CMM Title Research & Due Diligence 2 — Questions and Answers
Question 1: When researching a chain of title, what is the primary purpose of examining a 'root of title'?
- To identify the original land grant from the government
- To establish a starting point from which a marketable title can be traced forward (Correct answer)
- To determine the current fair market value of the mineral estate
- To locate all existing easements on the property
Correct answer: To establish a starting point from which a marketable title can be traced forward
A root of title is a conveyance or other title transaction at least a specified number of years old that is sufficient to start a chain from which marketable title can be traced forward.
Question 2: Which document type typically transfers mineral rights by operation of law rather than by a written conveyance?
- Warranty deed
- Quitclaim deed
- Intestate succession (Correct answer)
- Mineral lease
Correct answer: Intestate succession
Intestate succession transfers property, including mineral rights, by operation of law under state statutes when a person dies without a valid will.
Question 3: A 'mother hubbard' clause in a deed is designed to:
- Protect the grantor against future warranty claims
- Capture small tracts or strips of land adjacent to the described property (Correct answer)
- Prohibit the grantee from subleasing mineral rights
- Define the depth limitations of conveyed mineral rights
Correct answer: Capture small tracts or strips of land adjacent to the described property
A 'mother hubbard' clause (or cover-all clause) is used to capture any small strips, gores, or adjacent tracts that the grantor may own near the specifically described property.
Question 4: In title research, a 'wild deed' refers to:
- A deed recorded outside the normal grantor-grantee index chain (Correct answer)
- A deed with missing notary acknowledgment
- A deed conveying rights in multiple counties simultaneously
- A deed executed under duress or undue influence
Correct answer: A deed recorded outside the normal grantor-grantee index chain
A wild deed is one that is recorded but outside the chain of title and therefore provides no constructive notice because a searcher would not reasonably find it in the index.
Question 5: What is the significance of a 'Duhig rule' in mineral title analysis?
- It requires all mineral deeds to be acknowledged before a notary
- It prevents a grantor from conveying more mineral interest than they own, even with warranty language (Correct answer)
- It establishes priority between competing mineral leases
- It defines the depth at which mineral rights separate from surface rights
Correct answer: It prevents a grantor from conveying more mineral interest than they own, even with warranty language
The Duhig rule (originating from a Texas Supreme Court case) prevents a grantor who already owns a fractional mineral interest from using warranty language to effectively claim more interest than they own in a subsequent conveyance.
Question 6: During due diligence, which lien type would NOT typically encumber mineral interests separately from surface interests?
- Ad valorem tax lien on a severed mineral estate
- Mortgage on the mineral estate only
- Mechanic's lien for drilling services
- Federal income tax lien (Correct answer)
Correct answer: Federal income tax lien
Federal income tax liens attach to all property of the taxpayer, including mineral interests, so they are not specific to either surface or mineral estates alone, but they do encumber mineral interests.
Question 7: A 'Pugh clause' in an oil and gas lease serves primarily to:
- Extend the lease term during periods of low production
- Limit the pooling or unitization effect so unleased acreage is released after primary term (Correct answer)
- Require the lessee to post a bond before drilling operations begin
- Establish the royalty rate applicable to gas production
Correct answer: Limit the pooling or unitization effect so unleased acreage is released after primary term
A Pugh clause (or Freestone rider) limits the holding effect of pooling or unitization, releasing acreage outside the producing unit or below the producing formation at the end of the primary term.
CMM Title Research & Due Diligence 2
When researching a chain of title, what is the primary purpose of examining a 'root of title'?