Prior Exercise of Dominion or Control

Badouh v. Hale, 22 S.W.3d 392 (Tex. 2000).


Daughter signed a deed of trust and real estate lien note in favor of Attorney who had performed legal services for Daughter for which he had not been paid. The deed of trust included a provision in which Daughter conveyed “her expectancy of ownership of the property by reason of inheritance from [Mother]” to secure the note. Several years later, Mother died with a will which specifically devised her home to Daughter. To prevent the home from being subject to her creditors, Daughter disclaimed her interest in Mother’s estate under Probate Code § 37A. On a motion for summary judgment, the trial court determined that Daughter’s disclaimer was invalid and ineffective because Daughter had already exercised dominion and control over the property when she executed the deed of trust and note in favor of Attorney. The appellate court reversed and held that Daughter’s disclaimer may be effective and thus the summary judgment had been improperly granted. The court reasoned that Daughter could not have exercised dominion and control over the property because she was not entitled to the property until Mother’s death.

The Supreme Court of Texas reversed. Daughter accepted the property because she exercised dominion and control over the property by using her expectancy in the property as collateral. Accordingly, she could not validly disclaim the property. The court rejected the argument that Daughter could not have the status as a beneficiary under Probate Code § 37A until Mother’s death. Section 37A’s definition of “beneficiary” is non-exclusive and thus is “broad enough to include expectants under a will.” Badouh at 396.

Moral: Actions a person takes with regard to property prior to being entitled to it may be considered a sufficient exercise of dominion and control to prevent a subsequent disclaimer once title to that property vests in the person.