West 17th Resources, LLC v. Pawelek, 482 S.W.3d 690 (Tex. App.—San Antonio, pet. denied).


Conveyance by Trustee


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.