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.