West 17th Resources, LLC v. Pawelek, 482 S.W.3d 690 (Tex. App.—San Antonio, pet. denied).
Trustee signed a deed to trust real property
without an express indication whether she was transferring the property
in her capacity as an individual beneficiary, as the trustee, or both.
Thus, the argument was made that the deed did not transfer the interest
which Trustee was holding in trust. The appellate court concluded that
there is no Texas authority “that a grantor’s failure to specify her
capacity either ‘individually’ or ‘as trustee’ nullifies a deed’s
purported conveyance of property that the grantor holds in trust.” Id.
at 694.
Because all parties agreed that the deed was
unambiguous, the court construed the deed as a matter of law. The court
examined the deed’s granting clause which stated that “all” of the
subject property was being conveyed subject only to a utility easement.
The only possible evidence of Trustee’s intent not to convey the trust’s
interest in the property was her failure to specify either an individual
or trust capacity when she signed the deed. The court refused to imply a
reservation of the trust interest from the deed’s coverage because doing
so would conflict with the clear language of the deed conveying all of
the property.
As an alternate ground for its decision, the court
determined that the grantees would have acquired title by adverse
possession.
Moral: To avoid confusion, a trustee who
conveys trust real property should clearly indicate the trustee’s
capacity.