument required Tom to get the signatures of the adult children if he sold or conveyed real property, the correction deed did not constitute a sale or conveyance. It merely corrected a mutual mistake in the general warranty deed and substituted for the original deed consistent with the policy purpose of § 5.029, which is to allow parties a mechanism to correct mistakes without resort to litigation for reformation or rescission.

The court held further that Tom’s failure to indicate on the correction deed that he was signing as “trustee” made no difference in the enforceability of the instrument. The deed was unambiguous and clear that the Holcombs retained the mineral rights on all the tracts conveyed to the Andersons in 2003. Tom’s signature on behalf of the “grantees” further indicated that he signed in all possible capacities, executor, trustee, and individually. In all respects, the correction deed meets the substantial compliance requirement of § 5.029 and is valid and enforceable.

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