OBA Annual Meeting 2009

2009 REPORT OF THE TITLE EXAMINATION STANDARDS COMMITTEE OF THE REAL PROPERTY LAW SECTION

 

Proposed Amendments to Title Standards for 2009, to be presented for approval by the House of Delegates, Oklahoma Bar Association at the Annual Meeting, November 6, 2009.  Additions are underlined, deletions are indicated by strikeout.

 

The Title Examination Standards Sub-Committee of the Real Property Law Section proposes the following revisions and additions to the Title Standards for action by the Real Property Law Section at its annual meeting in Oklahoma City on Thursday, November 5, 2009.

 

Proposals approved by the Section will be presented to the House of Delegates at the OBA Annual Meeting on Friday, November 6, 2009.  Proposals adopted by the House of Delegates become effective immediately.

 

An explanatory note precedes each proposed Title Standard, indicating the nature and reason for the change proposed.

 

 Proposal 1.

 

The Committee recommends a change in Comment 1 to Title Standard 7.2 to more adequately reflect the status of the law which supports that standard.

 

7.2       MARITAL INTERESTS AND MARKETABLE TITLE

 

Except as otherwise provided in Standard 7.1, no deed, mortgage or other conveyance by an individual grantor shall be approved as sufficient to vest marketable title in the grantee unless:

 

            A.        The body of the instrument contains the grantor’s recitation to the effect that the individual grantor is unmarried; or

 

            B.        The individual grantor’s spouse, identified as such in the body of the instrument, subscribes the instrument as a grantor; or

 

            C.        The grantee is the spouse of the individual grantor and that fact is recited by the grantor in the body of the instrument.

 

            Comments:

 

1.         There is no question that aAn instrument relating to the homestead is VOID void unless both husband and wife subscribe it. Grenard v. McMahan, 441 P.2d 950 (Okla. 1968).  It is also settled that A husband and wife must execute the same instrument, as separately executed instruments will both be void, Thomas v. James, 84 Okla. 91, 202 P.499 (1921).  It is essential to make the distinction between a valid conveyance and a conveyance vesting marketable title when consulting this standard.

 

2.         While 16 O.S. § 13 states that “The husband or wife may convey, mortgage or make any contract relating to any real estate, other than the homestead, belonging to him or her, as the case may be, without being joined by the other in such conveyance, mortgage or contract,” joinder by husband and wife must be required in all cases due to the impossibility of ascertaining from the record whether the property was or was not homestead or whether the transaction is one of those specifically permitted by statute.  See 16 O.S. §§ 4 and 6 and Okla. Const. Art. XII, §2.  A well-settled point is that one may not rely upon recitations, either in the instrument or in a separate affidavit, to the effect that property was not the homestead.  Such a recitation by the grantor may be strong evidence when the issue is litigated, but it cannot be relied upon for the purpose of establishing marketability.  Hensley v. Fletcher, 172 Okla. 19, 44 P.2d 63 (1935).

 

3.         If an individual grantor is unmarried and the grantor’s marital status is inadvertently omitted from an instrument, or if two grantors are married to each other and the grantors’ marital status is inadvertently omitted from an instrument, a title examiner may rely on an affidavit executed and recorded pursuant to 16 O.S. § 82 which recites that the individual grantor was unmarried or that the two grantors were married to each other at the date of such conveyance.

 

Caveat: These recitations may not be relied upon if, upon “proper inquiry,” the purchaser could have determined otherwise.  Keel v. Jones, 413 P.2d 549 (Okla. 1966).

           

4.         A non-owner spouse may join in a conveyance as part of a special phrase placed after the habendum clause, yet be omitted from the grantor line of a deed, and still be considered a grantor to satisfy paragraph B. of this title standard.

 

Proposal 2.

 

The Committee recommends a new comment to Title Standard 14.3 to clarify what is an acceptable execution of an instrument by limited liability company.

 

Standard 14.3   AUTHORITY OF MANAGER TO ACT FOR LIMITED LIABILITY COMPANY

 

            The examiner, in the absence of evidence to the contrary, may presume that a manager of a limited liability company was authorized to act on behalf of the company if the manager executes and acknowledges in proper form a recorded instrument for apparently carrying on the business of the limited liability company.

 

            Comment:  The Oklahoma Limited Liability Company Act as enacted on September 1, 1992,       authorized the Articles of Organization to include a statement of restrictions on the authority of the manager.  This provision was deleted by 1993 Okla. Sess. Laws, ch. 366, § 3, eff. September 1, 1993.  The Committee was unable to reach a consensus whether the filing of the Articles of Organization with such restrictions constitutes constructive notice of the restrictions on the authority of the manager.  If a recorded instrument is executed by a domestic limited liability company before September 1, 1993, the examiner should consider whether it is necessary to review a copy of the Articles of Organization filed with the Secretary of State to determine whether these articles contain a statement of restrictions on the authority of the manager.

 

            Comment:  An instrument executed on behalf of a limited liability company in which the signatory party is identified as a “Manager and Member,”  “Member Manager”  or “Managing Member” is to be considered as satisfying the provisions of 18 O.S. §2015 A 3.

 

            Authority:  16 O.S. § 53 18 O.S. §§ 2005, 2019, 2042; 1992 Okla.  Sess. Laws, ch. 148,

§ 6, eff. Sept. 1, 1992.

 

Proposal 3.

 

The Committee recommends Title Standard 35.2 be amended to accurately reflect the provisions of the legislation which underlies this Standard and to update the applicable authority.

 

Standard 35.2  SERVICEMEMBERS’ CIVIL RELIEF ACT AGAINST DEFAULT JUDGMENTS:

 

            The Servicemembers’ Civil Relief Act, and amendments thereto, are solely for the benefit of those in military service; and, if the court has presumed to take jurisdiction and there is nothing in the record that would affirmatively indicate that any party affected by the court proceedings was in  military service, the form of the affidavit as to military service or its entire absence from the record does not justify the rejection of the title.

 

            Authority:  Hynds v. City of Ada ex rel. Mitchell, 1945 OK 167, 158 P.2d 907 (1945); Wells       v. McArthur, 1920 OK 96, 188 P. 322 (1920); State ex rel. Commissioners of the Land Office v. Warden, 1946 OK 155, 168 P.2d 1010 (1946); Snapp v. Scott, 1946 OK 114, 167 P.2d 870 (1946); 50 APP. U.S.C.A.; Section 521 as amended Jan. 28, 2008.